Answer:
-go to sales
-select the cutomers tab
Explanation:
kapoy explain iparok ka ron
What do externalities indicate?
a. resource immobility
b. a market failure
c. a lack of information
d. public goods
Answer:
They indicate B. A market failure
Assume that John deposits $8,000 into an account that has a 2.4% annual interest rate for 8 years. (a) If the interest is compounded annually, there will be $ in the account. (b) If the interest is compounded monthly, there will be $ in the account. (c) If the interest is compounded weekly, there will be $ in the account. (d) If the interest is compounded daily, there will be $ in the account. (e) If the interest is compounded continuously, there will be $ in the account.
Answer:
a) Compounded Annually = $9671.41
b) Compounded Monthly = $9691.51
c) Compounded Weekly = $9692.93
d) Compounded Daily = $9693.30
e) Compounded Continuously = $9693.36
Explanation:
Solution:
This question is very simple. We just need to know the basic formula.
Data Given:
P = Principal Amount = $8000
i = interest rate = 2.4% annual
n = period or year = 8 years.
So, our basic formula is:
A = P [tex](1 + \frac{r}{100}) ^{n}[/tex]
a) Compounded Annually.
A = P [tex](1 + \frac{r}{100}) ^{n}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100}) ^{8}[/tex]
A = $9671.41
b) Compounded Monthly:
1 year = 12 months.
A = P [tex](1 + \frac{r}{100*12}) ^{n*12}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*12}) ^{8*12}[/tex]
A = $9691.51
c) Compounded Weekly:
1 year = 52 weeks
A = P [tex](1 + \frac{r}{100*52}) ^{n*52}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*52}) ^{8*52}[/tex]
A = $9692.93
d) Compounded Daily:
1 year = 365 days
A = P [tex](1 + \frac{r}{100*365}) ^{n*365}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*365}) ^{8*365}[/tex]
A = $9693.30
e) Compounded Continuously:
For this we have following formula:
A = P[tex]e^{\frac{n*r}{100} }[/tex]
A = P[tex]e^{\frac{8*0.024}{100} }[/tex]
A = $9693.36
corporation borrowed money through an 8-month, 9% note for $100,000 on October 1, 2020. The note is due on May 30, 2021. The correct adjusting entry at year-end, December 31, 2020 (assuming no other adjustments had been made) would include an: Select one: a. Decrease to interest payable for $6,000 b. Increase to interest expense for $3,750 c. Increase to interest payable for $9,000 d. Increase to interest payable for $2,250 e. Decrease to cash for $6,000
Answer:
d. Increase to interest payable for $2,250
Explanation:
At year end which is December 31, 2020, the company has incurred an interest expense of 3 months on the amount borrowed since October 1 to December 31 is a period of three months.
As a result, the interest expense to be accrued for is computed thus:
accrued interest expense= $100,000*9%*3/12
accrued interest expense=$2,250
The appropriate entries would to debit(increase) expense with $2,250 while interest payable is credited(increase) with the same amount
The NPV and IRR method occasionally do not agree on accept/reject decisions when evaluating an investment proposal.
True or False?
The NPV and IRR method occasionally do not agree on accept/reject decisions when evaluating an investment proposal. The given statement is False.
Why positive NPV should be accepted?A project or venture has a positive NPV if the estimated earnings, discounted for their present value, are more than the anticipated costs, also expressed in today's currency. A positive NPV indicates an investment that is likely to be successful. Net loss will arise from an investment with a negative NPV.
The total of the investment's anticipated cash inflows and outflows, discounted back to their present value at a risk-adjusted rate, is known as the net present value. Project acceptance is granted if the NPV exceeds $0. The project is turned down in any other case.
Thus, the given statement is False.
Learn more about NPV and IRR here:
https://brainly.com/question/13739087
#SPJ5
Assume that the risk-free rate of interest is 3% and the expected rate of return on the market is 15%. I am buying a firm with an expected perpetual cash flow of $2,000 but am unsure of its risk. If I think the beta of the firm is 0.8, when in fact the beta is really 1.6, how much more will I offer for the firm than it is truly worth
Answer:
The correct solution is "$6,564.01". A further solution is given below.
