Answer:
Governance Form.
Explanation:
The buyer has the right to request a copy of several documents, including the Governance Form. This form summarizes the board of directors and unit rights.
Personal communications about a product between target buyers and neighbors, friends, family members, associates, and other consumers, are known as ________.
A) personal selling
B) direct marketing
C) public relations
D) buzz marketing
E) word-of-mouth influence
Answer:
E) word-of-mouth influence
Explanation:
3. A property that produces a first year NOI of $80,000 is purchased for $750,000. The NOI is expected to increase by 15% in the sixth year when some of the leases turnover. The resale price in year 10 is expected to be $830,000. What is the net present value of the property based on the 10-year holding period and a discount rate of 9.5%? (D)
Answer:
Net Present Value (NPV) = $ 115,998
Explanation:
Calculation of the Net Present Value
Net Present Value = Cash Inflows - Cash Outflows
NOI from 6th year = 80,000*115% = 92,000
NPV = 80000 (PVAF, 5 year) + 92,000 (PVAF, (105), 9.5%) + 830,000/(1.095)10 - 750,000
NPV = (80,000 x 3.839) + (92,000 x 2.439) + (830,000 x 0.403) - 750,000
= 307,120 + 224,388 + 334,490 - 750,000
The Net Present Value will be $ 115998
The net present value of the property is approximately $95,235.12.
Explanation:To calculate the net present value (NPV) of the property, we need to discount the cash flows from the property at the given discount rate. The formula to calculate NPV is:
NPV = CF0 + Σ(CFt / (1+r)t) - C0
In this case, CF0 is the initial purchase price (-$750,000), CFt is the expected cash flow in year t, r is the discount rate (0.095), and C0 is the expected resale price in year 10 (+$830,000). We need to calculate the present value of each year's cash flow and then sum them up to find the NPV.
The cash flows for each year can be calculated as follows:
Year 1: $80,000 (no discounting needed)Year 2-5: $80,000 × (1+0.15)t-1Year 6-9: $80,000 × (1+0.15)t-1 × (1+0.155)Year 10: $830,000 × (1+0.15)10Substituting these values into the formula and summing up the discounted cash flows, the net present value of the property is approximately $95,235.12.
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A newspaper publisher uses roughly 950 feet of baling wire each day to secure bundles of newspapers while they are being distributed to carriers. The paper is published Monday through Saturday. Lead time is 7 workdays. What is the appropriate reorder point quantity, given that the company desires a service level of 90 percent, if that stockout risk for various levels of safety stock is as follows: 1,500 feet, .10; 1,600 feet, .05; 2,400 feet, .02; and 2,600 feet, .01?
Answer:
Consider the following calculation
Explanation:
Given daily demand d= 870 feet
Lead time L = 6 days
Reorder point = Demand during lead time + Safety stock
Demand during lead time = dL = 870*6 = 5220
Safety stock = 1900 as service level ois 95 percent. So stockout risk = 1-0.95 =0.05.Given at stockout risk 0.05
safety stock = 1900
Reorder point = 5220 + 1900 = 7120
The appropriate reorder point quantity is calculated by considering the lead time and desired service level, as well as the stockout risk and safety stock levels. The calculations for the given scenario result in different reorder point quantities based on the chosen safety stock level and its associated stockout risk.
Explanation:To determine the appropriate reorder point quantity, we need to consider the lead time and the desired service level. The reorder point is the level at which we should place an order to replenish our stock. It is calculated by multiplying the average demand during the lead time by the desired service level and adding the safety stock.
In this case, the average demand during the lead time is 950 feet per day multiplied by 7 days, which gives us 6650 feet. Given the stockout risk for various levels of safety stock and their corresponding probabilities, we can calculate the appropriate reorder point quantity.
