Answer:
D. She should replace the carpeting but not the roof.
Explanation:
Consider the following steps;
Step 1: Determine net value if she replaces the carpeting alone
Net value=Initial value+added value-carpeting cost
where;
Initial value=unknown, assume to be 0
added value=$7,000
carpeting cost=$6,000
replacing;
Net value=0+7,000-6,000=$1,000
Step 2: Determine net value if she replaces the roof
Net value=Initial value+added value-roof replacement cost
where;
initial value=assumed to be 0
added value=$10,000
roof replacement cost=$12,000
replacing;
Net value=0+10,000-12,000=-$2,000
Roof replacement will reduce the house value by -$2,000
Step 3: Determine net value if she decides to do both
Net value=net value for carpeting+net value for roofing
where;
net value for carpeting=$1,000
net value for roofing=-$2,000
replacing;
Net value=1,000+(-2,000)=-$1,000
If she decides to consider the two upgrade the house value will reduce by -$1,000
Step 4: Take the choice with the best value
The most valuable option would be to consider replacing the carpeting alone. By doing this, the value of the house rises by $1,000
Lori contracts to buy coffee beans for her store from Mike. The contract price is $7.50 per pound of Costa Rican coffee. Mike breaches the contract and delivers no coffee. Lori’s damages will likely be
Answer:
the difference between the contract price of coffee and what Lori will have to pay to secure alternative coffee
Explanation:
Lori wanted to buy coffee beans for that she paid the contract price of $7.50 per pounds to mike. Mike has breached the contract which is why Lori has lost $7.50. Now to buy coffee beans she will contact some other supplier and pay them to secure alternative coffee. So, in total Lori's damages are the contract price of coffee and what she will pay some other vendor to secure coffee beans.
"A prediction market has been formed through which participants can bet with each other on the outcomes of the World Cup. One security in this market is priced at $30. This security gives its owner the right to $100 if Country A wins the World Cup and $0 otherwise. Which of the following is true?"
Final answer:
The security's $30 price in the prediction market indicates the market's belief that Country A has less than a 30% implied probability of winning the World Cup. This price reflects collective assessments and involves concepts like arbitrage and the 'winner's curse.' The efficiency of the market depends on rational and strategic actions by the participants.
Explanation:
The situation described in the question involves a prediction market where individuals can bet on the outcome of the World Cup. The security being priced at $30 allows the buyer to receive $100 if Country A wins, and nothing otherwise. The question does not provide enough information to determine the implied probability of Country A winning that the market has set, but essentially, the current price of the security reflects the market's collective assessment of Country A's chances of winning.
In this case, one could infer that participants in the market believe there is less than a 30% chance that Country A will win (because otherwise the price would likely be closer to $100). However, for this market to work efficiently, it relies on principles such as each player choosing actions that maximize payoff, and accurate predictions about other players' actions, as well as an understanding of the concept of arbitrage.
Moreover, what's stated in the information provided is a form of the 'winner's curse' in auctions. Here, it explains that the winner of an auction could overpay for an asset due to competitive bidding, similar to how the highest estimate for an oil field resulted in a loss for the winning bidder.
This example with the prediction market indicates how values can be misallocated in a market, and can be connected to broader discussions about the economic impact of the World Cup and other major sports events on societies.
The value chain comprises activities from research and development through the production process but does not include activities related to the distribution of products or services.True / False.
Answer:
False
Explanation:
What increases the cost of a product or service is the value that has been added, it will be observed that a material at its raw state is cheaper than when it becomes finished goods, the difference in pricing is the value addition.
Therefore, all the stages in a production process that add value to the goods from the production factory until it gets to the hands of the final consumer is called value chain.
Distribution of products or services is part of the value chain because it alters the physical location of the goods and service to bring them close to the consumers. this type of value is place utility.
Discuss why contractors must make bid/no-bid decisions and the factors involved in making these decisions. Give an example of when a contractor should bid and when a contractor should not bid.