Explanation:
The given values are:
beta,
= 1.6
market return,
= 15%
cash flow,
= $2,000
risk free rate of interest,
= 3%
Now,
The stock return will be:
= [tex]3+ 1.6\times (15-3)[/tex]
= [tex]3+ 1.6\times 12[/tex]
= [tex]22.2 \ percent[/tex]
The actual worth of the firm will be:
= [tex]\frac{cash \ flow}{rate \ of \ return}[/tex]
= [tex]\frac{2000}{22.2 \ percent}[/tex]
= [tex]\frac{2000}{0.222}[/tex]
= [tex]9,009[/tex]
With 0.8 beta, the stock return will be:
= [tex]3+ 0.8\times (15-3)[/tex]
= [tex]3+ 0.8\times 12[/tex]
= [tex]12.6 \ percent[/tex]
So that I'm paying for the firm,
= [tex]\frac{2000}{12.6 \ percent}[/tex]
= [tex]\frac{2000}{0.126}[/tex]
= [tex]15,573.01[/tex] ($)
Hence,
I'm paying,
= [tex]15,573.01-9,009[/tex]
= [tex]6,564.01[/tex] ($)
ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total materials (direct and indirect) purchased $ 91,900 Indirect materials issued to production 11,900 Total materials issued to production 134,000 Beginning materials inventory 54,000 The debit to the Factory Overhead account is: Multiple Choice
Answer:
i would think from around 50k
to 100k
Explanation:
Holly files married filing jointly and reports income of $300,000 ($340,000 AGI - $40,000 itemized deductions) before the deduction for qualified business income. She has no capital gains or dividends included in taxable income. Holly's engineering consulting service generates $20,000 of qualified business income. She paid no wages during the current year. What is Holly's deduction for qualified business income
Answer:
$4,000
Explanation:
The computation of the deduction for qualified business income is shown below:
In this the lower amount should be considered
20% of net income or 20% of qualified business income
20% of $300,000 or 20% of $20,000
So the lower amount is $4,000
hence, the same would be represented as a deduction
AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 230 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 230 pounds was $32,844, determined as follows:
Direct materials (230 x $132)$30,360
Conversion (230 x 60% x $18)2,484 $32,844
During May, the Casting Department was charged $350,000 for 2,500 pounds of alloy and $19,840 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,530 pounds of finished castings to the Machining Department. The May 31 inventory in process was 44% complete as to conversion.
a. Prepare the following May journal entries for the Casting Department:
1. The materials charged to production
2. The conversion costs charged to production
3. The completed production transferred to the Machining Department
b. Determine the Work in Process—Casting Department May 31 balance.
c. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).
Answer:
AccuBlade Castings Inc.
Casting Department
a. Journal Entries for:
1. The materials charged to production:
Debit WIP $350,000
Credit Raw materials $350,000
To record the cost of materials charged to production.
2. The conversion costs charged to production:
Debit WIP $49,600
Credit Direct Labor $19,840
Credit Manufacturing overhead $29,760
3. Debit Machining Department $402,827
Credit WIP $402,827
To record the transfer of completed units to the machining department.
b. Work-in-Process - Casting Department balance = $29,616
c. The change in the costs per equivalent unit for direct materials and conversion from April:
Direct Materials Conversion
April cost per equivalent unit $132.00 $18.00
May cost per equivalent unit $139.33 $19.89
Change in cost per equivalent unit $7.33 increase $1.89 increase
The cost per equivalent unit increased in both direct materials and conversion for May when compared to April's.
Explanation:
a) Data and Calculations:
Units
Beginning WIP 230
Started 2,500
Transferred 2,530
Ending WIP 200
Equivalent units of production:
Units Direct Materials Conversion
Transferred 2,530 2,530 (100%) 2,530 (100%)
Ending WIP 200 200 (100%) 88 (44%)
Total equivalent unit 2,730 2,618
Cost of production:
Direct Materials Conversion Total
Beginning WIP$30,360 (230*$132) $2,484 (230*60%*$18) $32,844
Started 350,000 (2,500*$140) 49,600 (2,500*$19.44) 399,600
Total costs $380,360 $52,084 $432,444
Cost per equivalent unit:
Direct Materials Conversion
Total costs $380,360 $52,084
Equivalent units 2,730 2,618
Cost per equivalent unit $139.33 $19.89
Allocation of production costs:
Direct Materials Conversion Total
Units transferred out $352,505(2,530*$139.33) $50,322 (2,530*$19.89) $402,827
Ending WIp 27,866(200*$139.33) $1,750 (88*$19.89) $29,616
Total costs $380,371 $52,072 $432,443
Pamela, the manager of an electronics store in California, has redesigned the jobs of her sales staff so that they have the authority to resolve customer complaints without first getting the approval from management. (In the past, sales staff did not have the authority to issue refunds or replace merchandise). Which job design technique does this represent
Answer:
Job enrichment
Explanation:
Job enrichment is defined a a way of working in an organisation where the individual is motivated to employ their skill in solving problems and working with clients.