If the safety stock is 1,500 feet with a stockout risk of 0.10, the reorder point quantity would be 6650 + 1500 = 8150 feet.If the safety stock is 1,600 feet with a stockout risk of 0.05, the reorder point quantity would be 6650 + 1600 = 8250 feet.If the safety stock is 2,400 feet with a stockout risk of 0.02, the reorder point quantity would be 6650 + 2400 = 9050 feet.If the safety stock is 2,600 feet with a stockout risk of 0.01, the reorder point quantity would be 6650 + 2600 = 9250 feet.Based on these calculations, the appropriate reorder point quantity would vary depending on the desired stockout risk and the corresponding safety stock level.
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You would like to invest $20,000 and have a portfolio expected return of 14 percent. You are considering two securities, M and N. M has an expected return of 20 percent and N has an expected return of 10 percent. How much should you invest in stock M if you invest the balance in stock N to achieve the 14 percent portfolio return?
Answer:
The amount invested in M = $8,000
The amount invested in N = $12,000
Explanation:
Data provided in the question:
Total amount invested = $20,000
Expected return on portfolio = 14%
Expected return on M = 20% = 0.20
Expected return on N = 10% = 0.10
Now,
Let the amount invested in M be 'x'
thus,
Amount invested in N will be = $20,000 - x
Thus,
According to the question
0.20(x) + 0.10($20,000 - x) = 0.14($20,000)
or
0.20x + $2,000 - 0.10x = $2,800
or
0.10x = $800
or
x = $8,000
Therefore,
Amount invested in N will be = $20,000 - $8,000
= $12,000
Hence,
The amount invested in M = $8,000
The amount invested in N = $12,000
Which of the following is NOT a valid condition for denying a patent application?Select one:
a.The "invention" sought to be patented is actually a living creature.
b. The invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country.
c. The inventor has abandoned the invention.
d. He did not himself invent the subject matter sought to be patented
The answer is option a, which states that an invention sought to be patented is a living creature. Since Diamond v. Chakrabarty, genetically modified organisms can be patented, making option a incorrect as a reason for denial.
The correct answer to the student's question about a valid condition for denying a patent application is option a: The "invention" sought to be patented is actually a living creature. After the 1980 Diamond v. Chakrabarty case, it became possible to patent genetically modified organisms, meaning that living creatures, if altered by humans, could be subject to a patent. This decision allowed for the patenting of genetically modified bacteria, plants, and even specific genes, as long as they met the criteria of being distinct, new, and not naturally occurring.
Options b, c, and d represent legally recognized reasons for denying a patent. In option b, if an invention was previously known or documented, it is not considered novel and therefore not patentable. Option c, abandonment, refers to a situation where the inventor stops pursuing the patent without a good reason, and in option d, one must be the true inventor to apply for a patent. However, none of these options represents a barrier to entry that is both a valid reason for denying a patent and directly government-enforced.
Assume a zero-coupon bond that sells for $270 and will mature in 25 years at $1,850. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. What is the effective yield to maturity? (Assume annual compounding. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer:
8.00%
Explanation:
Data provided in the question:
Selling price of the bond i.e current value = $270
Future value = $1,850
Maturity time, t = 25 years
Now,
Effective yield to maturity, r = [tex](\frac{\text{Future value}}{\text{Current value}})^{\frac{1}{t}}-1[/tex]
on substituting the respective values, we get
Effective yield to maturity, r = [tex](\frac{\$1,850}{\$270})^{\frac{1}{25}}-1[/tex]
or
Effective yield to maturity, r = 1.0800 - 1
or
Effective yield to maturity = 0.0800
or
= 0.0800 × 100% = 8.00%
Sandusky Inc. has the following costs when producing 100,000 units: Variable costs $600,000 Fixed costs 900,000 An outside supplier is interested in producing the item for Sandusky. If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income. At what unit price would Sandusky accept the outside supplier's offer if Sandusky wanted to increase net income by $120,000?
