Answer:
Investment equals savings.
Explanation:
Marginal product of capital is the real rental price of the capital. It is equal to the real interest rate if the law of diminishing returns is prevailing in the economic system. In such case the investments will be equal to savings. If the real interest rate is increased by the marginal product of capital then depreciation rate and risk premium accounts for the difference.
________ affords the marketing manager an opportunity to develop a rational pricing strategy across acomplete line of related items.
Answer: product line pricing
Explanation:
Product line pricing affords the marketing manager an opportunity to develop a rational pricing strategy across acomplete line of related items.
Product line pricing simply means when goods and services provided by a particular company or business are being separated into different cost or prices categories so that the consumers will have a mindset that the prices and costs represents the quality of the products.
This strategy is used to generate more profit to the company and to encourage customers to purchase the costlier products.
AB Builders, Inc., has 24-year bonds outstanding with a par value of $2,000 and a quoted price of 97.842. The bonds pay interest semiannually and have a yield to maturity of 6.80 percent. What is the coupon rate
Answer:
6.62%
Explanation:
Calculation for What is the coupon rate
First step is to calculate the semi-annual coupon payment on the bond using the formula for pmt in excel
= pmt(rate,nper,-pv,fv)
Rate = 6.80% / 2
Rate= 3.40%
nper = 24 *2
nper = 48
pv = 97.842%*2000
PV=$1,956.84
fv = $2000
Hence,
= pmt(3.40,48,-1956.84,2000)
pmt=66.164
Semi annually coupon payment = $66.164
Second step is to calculate Annual coupon payment
Annual coupon payment = 66.164 * 2
Annual coupon payment=$132.33 annually
Last step is to calculate the Coupon rate using this formula
Coupon rate = Annual Coupon Payment / Bond Par value * 100
Let plug in the formula
Coupon rate =132.33 / 2000
Coupon rate =6.62%
Therefore the coupon rate is 6.62%
1. Lulu started saving $200/month in a 401(k) earning 6% interest compounded monthly when she was 45 years old. How much will be in her account when she retires at age 65
Answer:
Lulu's account will be equal to $48,287.94
Explanation:
a) Data and Calculations:
Savings in 401(k) = $200 per month
Interest rate = 6% compounded monthly
Period of savings = 20 years
Future value is determined using online calculator:
Results
FV (Future Value) $48,287.94
PV (Present Value) $47,711.96
N (Number of Periods) 240.000
I/Y (Interest Rate) 0.005%
PMT (Periodic Payment) $200.00
Starting Investment $0.00
Total Principal $48,000.00
Total Interest $287.94
If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is the contribution margin ratio
Answer:
the contribution margin ratio is 42%
Explanation:
The contribution margin ratio is
= Sales ratio - variable cost ratio
= 100% - 58%
= 42%
As the sales comes by adding the variable cost and the contribution margin
So we takes the sales ratio be 100% so that the contribution margin ratio would come
hence, the contribution margin ratio is 42%
The same is to be considered
Consider the following two bonds. Bond A returns $1000 (coupon) per year for the first 9 years and $5000 (face value) in the 10th year, and Bond B returns $900 (coupon) per year for the first 19 years and $10000 in the 20th year. Compare the present values of the bonds when the interest rate r is 0.1 and 0.2.
Answer:
Present value of bond A:
interest rate = 10%
PV of face value = $5,000/1.1¹⁰ = $1,927.72
PV of coupon payments = $1,000 x 5.7590 (PV annuity factor, 10%, 9 periods) = $5,759
present value = $7,686.72
interest rate = 20%
PV of face value = $5,000/1.2¹⁰ = $807.53
PV of coupon payments = $1,000 x 4.0310 (PV annuity factor, 20%, 9 periods) = $4,031
present value = $4,838.53
Present value of bond B:
interest rate = 10%
PV of face value = $10,000/1.2¹⁰ = $1,615.06
PV of coupon payments = $900 x 8.3649 (PV annuity factor, 10%, 19 periods) = $7,528.41
present value = $9,143.47
interest rate = 20%
PV of face value = $10,000/1.2²⁰ = $260.84
PV of coupon payments = $900 x 4.8435 (PV annuity factor, 20%, 19 periods) = $4,359.15
present value = $4,619.99
Shelia purchases $50,000 of newly issued Gingo Corporation bonds for $45,000. The bonds have original issue discount (OID) of $5,000. After Shelia amortized $2,300 of OID and held the bonds for four years, she sold the bonds for $48,000. What is the amount and character of her gain or loss
Answer: $700
Explanation:
To solve the question, first, we have to calculate the adjusted basis of the bond and this will be the addition of the issued price and the ammortized bond. Therefore, adjusted basis will be:
= $45,000 + $2,300
= $47,300
Then, we will calculate the gain that's gotten on the bond sale. This will be the difference between the sales price and the computed adjusted basis.