In this system employees have some autonomy on how to resolve customer problem.
Thereby fostering accountability and sense of responsibility non the staff.
In the given scenario sales staff now have have the authority to resolve customer complaints without first getting the approval from management.
This is Jobe enrichment strategy.
Parkman Sporting Goods is preparing its annual report for its 2021 fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items: Required: Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on t
Answer:
Entries disclosed in the summary of significant accounting policies note as the term implies, have to do with the accounting method a company uses to calculate certain metrics.
Entries that are not shown in the financial statements but are however important to know, will be put in a separate disclosure note.
1. A related-party transaction. B
Important but cannot be put into the financial statements so will go to a separate disclosure note.
2. Depreciation method. - A
Has to do with an accounting method used so will go to the significant accounting policies notes.
3. Allowance for uncollectible accounts. - C
Goes to balance sheet to reduce Accounts Receivables.
4. Composition of investments. - B
Another important information that does not go into financial statement so will go to separate disclosure.
5. Composition of long-term debt. - B
Important but not in financial statement. Separate disclosure.
6. Inventory costing method. - A
Shows accounting method used so will go to significant policies notes.
7. Number of shares of common stock authorized, issued, and outstanding. - C
Equity section of Balance sheet.
8. Employee benefit plans. - B
Important but not in financial statement. Separate disclosure.
Crane Company, a computer services company, entered into these transactions during May 2017, its first month of operations.
1. Stockholders invested $32,000 in the business in exchange for common stock of the company.
2. Purchased computers for office use (recorded as Equipment) for $26,600 from Ladd on account.
3. Paid $5,500 cash for May rent on storage space.
4. Performed computer services worth $18,400 on account.
5. Performed computer services for Wharton Construction Company for $5,300 cash.
6. Paid Western States Power Co. $8,500 cash for energy usage in May.
7. Paid Ladd for the computers purchased in (2).
8. Incurred advertising expense for May of $1,800 on account.
9. Received $10,200 cash from customers for contracts billed in (4).
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the far right column.
Assets Liabilities Stockholders Equity
Cash + Accounts + Equipment = Accounts + Common + Retained Earnings
Receivable Payable Stock Revenue Expenses
Using the following tabular analysis to show the effect of each transaction on the accounting equation is as follows:
Assets = Liabilities + Stockholders Equity
No. Cash + Accounts + Equipment = Accounts + Common + Retained
Receivable Payable Stock Earnings
Revenue Expenses
1. $32,000 $32,000
2. $26,600 $26,600
3. -$5,500 -$5,500
4. $18,400 $18,400
5. $5,300 $5,300
6. -$8,500 -$8,500
7. -$26,600 -$26,600
8. $1,800 -$1,800
9. $10,200 -$10,200
$6,900 $8,200 $26,600 $1,800 $32,000 $23,700 -$15,800
Summary of transactions:Total Assets = $41,700 ($6,900 + $8,200 + $26,600)
Liabilities = $1,800
Common Stock = $32,000
Net Income = $7,900 ($23,700 -$15,800)
Total liabilities and equity = $41,700
Transaction Analysis:1. Cash $32,000 Common stock $32,000
2. Equipment $26,600 Accounts Payable (Ladd) $26,600
3. Rent expenses $5,500 Cash $5,500
4. Accounts Receivable $18,400 Service Revenue $18,400
5. Cash $5,300 Service Revenue $5,300
6. Utility expense $8,500 Cash $8,500
7. Accounts Payable (Ladd) $26,600 Cash $26,600
8. Advertising Expense $1,800 Accounts Payable $1,800
9. Cash $10,200 Accounts Receivable $10,200
Thus, the accounting equation remains in the balance after each transaction.
Learn more about the accounting equation at https://brainly.com/question/24401217
#SPJ1
The three steps for reframing a conversation with an angry customer are; here’s who we are here’s what we do and here’s how we can help
Select one:
True
False
The three steps for reframing a conversation with an angry customer are; here’s who we are, here’s what we do and here’s how we can help is the correct statement.