Answer:
$6.30
Explanation:
For computing the unit price, first we have to determine the difference in cost which is shown below:
= $150,000 - $120,000
= $30,000
Now the break even price would be
= Variable cost + cost difference
= $600,000 + $30,000
= $630,000
So, the unit price would be
= Break even price ÷ number of unit produced
= $630,000 ÷ 100,000 units
= $6.30
Which of the following promotion tools involves building up a good corporate image and handling unfavorable stories and events?
A) sales promotionB) personal sellingC) direct and digital marketingD) public relationsE) advertising
Answer:
Public relation
Explanation:
Public relation is assumed to be one of the most efficient tool for making good healthy relation in market. it is practical tool that work firmly and efficiently with cost effective way to promote the business to the next level.
public relation make awareness among the potential customer in a short time period effectively.
The Great Giant Corp. has a management contract with its newly hired president. The contract requires a lump sum payment of $24,800,000 be paid to the president upon the completion of her first 9 years of service. The company wants to set aside an equal amount of funds each year to cover this anticipated cash outflow. The company can earn 8 percent on these funds. How much must the company set aside each year for this purpose?
Answer:
The company must set aside $1,985,976.79 each year for this purpose
Explanation:
Data provided in the question:
Required payment = $24,800,000
Time = 9 years
Interest rate = 8% = 0.08
Now,
Required payment = A × [( ( 1+ r )ⁿ - 1) ÷ r ]
Here,
A is the amount required to be set aside each year
Therefore,
$24,800,000 = A × [( ( 1+ 0.08 )⁹ - 1) ÷ 0.08 ]
or
$24,800,000 = A × 12.48755
or
A = $1,985,976.79
Hence,
The company must set aside $1,985,976.79 each year for this purpose
Sheffield Corp. maintains its accounting records using IFRS. The company recently signed a lease for a new office building, for a lease period of 9 years. Under the lease agreement, a security deposit of $44000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 8% per year. What amount will the company receive at the time the lease expires?
Answer:$75,680
Explanation:8% of 44000=3,520. For 9years= 3520×9=31680. Total money at the end= principal+interest= 44000+31680=75680
When a good with a perfectly inelastic demand is taxed, the incidence of the tax is borne:
A. by consumers and producers equally.
B. mostly by producers.
C. entirely by consumers.
D. mostly by consumers.
E. entirely by producers.
Answer:
Option (C) is correct.
Explanation:
The goods with a perfectly inelastic demand with any changes in the prices of the commodities are generally have no effect on the demand for a good. This means that if there is an imposition of tax on the good with a perfectly inelastic demand then this will lead to increase the price level by the full amount and therefore, the incidence of this tax is fully borne by the consumers.
Don Wyatt is unable to reconcile the bank balance at January 31. Don Wyatt’s reconciliation is as follows. Cash balance per bank $3,560.20 Add: NSF check 490.00 Less: Bank service charge 25.00 Adjusted balance per bank $4,025.20 Cash balance per books $3,875.20 Less: Deposits in transit 530.00 Add: Outstanding checks 730.00 Adjusted balance per books $4,075.20(a) Prepare a correct bank reconciliation (b) Journalize the entries required by the reconciliation.
Answer
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Step-by-step explanation:
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Answer:
a) Amount in $
Balance per bank statement 3,560.20
Deposit in transit 530.00
Outstanding check (730.00)
Bank charges 25.00
NSF Check 490.00
Book balance 3,875.20
b)
Debit Bank charge $25
Credit Cash account $25
Being entries to recognize bank charges for the period.
Explanation:
Considering the transaction, Deposit in transit has been recognized in the books and will thus be added to the balance per bank. The bank charge was deducted from the bank balance but is yet to be deducted from the book balance hence it is added back to the bank balance. The outstanding check has been deducted from the books hence the deduction from the bank. See the reconciliation below.
Amount in $
Balance per bank statement 3,560.20
Deposit in transit 530.00
Outstanding check (730.00)
Bank charges 25.00
NSF Check 490.00
Book balance 3,875.20
b) The entries required is the recognition of the bank charge in the books
Debit Bank charge $25
Credit Cash account $25
Being entries to recognize bank charges for the period.