Answer:
a. Discuss why contractors must make bid/no-bid decisions:
Contractors have to make a decision to be bid or not to be since the bidding process is usually long and costly.
b. Factors involved in making these decisions:
Opportunity costTechnical requirementsFinancial statusLegal requirementsc. A contractor should bid when the project aligns well with the contractors business goals and has a competitive edge over other bidders, however, a contractor should not bid when there is high probability of project failure or when there is inadequate capabilities in terms of funding and experience.
Explanation:
a.
Bid/no-bid decisions usually follow a request for proposal (RFP). A request for proposal (RFP) is usually a document that seeks a business proposal to be made using a a bidding process by an organization that seeks the procurement of a good, service or an asset. In the construction business, the services are offered by contractors. The RFP usually contains all the information about what the client wants including; the end product and the time frame within which the contract has to be completed. They also include the professional requirements for the workers that will be needed.
Once a contractor has received a RFP, they decide whether or not to bid. Bidding is the process through which the contractor expresses interest in offering his/her services for a certain monetary compensation. Contractors have to make a decision to be bid or not to be since the bidding process is usually long and costly.
b.
The following factors are involved in making bid/no-bid decisions;
1. Opportunity cost: this is the cost of an alternative option to the bidding process. If the opportunity is great, then contractors would make a decision not to bid, however, if the opportunity cost is low, the contractor will make a decision to bid.
2. Technical requirements: the contractors needs to assess if they can meet the technical requirements in terms of expertise and quality. It would be advisable not to bid if they don't meet the requirements.
3. Financial status: the contractor should also consider evaluating the total cost that the project might need. This cost should be checked against the contractor's financial situation to determine if they will be able to handle the project without financial strain.
4. Legal requirements: the contractor needs to check the legal requirements of the project and determine if they can execute the project without going beyond the threshold of the law. One should asses exposure to legal risks before making a decision.
c.
A contractor should bid when the project aligns well with the contractors business goals and has a competitive edge over other bidders, however, a contractor should not bid when there is high probability of project failure or when there is inadequate capabilities in terms of funding and experience.
An enhancing qualitative characteristic of accounting information that refers to the financial statement users' ability to utilize accounting information to differentiate between companies that are reporting similar events is__________
Answer: Comparability
Explanation:
Comparability describes information that is measured and reported in a similar manner for different companies. It helps users understand the real similarities and differences in economic activities between companies.
Silk-skin Cosmetics is advertising its newest line of eye makeup. Made from all-natural ingredients, the products are hypoallergenic. Silk-skin is selling the products in specially designed tubes that make it easier to apply to the skin. Which of the following is the core product value for Silk-skin's line of eye makeup?
Complete question:
A) the natural ingredients
B) the Silkskin brand
C) the products' revolutionary packaging
D) the hypoallergenic properties of the products
E) the possibility of having beautiful eyes
Answer:
The possibility of having beautiful eyes is the core product value for Silk-skin's line of eye makeup.
Option E is correct
Explanation:
A solution to a genuine problem that is important enough to make people pay for a commodity is the core product benefit.
First, whenever the customer interacts with the company at an A-Ha moment, the core product interest is remembered.
For example, the key benefit of a vehicle, the ability to move around at a fast pace, is the key commodity of a car.
In this case, the essential product value of eye make-up for silk-skin cosmetics is the possibility of beautiful eyes.
The main purpose of project plans is to:__________ a. define project scope b. guide project execution c. schedule management plans d. estimate activity resources
Project plans primarily aim to guide project execution by providing a roadmap for teams to follow.
Explanation:The main purpose of project plans is to guide project execution. Project plans provide a roadmap for project teams, outlining the objectives, activities, and timelines to be followed to successfully complete a project. They help coordinate and align the efforts of all team members, ensuring everyone is working towards a common goal. While project plans may involve scheduling management plan, the primary purpose is to guide the execution of the project.