Who are customers?Customers are the people that buys some goods or services from the shop or anywhere. Customers always feel satisfied and accomplished with the overwhelming experience of shopping. If the customers are happy, they become permanent customers.
Thus, the statement is true.
For more information about Customers, click here:
https://brainly.com/question/15047886
#SPJ2
Question 4 of 10
Which budget strategy will reduce a country's national debt the most?
A. Raising taxes while lowering spending
B. Lowering both taxes and spending
C. Lowering taxes while raising spending
D. Raising both taxes and spending
Answer: raising taxes while lowering spending
Explanation: I just got it right on A p e x
(Blank) exchange rates are determined by (blank)
forces and fluctuate against each other day
to day.
Dirty; government
Fixed; internal
Fixed; market
Floating; market
Answer:
Floating; market
Explanation:
A floating exchange rate system refers to the method of allowing the market forces to determine the exchange rate of a country. The government does influence the exchange rate. The market forces of demand and supply determine the exchange rate.
The foreign exchange market or Forex is the market for currencies. Demand and supply forces at the Forex fix the exchange rate of a floating currency.
On August 13, 2016, Bonita Services Co. purchased office equipment for $1390 and office supplies of $230 on account. Which of the following journal entries is recorded correctly and in the standard format? a. Equipment 1390 Supplies 230 Accounts Payable 1620 b. Accounts Payable 1620 Equipment 1390 Supplies 230 c. Equipment 1390 Supplies 230 Accounts Payable 1620 d. Equipment 1390 Account Payable 1620 Supplies 230
Answer:
a. Equipment 1390 Supplies 230 Accounts Payable 1620
Explanation:
Based on the information given if On August 13, 2016 the Company purchased office equipment for the amount of $1390 and office supplies of the amount of $230 on account. The journal entries that is recorded correctly and in the standard format will be :
Dr Equipment $1,390
Dr Supplies$230
Cr Accounts Payable $1,620
($1,390+$230)
In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 11,400 of these products during the year. By year-end of 2021, 8,500 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the expense that Holyoak should report for its promotional coupons in its 2021 income statement
Answer: $193,800
Explanation:
Based on the information given in the question, the expense that Holyoak should report for its promotional coupons in its 2021 income statement would be calculated as:
= 11400 × 85% × 20
= 11400 × 85/100 × 20
= 11400 × 0.85 × 20
= $193,800
XYZ just deposited $3,700 in an account that will earn 7.1 percent per year in compound interest for 9 years. If Svetlana deposits $4,000 in an account in 3 years that earns simple interest, then how much simple interest per year must Svetlana earn to have the same amount of money in 9 years from today as XYZ will have in 9 years from today
Answer:
11.92%
Explanation:
The computation of the simple interest per year is shown below:
Future value would be
= Deposited Amount × (1 + rate of interest)^years
= $3,700 × (1 + 7.1%)^9
= $6,859.73
Now the simple interest is
= (Future value ÷ deposit) - 1 ÷ number of year
= ($6,859.73 ÷ $4,000) - 1 ÷ 9
= 0.71493 ÷ 9
= 11.92%
Are marketing and sales the same in marketing
Answer:
marketing is building awareness of your organization and brand to potential customers. Sales is turning that viewership into a profit, by converting those potential customers into actual ones.
Explanation:
One problem with using market values to measure GDP is that A. some useful goods and services are not sold in markets. B. you cannot compare completely heterogeneous goods by using their dollar values. C. prices for some goods change every year. D. market values of exported goods are usually priced in foreign currencies.
Answer:
C. prices for some goods change every year.
Explanation:
The reason why the real GDP (GDP adjusted to inflation) is a much better economic index than nominal GDP is that prices change over time, even if the quantities produced do not. It is actually possible for nominal GDP to increase even if total production output decreases due solely to high inflation rates.
fter 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simulation in the analysis of commercial airport accidents on runways. He estimates his average cost of new capital at 8% per year for physical simulation projects, that is, where he physically reconstructs the accident using scale versions of planes, buildings, vehicles, etc. He has established 17% per year as the MARR. What net rate of return on capital investments for physical simulation does he expect
Answer:
The answer is "9%".
Explanation:
Please find the complete question in the attached file.
The formula for calculating the net return rate:
[tex]\to \text{Net return rate= MARR - Capital Cost}[/tex]
[tex]= 17\% - 8\% \\\\= 9\%[/tex]
Therefore, the net return rate is 9%.