Assume that the marginal social benefit of the last unit of vaccination provided is greater than the marginal social cost. Which of the following can be used to achieve efficiency in the market for vaccination?Select the correct answer below:a. A per-unit subsidy for vaccinationsb. A lump-sum tax for vaccinationsc. A price ceiling for vaccinationsd. A per-unit tax on vaccinations
Answer:
The correct answer is letter "A": A per-unit subsidy for vaccinations.
Explanation:
A unit subsidy is a certain amount per unit produced given to the manufacturer. This type of subsidy will downturn the supply curve because of the amount of the subsidy. Typically, this is done to decrease the price level and increase the output quantity.
In that case, by creating more output for the vaccinations the marginal cost will be higher which reaches the marginal benefit at a certain point provoking market efficiency for the vaccinations.
Final answer:
A per-unit subsidy for vaccinations is the policy that can be used to achieve efficiency in the vaccination market when MSB exceeds MSC, as it bridges the gap between the market equilibrium and the socially desirable level of output.
Explanation:
To achieve efficiency in the market for vaccination when the marginal social benefit (MSB) of the last unit of vaccination provided is greater than the marginal social cost (MSC), the government can provide a per-unit subsidy for vaccinations.
This subsidy acts like a voucher that consumers can use as 'income' to purchase vaccinations. With this financial assistance, the supply and demand in the market adjusts so that the equilibrium quantity of vaccinations, Qsocial, corresponds to the point where MSB equals MSC. At this point, the market produces the socially optimal quantity of vaccinations.
Thus, the answer to the question is: a. A per-unit subsidy for vaccinations. Suppliers would receive payment of Psocial per vaccination, and consumers would use the voucher to pay a lower price of Psubsidy. The end result is an increase in vaccinations to a level that achieves social efficiency by ensuring that the marginal social benefit of vaccinations equals the marginal social cost.
When a negative externality exists and the government does not intervene, which point best identifies the market equilibrium?
Answer and Explanation:
When a negative externality exists, and the government does not intervene, then the market equilibrium is where Internal demand is equal to the internal cost and socially optimal equilibrium with negative externality exist where the internal demand is equal to the social cost.
Everly Corporation acquires a coal mine at a cost of $400,000. Intangible development costs total $100,000. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $80,000), after which it can be sold for $160,000. Everly estimates that 4,000 tons of coal can be extracted.
If 700 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
Explanation:
The journal entry is shown below:
Inventory A/c Dr $73,500
To Accumulated depletion A/c $73,500
(Being the depletion is recorded)
The computation is shown below
First we have to compute the depletion per ton which is shown below:
= (Acquired cost of coal mine + Intangible development costs + fair value of the obligation - Sale value) ÷ (Number of estimated tons of coal extracted)
= ($400,000 + $100,000 + $80,000 - $160,000) ÷ (4,000 tons)
= $105
Now if 700 are extracted in first year, so the depletion would be
= 700 × $105
= $73,500
Chang Corporation issued $6,000,000 of 9%, ten-year convertible bonds on July 1,2017 at 96.1 plus accrued interest. The bonds were dated April 1, 2017 with interestpayable April 1 and October 1. Bond discount is amortized semiannually on astraight-line basis. On April 1, 2018, $1,200,000 of these bonds were converted into500 shares of $20 par value common stock. Accrued interest was paid in cash at thetime of conversion.
What should be the amount of the unamortized bond discounton April 1, 2018 relating to the bonds converted?