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The main purpose of project plans is to define the project's scope, guide its execution, manage the schedule, and estimate resources needed. They act as a roadmap for the team and stakeholders, helping direct efforts and manage time and resource use.
Explanation:The main purpose of project plans is to effectively accomplish all of the above: to define project scope, to guide project execution, to establish schedule management plans, and to estimate activity resources. Project plans are integral to any project management process because they serve as a roadmap for the team and stakeholders.
Defining project scope helps to establish the boundaries of the project and to focus the efforts of the team. Guiding project execution allows everyone involved to know the direction of the project and how to arrive at the end goal. Schedule management is necessary for effective time management and in preventing time and cost overruns. Lastly, estimating activity resources ensures that the project can be completed with the resources allocated.
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To exercise social responsibility, many companies are linking themselves to what type of marketing?
Answer:
Cause related marketing
Explanation:
Cause related marketing is a part of corporate social responsiblity, where, charity been done with motive of benefit later. Company invest in these marketing strategy to gain relationship with non profit company. The company expect profit or benefit out of these relationship by selling more products and gaining positive publicity. It also help the company to enhance brand image. American express have first used this term to raise money in accordance with Corporate social responsiblity.
Where do employees in the Law, Public Safety, and Security career cluster typically work?
Explanation:
The five categories of Career cluster are
Emergency and fire management Correction services Law enforcement services Security and protective services Legal servicesThere are certain jobs associated with the above category. They are
Judge ,Attorney Correctional officer, Paralegal Immigration and customs inspector Fire fighter , Rescue worker (EMT, paramedic) Emergency dispatcher , Loss prevention specialist Information systems security specialist ,Probation/parole officerCertified security officer , Park ranger, Police officerAnswer: both indoors and outdoors, depending on the work they are doing
A method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage is referred as______________.
Answer:
Resource View
Explanation:
A resource view or resource-based view is a strategic tool, hence its use by managers. It is bascially employed by management for the assessment of an organisation's strategic resources or assets in order to enhance the efficient and effective use of all available resources to maximize competitive advantage.
Some refer to the Resource Based View (RBV) as a managerial framework specifically employed to strategically maximize resource use for sustained advantage over competitors.
Final answer:
The resource approach is a method used by managers to evaluate resources for competitive advantage.
Explanation:
The resource approach is a method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage. This approach involves recognizing core competencies within a firm and determining how to best exploit them to excel in the market.
Although the resource approach encourages strategic thinking that may lead to significant restructuring, it does face criticisms, such as those from the positioning school advocated by Porter, which emphasizes that an organisation's resources are crucial to strategic choices. In contrast, the cost approach focuses on incremental improvements and risk management.
The additional cost to a producer of hiring an additional unit of labor is called the marginal cost. True False
Answer:
True
Explanation:
The additional cost to a generator of hiring a supplementary unit of labor is described as marginal cost. The given statement is very true as we know that in economics, the term marginal is some of the times identified as extra or additional. And the added cost that has been connected and then undertaking an action is described as marginal cost.
________ pricing involves setting prices based on the costs for producing, distributing, andselling the product plus a fair rate of return for the company's efforts and risks.
A) Value-based
B) Fixed cost
C) Cost-based
D) Variable
Answer:
C) Cost-based
Explanation:
Cost-based based pricing is a pricing strategy where price is a mark up of cost of production. Price is the sum of cost of production and an extra amount to account for profit.
Value based pricing is setting prices at the consumers' perceived value for the product.
Fixed pricing is when price remains unchanged over a long period of time.
Variable pricing is when price changes based on location, region and other factors
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People who like to persuade others to do work and have authority over others are likely to have a high. They are especially effective at attaining senior positions in large organizations.
a) true
b) false
Answer:
True
Explanation:
People who are persuasive and charismatic in nature are very much effective at attaining senior positions in large organizations.