A merger of two firms may increase economic efficiency by A decreasing average total cost through an increase in economies of scale B decreasing output to reduce marginal cost and equalize price C increasing economic profits but decreasing consumer surplus D increasing consumer surplus by decreasing economic profits E increasing consumer surplus by shifting the demand curve for the product to the right
Answer:
A decreasing average total cost through an increase in economies of scale
Explanation:
In the case when two firms would be merged so this would rise in economic efficiency this would result in reduction in the average total cost via rise in the economies of scale
So according to the given situation, the option A is correct
And the remaining options are incorrect
The same would be relevant
A merger of two firms may increase economic efficiency by decreasing average total cost through an increase in economies of scale. Thus, option (a) is correct.
When a bigger company with more output can lower average costs, economies of scale happen. Prices for customers can be reduced thanks to decreased average costs.
A merger can help a business grow in size and benefit from a variety of reasons, including financial economies, organizational economies, technological economies, and economies of scale when purchasing goods.
A merger can result in increased earnings for the company by lowering expenses, which can then be put toward R&D expenditures, enhancing product quality, and commercial expansion.
As a result, the significance of the merger of two firms may increase economic efficiency are the aforementioned. Therefore, option (a) is correct.
Learn more about on economic efficiency, here:
https://brainly.com/question/30053857
#SPJ6
who was a main practitioner of virtue ethics?
Explanation:
Virtue ethics began with Socrates, and was subsequently developed further by Plato, Aristotle, and the Stoics. Virtue ethics refers to a collection of normative ethical philosophies that place an emphasis on being rather than doing.
Stevens placed an ad in a literary magazine offering $7,400 for a complete set of Vacation in Paradise, a five volume set. Adams, who was not aware of the offer, gave to Stevens four volumes of the Vacation in Paradise set as a birthday present. Adams was informed of the offer at some point, obtained the missing volume, brought the volume to Stevens and requested the $7,400 payment. Stevens refused. If Adams sues, will he prevail
Answer:
Yes he will prevail because the advert placed is a unilateral contract
Explanation:
A unilateral contract is one that has only one promisor who receives a promise for his from the offeror. It is usually settlement for a particular service or product.
On the other hand bilateral agreement has both parties as the promisor and offeror. Meaning both of them have conditions that must be fulfilled in the contract by the other person.
In the given instance Stevens placed an ad in a literary magazine offering $7,400 for a complete set of Vacation in Paradise, a five volume set.
Any service short of this can be viewed as a failure in the contract.
Adams gave to Stevens four volumes of the Vacation in Paradise set as a birthday present. Adams was informed of the offer at some point, obtained the missing volume, brought the volume to Stevens.
Since Adams had not initially satisfied conditions set by Stevens, Stevens can refuse to make the $7,400 payment
Compute darryl's total social security and Medicare taxes for the third quarter, if she is self-employed and earns $1,020.00 on a weekly basis.
Answer and Explanation:
The computation of the total security and medicare tax is shown below:
Here we assume the social security and medicare tax is 12.4% and 2.9% respectively
So, first we compute the total earnings which is
= $1,020 × 13 weeks
= $13,260
Now the taxes are
= $13,260 × 12.4% + $13,260 × 2.9%
= $1,644.24 + $384.54
= $2,028.78
(a) Purchased $110 of supplies for cash. –$110 $0 (b) Recorded an adjusting entry to record use of $20 of the above supplies. enter a dollar amount enter a dollar amount (c) Made sales of $1,500, all on account. enter a dollar amount enter a dollar amount (d) Received $850 from customers in payment of their accounts. enter a dollar amount enter a dollar amount (e) Purchased equipment for cash, $2,550. enter a dollar amount enter a dollar amount (f) Recorded depreciation of building for period used, $740.
Question Completion:
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income.
Answer:
Effects of transactions on cash and net income:
(a) Purchased $110 of supplies for cash.
Cash–$110 Net income $0
(b) Recorded an adjusting entry to record use of $20 of the above supplies.
Cash - $0 Net Income -$20
(c) Made sales of $1,500, all on account.
Cash -$0 Net Income +$1,500
(d) Received $850 from customers in payment of their accounts.
Cash +$850 Net Income $0
(e) Purchased equipment for cash, $2,550.
Cash -$2,550 Net Income $0
(f) Recorded depreciation of building for period used, $740.