A. $46,800.
B. $43,200.
C. $23,400.
D. $44,400.
Answer
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Step-by-step explanation:
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Higher rates of real per capita gross domestic product (GDP) are negatively correlated with:
Answer:
unemployment
Explanation:
Okun' law is an association that describes unemployment in a country based on the observation of a decline in Real GDP in the country. According to the interval and related model, every 1% increase in unemployment leads to a 2% deviation from the country's GDP potential. The difference model explains the relationship between unemployment and real GDP changes in the quarters. The law was named Arthur Okun in 1962, recognizing these relations. Arthur Okun, who examines the growth Real GDP and unemployment figures of the American economy, has found that unemployment rates have declined in those years when the real growth rate is high, and, on the contrary, the rise in unemployment rates has been low or even negative. This means the negative correlation between them. Arthur Okun's statement of the link between real growth and unemployment in a formula has led to this idea being later called Okun's law. Okun's law is that when real growth rates exceed 2.25%, increasing real incomes by more than 2.25% will result in a 0.5% drop in unemployment. For example, in a year when national income increased by 5.25%, unemployment declined by 1.5% (5.25% to 2.25% = 3% and 3% / 2% = 1.5%).
Suppose that a plant manager has taken MgtOp 340, and so she uses economic batch sizes for production of a product. Suppose further that the setup cost is $50, the holding cost per unit per year is $10, the annual demand is 30,000 units, the firm operates (and experiences demand) 300 days per year, and the production rate per day is 1000 units. What will be the maximum inventory level that this product ever reaches?
Answer:
Maximum inventory level is 520 units
Explanation:
Given,
C0 = $50
Ce = $10
D = 30,000 units
d = D / Days
= 30,000 / 300
= 100 units per day
p = 1,000 units
Computing the optimal order size with the formula as:
Qopt = √ 2 C0 D / Ce (1- d / p)
=√ 2 (50) (30,000) / $10 (1 - 100 / 1,000)
= 577.36
Computing the maximum inventory level as:
Maximum inventory level =Qopt ( 1 - d/ p)
= 577.36 ( 1- 100 / 1,000)
= 519.624 unit or 520 units
You are considering buying a company using leveraged buyout. The company is projected to have sales of 500 million each year in the three years after buyout. The cost of sales and other administrative expenses are 60% of the sale. Depreciation and amortization are 5% of the sale. Tax rate is 40%. Suppose that the change in net working capital and capital expenditure each year is zero. If you borrow 1.5 billion at interest rate of 8% per year, and you use all the cash flow to repay debt.
What is the net income in the first year after the buyout?
Answer:
Net income= $33 million
Explanation:
A leveraged buyout is a buyout of an entity by it's own managers/board members mostly through debt financing. Now the expected sales after the buyout is 500 million, we are asked to calculate net income only in the first year. First of all lets see what net income is. Net income is the remaining amount of income after having paid all the expenses which is mostly the residual income available for either distribution to shareholders or transfer to retained earnings.
The formula for net income is as follows:
Net income/profit= Sales revenue - COGS - Administrative expenses- depreciation and amortization - Interest expense - Tax
Let first calculate COGS & other administrative expense, depreciation and interest expenses first.
COGS & ADMIN: 500*0.6=300 m
Depreciation: 500*0.05 =25m
Interest expense for the year: 1500 * 0.08= 120m
Now lets substitute values in the formula mentioned above:
Income before taxes: 500m - 300m - 25m - 120m
Income before taxes: 55m
Income after taxes; 55m - 22m (taxes= 55*40%)
Net income= $33 million
An investment banker has recommended a $100,000 portfolio containing assets B, D, and F. $20,000 will be invested in asset B, with a beta of 1.5; $50,000 will be invested in asset D, with a beta of 2.0; and $30,000 will be invested in asset F, with a beta of 0.5. The beta of the portfolio is ________.
Answer:
1.45
Explanation:
Investment:
Stock B = $20,000
Stock D = $50,000
Stock F = $30,000
Total investment = $20,000 + $50,000 + $30,000
= $100,000
Weight:
= Investment ÷ Total investment
Therefore,
Weight of Stock B:
= $20,000 ÷ $100,000
= 0.2
Weight of Stock D:
= $50,000 ÷ $100,000
= 0.5
Weight of Stock F:
= $30,000 ÷ $100,000
= 0.3
Beta of the portfolio:
= (Weight of Stock B × Beta) + (Weight of Stock D × Beta) + (Weight of Stock F × Beta)
= (0.2 × 1.5) + (0.5 × 2.0) + (0.3 × 0.5)
= 0.30 + 1 + 0.15
= 1.45
To compute the portfolio beta, multiply the beta of each asset by its proportion of the total investment, then sum the values. In this instance, the beta for the investment portfolio containing assets B, D, and F is 1.45.