Individuals with a high need for power are effective at influencing others and are likely to attain senior positions in large organizations due to their persuasive and leadership abilities.
Those with a high need for power are individuals who are driven to influence others and take control of their environment. This trait is often seen in those who are effective at securing senior positions within large organizations. The ability to persuade and assert leadership are important for climbing the corporate ladder. The capacity for upward influence, which includes the ability to influence superiors and appeal to higher authorities or the company’s overarching goals, grows in importance as organizational complexity increases. Effective leaders use a variety of influence tactics, including rationality and assertiveness with subordinates, while coalition building with their superiors.
Changes that affect a product's versatility, effectiveness, convenience, or safety are called ____ modifications.
a. formal
b. package
c. functional
d. aesthetic
e. quality
Answer:
C. Functional Changes
Explanation:
The goal of functional modifications is to ensure that the product becomes useful to more consumers which in turns broadens the market base for teh product. A strategy that is often employed is to analyze competitor's products and then identify features or modifications that are not available with the competiton's products. These features are then added to the existing product to gain a favourable position with the consumers.
Functional modifications assists the positive image building of a brand.
Functional Modifications include, a product's improved convenience (ease of use and access), effectiveness (ability to perform its stated functions), safety and versatility (ability to adapt or be used in different situations and activities).
Answer:
c. FUNCTIONAL MODIFICATION
Explanation:
c. FUNCTIONAL MODIFICATION
Changes that affect a product's versatility, effectiveness, convenience, or safety are called ____Functional modifications.
Every organisation aim to improve the effectiveness, versatility e.t.c of his product, so that the product will meet customer satisfaction.
the aspect of product modification which improve its efficiency, increase its function, increase the application, reduced its current consumption, e.t.c are classify under functional modification.
b. package : change in branding to entised customer
d. aesthetic : enhance Beautification of the product,
e. quality: the grade and durability of the product
Financial statements provide information pertaining to A : an economy as a whole and members of society as consumers, rather than to individual enterprises or industries.
Answer:
b. Individual business enterprises, rather than to industries or an economy as a whole or members of the society as consumers
Explanation:
Financial statements provide information pertaining to
A : an economy as a whole and members of society as consumers, rather than to individual enterprises or industries.
B. Individual business enterprises, rather than to industries or an economy as a whole or members of the society as consumers
C. Individual business enterprises, industries and an economy as a whole or members of the society as consumers
D. Business Industries rather than Individual business enterprises or an economy as a whole and members of society as consumers.
ANSWER
Financial statement by their definition are written reports that communicate the business activities that a firm engages in, and the financial performance of those activities and of the entire company.
From the above definition it is very understandable that financial statements are more pertained to business enterprises than industries or members of the society. It in no way pertains to the economy
When the seller requires that only certain dealers carry its products and also that these dealers not handle competitors' products, its strategy is known as ________. Exclusive distribution horizontal restraint of trade disintermediation selective distribution horizontal market division
Answer:
exclusive dealing
Explanation:
Exclusive dealing -
It is the method , where a deal is set up between a specific supplier and the wholesaler or the retailer , where the no other distributor would be able to receive the supply , is referred to as exclusive dealing.
In this scenario no other dealer can not handle the product in any case.
Hence , from the scenario of the question,
The correct option is exclusive dealing .
True or false: in a limited partnership, after exhausting all of the funds he invested, the limited partner is personally liable for the remaining debt of the partnership
Answer:
False
Explanation:
A limited partnership is a type of partnership with at least one general and limited partner.
The limited partner is liable for the debt of the company up to the money invested.
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Which of the following is NOT a correct explanation for multimarket competition?
A) Extensive market commonality increases intense competition in an industry.
B) A firm with greater multimarket contact is less likely to initiate an attack, but more likely to respond aggressively when attacked.