= $48,000 - $47,300
= $700
Health and Wealth Company is financed entirely by common stock that is priced to offer a 18% expected return. If the company repurchases 30% of the common stock and substitutes an equal value of debt yielding 8%, what is the expected return on the common stock after refinancing?
Answer:
The expected return is 22.29%
Explanation:
The computation of the expected return on the common stock after refinancing is shown below:
= Expected return + (Debt ÷ Equity) × (Expected return - debt yield)
= 18% + (0.30 ÷ 0.70) × (18% - 8%)
= 18% + (0.30 ÷ 0.70) × 10%
= 22.29%
Hence, the expected return is 22.29%
We simply applied the above formula
What are some of the advantages that a strong Brazilian currency does for its population, and what are some of the challenges of having a strong currency relative to another currency
Explanation:
The currency used in the Brazilian economy is the Real. In recent years, the country has experienced a recession caused by high tax burdens and political instability, which has made the Brazilian currency one of the most devalued in relation to the US dollar.
For the population there are many disadvantages, such as the increase in international travel, greater difficulty in importing foreign products and greater export, which also makes Brazilian products more expensive for the population and reduces the added value of exports.
Therefore, it is necessary that there is an economic study that aims at the appreciation of the real against the exchange rate, which values the Brazilian economy, makes Brazilian products more accessible to the population, stabilizes inflation rates and allows for greater imports of raw materials.
According to the assumptions of the quantity theory of money, if the money supply increases by 5 percent, then a. nominal and real GDP would rise by 5 percent. b. neither nominal GDP nor real GDP would change. c. nominal GDP would rise by 5 percent; real GDP would be unchanged. d. nominal GDP would be unchanged; real GDP would rise by 5 percent.
Answer:
c. nominal GDP would rise by 5 percent; real GDP would be unchanged.
Explanation:
According to the quantity theory of money, the price level in an economy is directly related to the amount of money circulating in that economy.
If the money supply increases by 5 percent, what this will cause is an increase in the general price level of the economy, in other words, inflation, leading to a similar rise in nominal GDP, but leaving real GDP unchanged, since GDP is based on a constant year prices, unless the actual production of goods and services also increases, in which case, it would not necessarily increase by exactly 5 percent.
Consider a portfolio with 80% invested in asset X and 20% invested in asset Y . The volatility of each asset is the same and equals to 0.2. The correlation coefficient between the two asset returns is 50%. What is the portfolio volatility
Answer:
The portfolio volatility is 26.83%.
Explanation:
The portfolio volatility refers to the standard deviation of the rate of return of an investment portfolio.
To calculate the standard deviation, the variance of the of the return on the portfolio is first calculated using the following formula:
Portfolio return variance = (WX^2 * SDX^2) + (WY^2 * SDY^2) + (2 * WX * SDX * WY * SDY * CFxy) ......................... (1)
Where;
WX = Weight of Stock X = 80%
WY = Weight of Stock Y = 20%
SDX = Standard deviation of stock X return = 0.2
SDY = Standard deviation of stock Y return = 0.2
CFxy = The correlation between stock X and stock Y = 50%
Substituting all the values into equation (1), we have:
Portfolio return variance = (80%^2 * 0.2^2) + (20% * 0.2) + (2 * 80% * 0.2 * 20% * 0.2 * 50%)
Portfolio return variance = 0.072
The standard deviation of the return on this portfolio can be calculated as using the following formula:
[tex]PRSD =\sqrt{PRV}[/tex] ........................... (2)
Where;
PRSD = Portfolio return standard deviation = ?
PRV = Portfolio return variance = 0.072
Substituting the values into equation (2), we have:
[tex]PRSD=\sqrt{0.072}[/tex]
PRSD = 0.2683, or 26.83%
Therefore, the portfolio volatility is 26.83%.