Explanation:The beta of a portfolio is the average of the betas of the individual investments proportionate to their respective share of the total investment. To calculate the beta for the combination of assets B, D, and F, we multiply the beta of each asset by its proportion of the total investment (!20,000/$100,000 for asset B, $50,000/$100,000 for asset D, and $30,000/$100,000 for asset F), and sum these values.
The calculations would look like this:
Asset B: (1.5 * 20,000/100,000) = 0.3Asset D: (2.0 * 50,000/100,000) = 1Asset F: (0.5 * 30,000/100,000) = 0.15Adding these together, the beta of this investment portfolio would be 0.3 + 1 + 0.15 = 1.45
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Jones Industries received $800,000 from issuing shares of its common stock and $700,000 from issuing bonds. During the year, Jones Industries also paid dividends of $90,000. How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.
Answer
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Step-by-step explanation:
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An investment has the following characteristics:ATIRRP: After-tax IRR on total investment in the property: 9.0%BTIRRE: Before-tax IRR on equity invested: 17%BTIRRP: Before-tax IRR on total investment in the property: 12%t: Marginal tax rate: 0.40What would be the break-even interest rate (BEIR), at which the use of leverage neither favorable nor unfavorable? (A)(A) 15.0%(B) 20.0%(C) 22.5%(D) 28.3%
Answer:
Option (A) is correct.
Explanation:
Given that,
After-tax IRR on total investment in the property = 9.0%
Before-tax IRR on equity invested = 17%
Before-tax IRR on total investment in the property = 12%
t: Marginal tax rate = 0.40
Break Even Interest rate (neither favorable nor unfavorable):
= After tax IRR on total investment ÷ (1 - Tax rate )
= 9% ÷ (1 - 0.40)
= 9% ÷ 0.60
= 15%
Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $2.50 per unit, fixed costs related to making this part are $50,000 per year, and allocated fixed costs are $50,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.70 per unit guaranteed for a three-year period.Required:1. Calculate the total incremental cost of making 50,000 units.2. Calculate the total incremental cost of buying 50,000 units.
Answer:
a. Incremental cost of making the part $
Variable cost (50,000 units x $2.50) = 125,000
Attributable fixed cost = 50,000
Incremental cost 175,000
b. Incremental cost of buying the part from outside
= 50,000 units x $3.70
= $185,000
Explanation: The incremental cost of making the part is the total relevant cost of production, which involves variable cost and attributable fixed cost.
The incremental cost of buying the component refers to cost of buying the part from outside.
Zimmerman, a real estate salesman, asked Robertson if she was interested in selling her property. Robertson said she might be. Zimmerman came to Robertson with an offer by Velten to buy the property. Both parties signed a contract for sale. Zimmerman told Robertson he was being paid a commission by Velten. Before the deal on the property was to close, Robertson asked for a copy of the agreement between Zimmerman and Velten, but they refused. Robertson refused to go through with the deal. Velten sued, claiming there was a valid contract. Robertson said that Zimmerman violated his fiduciary duty to her to disclose his interests. Is the deal valid?
Answer
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Step-by-step explanation:
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Suppose that Taggart Transcontinental currently has no debt and has an equity cost of capital of 10%. Taggart is considering borrowing funds at a cost of 6% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieved a debt -to-value ratio of 20%, then Taggart's levered cost of equity would be closest to:A) 8.0%B) 9.2%C) 10.0%D) 11.0%
Answer:
Option (D) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 10%
Levered cost of equity:
= 10% + ( 10% - 6%) × 0.2
= 10.8%
Therefore, Taggart's levered cost of equity would be closest to 11%.