C) Coca Cola and PepsiCo compete across a number of products (e.g., soft drinks, bottled water) and geographic markets (U.S. and foreign markets) indicating that both companies have market commonality.
D) Market commonality is concerned with the number of markets with which the firm and a competitor are jointly involved and the degree of importance of the individual markets to each.
Answer:
Which of the following is NOT a correct explanation for multi-market competition?
Coca Cola and PepsiCo compete across a number of products (e.g., soft drinks, bottled water) and geographic markets (U.S. and foreign markets) indicating that both companies have market commonality.
Explanation:
In the country Blestonia, people value relationships over business. They use communication as a means of building social relationships rather than to merely exchange information. Given this information, it can be concluded that Blestonia has a _____. a. high-context culture b. masculine culture c. uncertainty avoidance culture feminine culture d. low-context culture
Answer:
The correct answer is (a)
Explanation:
According to the above scenario, Blestonia has a high context culture which means they believe in implicit communication. Overall, the most important aspect of high context culture is their way of communication, and how much importance they give to interpersonal communication. As they believe in interpersonal communication that is why social relationships are highly regarded in such societies.
______ argued that the major activities of management and leadership are played out differently; but both are essential to an organization.
Answer:
Kotter
Explanation:
According to Kotter, leadership and management are two different aspects but however they are complementary systems of action in organization.
Which statement is not correct about the business-society interdependence?
A. Business is a part of society.
B. Business is is separated from the rest of society by clear boundaries.
C. Business activities impact other activities in society.
D. Actions by governments rarely significantly affect business.
Answer:
D. Actions by governments rarely significantly affect business
Explanation:
Business-socciety interdependence points out how business activities impact society and how society impacts business decisions. Government actions play a significant role in business performance. For example, an increase in interest rate increases the cost of borrowing and acts as an investment disncentive. Likewise, an increase in corporation tax stifles the incentive to invest and reduces corporate profit. Other government interventions such as standards and regulations, minumum wage legislations, permits and licenses would not only reduce business profits but could make doing business very cumbersome. Also, the extent to which the government is committed to maintaining political stability could determine the extent to which invesmtent thrives in an economy.
Business is not separated from the rest of society by clear boundaries.
Explanation:B. Business is separated from the rest of society by clear boundaries.
This statement is not correct about the business-society interdependence. Business is not separated from the rest of society by clear boundaries. In fact, business is a part of society and its activities impact other activities in society. Governments also play a significant role in affecting business through laws and regulations.
For example, government regulations can make it harder for businesses to start up or expand by requiring permits, fees, and restricting product types and quality. Zoning laws may also limit where businesses can operate or their operating hours.
Therefore, the correct statement is that business is not separated from the rest of society by clear boundaries.
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Which of the following statements is CORRECT?
a. While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.
b. An example of a primary market transaction would be your uncle transferring 100 shares of Walmart stock to you as a birthday gift.
c. The NYSE does not exist as a physical location. Rather it represents a loose collection of dealers who trade stock electronically.
d. Capital market instruments include both long-term debt and common stocks.
e.If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.
Answer:
D. Capital market instruments include both long-term debt and common stocks.
Explanation:
Capital market is financial market where long term instruments are traded. These instruments include bond, common stocks and debenture. With this background, statement in option D is correct.
Option A is not correct because reverse is the case: investment banks raise large blocks of capital from investors while commercial banks specialize in lending money.
Option B and E are not correct, too. Transaction under them are examples of a secondary market transaction.
Option C is wrong, as well. NYSE has a physical location where trading activities happen.
So option D is the only correct statement because capital market instruments are long-term debt and common stocks.