Cash $0 Net Income -$740
Explanation:
As stated earlier, business transactions that affect earnings do not necessarily affect cash. This fact is demonstrated in the above examples. Unless the transaction is for cash and affects a revenue or expense account, it will not affect cash and earnings at the same time. An example of a transaction that affects both is the sale of goods for cash. This will increase the cash balance as well as boasting the earnings. Another example is the cash payment for rent expense. This will reduce the cash balance as well as reduce the earnings.
Summarise the following passage in on more than 60w words and supply an appropriate title:every second,1 hectare of the world's rainforest is destroyed.thats equivalent to two football fields,an area the size of new York city is lost every day.in a year,that adds up to 31 million hectares-more than the land area of poland.this alarming rate of destruction has serious consequences for the environment, scientists estimate, for example, that 137 species of plant,insect or animal become extinct every day due to logging. In British Columbia, where,since become extinct, and the habitats of grizzly bears,wolves and many other creatures are threatened. Logging, however,provides jobs,profits, taxes for the government and cheap products of all kinds for consumers, so the government is reluctant to restrict or control it.
Answer:
I don't know...
Explanation:
I'm sorry...............
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $530,000 to develop and is expected to have annual net cash flow of $60,000. The Beta project will cost $170,000 to develop and is expected to have annual net cash flow of $18,000. The company is very concerned about their cash flow. Calculate the payback period for each project. Which project is better from a cash flow standpoint
Answer: See Explanation
Explanation:
The payback period for both projects would be calculated as:
Alpha Project
Cost = $530,000
Annual net cash flow = $60,000
Payback period = Cash / Annual net cash flow
= $530,000 / $60,000
= 8.83
Beta Project
Cost = $170,000
Annual net cash flow = $18,000
Payback period = Cash / Annual net cash flow
= $170,000 / $18,000
= 9.4
We can see that Alpha Project is better as the payback period is lesser than Beta project
Please answer thank you !!!
acquired: Firm A has a margin of 11%, sales of $610,000, and ROI of 17%. Calculate the firm's average total assets. Firm B has net income of $72,000, turnover of 1.40, and average total assets of $920,000. Calculate the firm's sales, margin, and ROI. Firm C has net income of $136,000, turnover of 2.01, and ROI of 23.40%. Calculate the firm's margin, sales, and average total assets.
Answer:
1. Firm's average total assets = Net Income/ROI = $610,000*0.11 / 0.17 = $394,705.88
2. Sales = Assets turnover ratio * Average total assets = 1.40*920,000 = $1,288,000
Margin = Net Income / Sales = $72,000/$1,288,000 = 0.06
ROI = Net Income / Average Total Assets = $72,000/920,000 = 0.078
3. Average Total Assets = Net Income / ROI = $136,000/23.40% = 136,000/0.2340 = $581,196.58
Sales = Assets turnover ratio * Average total assets= 2.01*$581,196.58 = $1,168,205.12
Margin = Net Income / Sales = $136,000/$1,168,205.12 = 0.1164
The market price of a security is $74. Its expected rate of return is 20.2%. The risk-free rate is 3% and the market risk premium is 6.5%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)
Answer:
The market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged) will be $44.10.
Explanation:
Note: This question is not complete. The complete question is therefore presented before answering the question as follows:
The market price of a security is $74. Its expected rate of return is 20.2%. The risk-free rate is 3% and the market risk premium is 6.5%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)
Assume that the stock is expected to pay a constant dividend in perpetuity.
Explanation of the answer is now given as follows:
Since the correlation coefficient with the market portfolio doubles (and all other variables remain unchanged), it implies that beta and also the risk premium will also double.
From the question, we can obtain:
Current risk premium = Expected rate of return - Market risk premium = 20.2% - 6.5% = 13.70%
As the current risk premium will double, we have:
New risk premium = Current risk premium * 2 = 13.70% * 2 = 27.40%
Also, we have:
New discount rate = New risk premium + Market risk premium = 27.40% + 6.5% = 33.90%
Since it is assumed that the stock is expected to pay a constant dividend in perpetuity, the dividend can therefore e calculated as follows:
Dividend = Current market price * Current expected rate of return = $74 * 20.2% = $14.95
The new market price of the security can now be calculated as follows:
New market price of the security = Dividend / New discount rate = $14.95 / 33.90% = $44.10
Therefore, the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged) will be $44.10.