Under perfect capital markets, Taggart's levered cost of equity after borrowing at a 6% interest rate with a debt-to-value ratio of 20% would be 11%. This result is obtained using the Modigliani-Miller theorem, which adjusts the unleveraged cost of capital with the debt-induced financial risk.
Explanation:The levered cost of equity represents the returns required by equity investors after considering the financial risk associated with the firm's debt. To calculate the new levered cost of equity after borrowing at a certain interest rate, the Modigliani-Miller theorem is usually used.
The formula is Relevered = Reunlevered + (Reunlevered - Rd) *(Debt/Equity). In this case, Reunlevered (unleveraged cost of capital) is 10%, the borrowing cost (Rd) is 6%, and Debt/Equity ratio is 0.25 (because Debt/Asset ratio given is 20%, hence in a scenario with perfect capital markets, Debt/Equity becomes 20%/80%, which equals 0.25).
Applying these values to the formula gives Relevered = 10% + (10% - 6%) * 0.25 = 11%. Therefore, the levered cost of equity is 11% making the correct choice D) 11.0%.
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Which of the following is an example of the gambler’s fallacy? Question 20 options: "I know the chances of winning the lottery are small, but someone has to win it and I could be the one!" "I’ve gotten a low number the last eight times I’ve rolled the dice, so a high number is coming up soon!" "There’s an equal chance for any team to win the league’s championship." "The best strategy at the horse races is to bet in the same way as the crowd is betting."
Answer:
THE LOTTERY ONE #IM 13 MY SISTERS IN COLLAGE
Explanation:
The Gambler's Fallacy assumes past outcomes in a random process can affect future ones. The statement "I’ve gotten a low number the last eight times I’ve rolled the dice, so a high number is coming up soon!" reflects this fallacy, wrongly asserting that a high number is imminent following a string of low numbers.
Explanation:The Gambler’s Fallacy involves the incorrect belief that past outcomes in a random process can influence future outcomes. This fallacy is often present in situations involving chance and probability. For instance, if you flip a fair coin and it lands on heads five times in a row, the gambler's fallacy would be to assume that the next flip is more likely to be tails, when in reality, the probability is still 50-50 for each flip.
From the given options, the statement that represents the gambler’s fallacy is: "I’ve gotten a low number the last eight times I’ve rolled the dice, so a high number is coming up soon!" This is a classic example of Gambler's Fallacy, as it incorrectly assumes that after a string of low numbers, a high number is due, when in reality, each roll of dice is independent and has an equal chance of resulting in low or high numbers.
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The Lotus Point Condo Project will contain both homes and apartments. The site can accommodateup to 10,000 dwelling units. The project must contain a recreation project: either a swimming-tenniscomplex or a sailboat marina, but not both. If a marina is built, then the number of homes in theproject must be at least triple the number of apartments in the project. A marina will cost $1.2 million,and a swimming-tennis complex will cost $2.8 million. The developers believe that each apartment willyield revenues with a net present value of $48,000, and each home will yield revenues with a net presentvalue of $46,000. Each home (or apartment) costs $40,000 to build. Formulate an integer program tohelp Lotus Point maximize profits.
The Lotus Point Condo Project can be interpreted as an integer programming problem for maximizing profits. The problem can be modeled with variables representing homes, apartments, and the decision to build either a marina or a swimming-tennis complex. The resulting linear equation and constraints represent the profit and the project requirements respectively.
Explanation:The problem can be understood as a linear integer programming problem. In this type of problem, we are aiming to maximize or minimize a linear function, subject to certain linear constraints. Our function in this case is the profit, which we aim to maximize.