The customer care manager at a cell phone company keeps track of how long each help-line caller spends on hold before speaking to a customer service representative. he finds that the distribution of wait times for all callers has a mean of 12 minutes with a standard deviation of five minutes
Answer:
a) [tex]\bar X \sim N(\mu,\frac{\sigma}{\sqrt{n}})[/tex]
Because the sample mean is defined as:
[tex] \bar X = \frac{\sum_{i=1}^n X_i}{n}[/tex]
So then the mean for the sample distibution is [tex] \mu_{\bar X} =\mu=12 min[/tex]
b) [tex] \sigma_{\bar x} =\frac{\sigma}{\sqrt{n}}=\frac{5}{\sqrt{10}}= 1.581[/tex]
c) For this case since the distribution for the random variable [tex]\bar x[/tex] is normal and for the sample mean is also normal so then we can conclude that the distribution for the sample mean is symmetrical and bell shaped with a deviation lower than the deviation for X
Explanation:
Assuming this complete problem:
The customer care manager at a cell phone company keeps track of how long each help-line caller spends on hold before speaking to a customer service representative. He finds that the distribution of wait times for all callers has a mean of 12 minutes with a standard deviation of 5 minutes. The distribution is moderately skewed to the right. Suppose the manager takes a random sample of 10 callers and calculates their mean wait time, [tex]\bar x[/tex] .
Previous concepts
Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".
The Z-score is "a numerical measurement used in statistics of a value's relationship to the mean (average) of a group of values, measured in terms of standard deviations from the mean".
Let X the random variable that represent the wait times for all callers of a population, and for this case we know the distribution for X is given by:
[tex]X \sim N(12,5)[/tex]
Where [tex]\mu=12[/tex] and [tex]\sigma=5[/tex]
(a) What is the mean of the sampling distribution of [tex]\bar x[/tex] ?
Since the distribution for the random variable X is normal then the distribution for the random variable [tex]\bar X[/tex] is also normal and given by:
[tex]\bar X \sim N(\mu,\frac{\sigma}{\sqrt{n}})[/tex]
Because the sample mean is defined as:
[tex] \bar X = \frac{\sum_{i=1}^n X_i}{n}[/tex]
So then the mean for the sample distibution is [tex] \mu_{\bar X} =\mu=12 min[/tex]
(b) Is it possible to calculate the standard deviation of [tex]\bar x[/tex] ? If it is, do the calculation. If it isn’t, explain why.
For this case since we knwo that the distribution for the sampel mena is given by:
[tex]\bar X \sim N(\mu,\frac{\sigma}{\sqrt{n}})[/tex]
Then we know that the deviation for the sample mean is given by:
[tex] \sigma_{\bar x} =\frac{\sigma}{\sqrt{n}}=\frac{5}{\sqrt{10}}= 1.581[/tex]
(c) Do you know the approximate shape of the sampling distribution of [tex]\bar x[/tex]? If so, describe the shape and justify your answer. If not, explain why not.
For this case since the distribution for the random variable [tex]\bar x[/tex] is normal and for the sample mean is also normal so then we can conclude that the distribution for the sample mean is symmetrical and bell shaped with a deviation lower than the deviation for X
AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA’s inventory is included in 2015 GDP?
Answer:
$90,000
Explanation:
Given that
Added amount to inventory = $100,000
Used amount for refrigerator = $10,000
Purchase of newly manufactured refrigerator = $90,000
So by considering the above information, the amount that is included would be $90,000 as this amount reflect the newly refrigerator amount and the other $10,000 would already be used so this amount is not relevant.
For a restaurant: Select one: a. cheese and other wholesale food items would be considered fixed resources in the short run. b. labor and food would be variable resources and a building would be a fixed resource in the short run. c. a building would be a fixed resource in the short run. d. labor and food would be variable resources.
Answer:
c. a building would be a fixed resource in the short run.
Explanation:
A fixed resource is a factor of production that doesn't vary with output. E.g. building
A variable resource is a factor of production that varies with output. If output increases, variable resources increases. E.g. labour, cheese and other wholesale food items.
Output is what is produced. E.g. the food produced by the restaurant is the output.
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A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:____________a) a trade offb) a budget linec) a tangent point
Answer:
budget line
Explanation:
A budget line is a graphical representation that shows all the possible combination of how two products that can be consumed at different prices with a given income. The budget line is downward sloping with the gradient of the slope reflecting the two prices.
A budget line assists in understanding consumer choices and behavior. A budget line may shift due to changes in the consumer's income. It shifts to the left when income decreases and shifts to the right when income increase.
A budget line represents the various combinations of two products a consumer can purchase with a specific amount of money income. It indicates feasible and non-feasible purchases given a specific budget.
Explanation:The schedule or curve that demonstrates the various combinations of two products a consumer can purchase with a specific amount of money income is referred to as a budget line. The budget line depicts the boundary of feasible purchases for a consumer given a specific budget. Any point on the line indicates a bundle of goods that the consumer can afford, any point inside the line indicates a bundle of goods that is affordable but not fully utilizing the income, and any point outside the line is unaffordable.
For example, if a consumer has $20 and the price of apples is $2 per apple and the price of bananas is $1 per banana, the budget line will show all the possible combinations of apples and bananas the consumer can buy with $20.
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According to the factor-endowment theory, international specialization and trade cause a nation's cheap resource to become cheaper and a nation's expensive resource to become more expensive. True or false?
Answer:
False
Explanation:
Factor endowment policy states that a country would be abundant in a resource which most utilize the factor with which the country is excessively blessed or endowed with.
For example, in producing a particular good, out of all the factors of production, labor is most required. If the country is blessed or endowed with high supply of skilled labor, then the country would eventually turn out to be amongst the top producers of that good.
As per the theory, international specialization and trade would cause a nation's cheap resources (abundant initially) to become expensive and expensive resources (which were scarce earlier) to become cheaper.
Thus, the given statement is false.
Joanne invested $15,000 six years ago. Her arithmetic average return on this investment is 8.72 percent, and her geometric average return is 8.50 percent. What is Joanne's portfolio worth today?
A. $23,989
B.$24,472
C. $26,409
D. $26,514
E. $26,766
Answer:
B) $24,472
Explanation:
To calculate the present value of Joanne's investment, we need to calculate the future value of the investment 6 years ago. The formula we are going to use is:
FV = principal x (1 + r)ⁿ
principal = 15,000n = 6 yearsr = geometric average returnFV = $15,000 x (1 + .085)⁶ = $15,000 x 1.085⁶ = $15,000 x 1.6315 = $24,472
In a partnership liquidation, a.the last journal entry credits the partners' capital accounts for the remaining cash. b.gains and losses on the sale of assets are allocated to the partners on the basis of their current capital accounts. c.creditors should be paid before partners. d.the partners' accounts are settled on the basis of their stated ratios.
Answer:
Correct answer is C, creditors should be paid before partners
Explanation:
During partnership liquidation, settlement of obligation comes first before distribution of cash to the partners. There two types of creditors, the outside creditors and the partner creditor. The priority as to who shall be paid first is always the outside creditors before partners. After the non-cash asset is sold, or if there is available cash, creditor will be paid first then the partner creditor. Afterwards, the remaining cash will be distributed to partners based on their profit or loss ratio.
Multico is a securities dealer whose principal market is with other securities dealers. To take advantage of a perceived opportunity, on December 31, the end of its fiscal year, Multico acquired a financial asset in a market other than its principal market for $50,000. At that date, the identical instrument could be sold in Multico's principal market for $50,100 with a $200 transaction cost. Which of the following amounts would constitute fair value to Multico for the financial asset at December 31?
Answer:
$50,100
Explanation:
Given that
Acquired value of a financial asset other than principal market = $50,000
Sale value of the identical instrument in principal market = $50,100
Transaction cost = $200
For reporting the fair value, we have to exclude the transaction cost i.e $200 and consider that cost which is to be received while exchanging i.e $50,100
This sale value would be equal to the fair value i.e $50,100 should be reported as a fair value