The variables for this integer program could be defined as follows:
H: Number of homes to be built in the project A: Number of apartments to be built in the project M: Binary decision variable for building marina (1 if yes, 0 if no) S: Binary decision variable for building swimming-tennis complex (1 if yes, 0 if no)
The objective function, which represents the profit, can be represented as follows:
Maximize Z = 46,000H + 48,000A - 40,000(H + A) - 1,200,000M - 2,800,000S
The constraints can be defined as follows:
H + A <= 10,000: The total number of dwelling units cannot exceed 10,000. H >= 3A*M: If a marina is built, the number of homes must be at least triple the number of apartments. M + S = 1: Either a marina or a swimming-tennis complex must be built, but not both.Learn more about Integer Programming here:
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Orlando Enterprises reports the following information at December 31, 2016:a. Requirement 1. What is the actual manufacturing overhead of Orlando Enterprises?The actual manufacturing overhead of Orlando Enterprises is_______$b. Requirement 2. What is the allocated manufacturing overhead?The allocated manufacturing overhead is________$c. Requirement 3. Is manufacturing overhead underallocated or overallocated? By how much?Manufacturing overhead is by_______$
Answer:
1) C=C1+C2...+Cn
2) A=A1+A2...+An
3) Explanation is in the description
Explanation:
First, we have that the information given is incomplete. We need the information of the manufacturing overhead of Orlando Enterprises. Then, we are going to work on the problem without any specific data and give a general answer that will serve for any such data.
The attached table shows a way to represent the information of the manufacturing expenses, where the left column represents the current costs and the right column the allocated costs.
1) Current manufacturing overhead is then given by:
C=C1+C2...+Cn
2) 2) The allocated manufacturing overhead is given by:
A=A1+A2...+An
3) Finally, to determine if manufactured overhead is underallocated or overallocated:
X=C-A
If x>0, the manufactured overhead is udercalled.
Record the following transactions for Sparky’s Pet Shop. Date Transaction August 1 Purchased $6,000 of merchandise on account, terms 2/10, n/30. 3 Returned $1,500 of merchandise purchased on August 1 due to defects. 7 Recorded cash sales for the first week of August, $9,750; cost of the merchandise was $4,000. 10 Made sale on account to a local breeder for $500, terms 1/10 net 30; cost of the merchandise was $200. 11 Paid for the merchandise purchased on August 1, less return. 20 Received payment from sale of August 10.
The transactions listed are common retail transactions that include purchases, sales (cash and credit), merchandise returns, and receipts of payment. Each transaction has specific impacts on Sparky's Pet Shop's financial position in terms of cash, merchandise inventory, accounts payable, and accounts receivable.
Explanation:The first transaction was a purchase on account from a supplier for $6,000 of merchandise with terms 2/10, n/30. This means Sparky's Pet Shop can take a 2% discount if they pay within 10 days but the full amount is due within 30 days.
On August 3, Sparky's Pet Shop returned $1,500 of defective merchandise. So, the new amount due to the supplier is $4,500 ($6,000-$1,500).
On August 7, the store recorded cash sales of $9,750, this increased the cash balance and decreased the inventory by the merchandise cost of $4,000.
On August 10, they sold items on account to a local breeder for $500 on credit, terms 1/10 n/30 with a cost of $200.
On August 11, payment was made for the merchandise purchased on August 1, the amount that was paid is $4,500 which is the total cost of purchase less the returns.
Finally, on August 20, they received payment from the sale made on August 10, this decreased accounts receivable by $500 and increased cash by $500.
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Crane Company has 504000 shares of $10 par value common stock outstanding. During the year Crane declared a 16% stock dividend when the market price of the stock was $34 per share. Three months later Crane declared a $0.60 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
Answer:
$3,092,544
Explanation:
The computation of the decreased in retained earning is shown below:
= (Number of shares × stock dividend percentage × market price of the stock) + (Number of shares × current year dividend × cash dividend)
= (504,000 × 0.16 × $34) + (504,000 × 1.16 × $0.60)
= $2,741,760 + 350,784
= $3,092,544
Simply we added the two amount based on before 3 months later and after 3 months later
The 1.16 is computed below:
= 1 + 0.16
= 1.16