The funding sources for a Capital Projects Fund include proceeds of a general obligation bond issuance and a capital grant from the State Highway Trust. Assuming there are no other funding sources and expenditures have not exceeded such resources, the ending fund balance should be reported as:_______
a. non-spendable.
b. restricted.
c. committed.
d. assigned.
Answer:
b. restricted.
Explanation:
As we know that for the capital projects fund, the funding sources involve the proceeds with respect to the issuance of the particular liability bond also a capital grant from the trust of state highway
So here the ending fund balance would be reported as a restricted and the same is to be considered
Hence, the option b is correct
On January 1, 2021, Hodge Beanery received $8,000 from the Kennedy Company in exchange for a coffee roaster that it will deliver to Kennedy on December 31, 2021. Assuming that Hodge views the time value of money to be a significant component of this transaction, and that a 9% interest rate is applicable, how much deferred revenue would Hodge recognize on January 1, 2021
Answer:
the deferred revenue recognized is $7,339.45
Explanation:
The computation of the deferred revenue is shown below:
Revenue is $8,000
And,
Present value of $1 at 9% for 1 year 1 ÷ 1.09 is 0.917
So
The Deferred revenue to be recorded is
= Earnings × PVF factor
= $8,000 * 0.917
= $7,339.45
hence, the deferred revenue recognized is $7,339.45
We simply applied the above formula and the same is to be considered
Sanfran Company purchased inventory for . In addition they had purchase returns of and paid freightin of . Sanfran Company's net cost of purchases would be:
Answer:
The net cost of purchase is $123,000
Explanation:
The computation of the net cost of purchase is shown below:
Purchase cost of inventory $120,000
Less: Purchase return -$9,000
Add: Freight in cost $12,000
Net cost of purchases $123,000
hence, the net cost of purchase is $123,000
We simply applied the above equation so that the correct value could come
and the same is to be considered
Otis Corp. uses a periodic system and the FIFO method. Otis had beginning inventory of 30 units purchased at $120 each and made the following purchases during the year: Jan. 15: 34 units at $110 May 30: 61 units at $84 Oct. 20: 160 units at $60 Sales during the year totaled 271 units. What is the cost of ending inventory
Answer:
the cost of ending inventory is $840
Explanation:
The computation of the cost of ending inventory is shown below:
Total units available for sale is
= (30 units + 34 units + 61 units + 160 units)
= 285 units
And,
Sales units = 271 units
So,
Ending inventory units is
= 285 units - 271 units
= 14 units
Finally
Ending inventory cost is
= 14 units × $60
= $840
hence, the cost of ending inventory is $840
If all other factors are equal, an investor would expect which type of preferred stock to pay the highest stated dividend rate
Answer: a. Callable
Explanation:
A Callable stock will most likely have the highest stated dividend from the options listed. This is because a Callable stock by definition, can be bought/ called back by the company in the future at a fixed price if they want to.
This means that the owner of the share is at a disadvantage as the stock cannot increase past the value the company can call it back for and they could lose the stock to the company at anytime. The company will therefore offer a higher dividend for this inconvenience.
Companies frequently issue both preferred stock and common stock. What are the major differences in the rights of stockholders between these two classes of stock
Answer:
Preference Shares
They get a stated amount of dividend every period dependent on the income of the companyThis dividend is paid to them before dividends are paid to Common shareholdersThey cannot vote in the company for either directors or general mattersThey get preference over common shareholders in cases of liquidationCommon Shares
Common shares are equity interests in the company which means that they can vote on general and major issues matters as well as to elect directors.They get dividends based on company performance and after the preference shareholdersThey can transfer ownership of their stock to other individuals.An interest rate is 12% per annum with continuous compounding. What is the equivalent rate with semiannual compounding
Answer:
11.66%
Explanation:
The interest rate of continuous compounding is known as the effective interest rate and this is 12%. The interest equivalent of this, compunded a number of times in a year is known as the norminal rate.
The Nominal rate with semiannual compounding is calculated using a financial calculator as follows :
12% SHIFT + EFF%
P/YR = 2
SHIFT NOM% = 11.66%
The sportswear department had an opening inventory of $95,000 at cost with a markup of 45.5% on March 1. During the month, the buyer for the department purchased additional merchandise with a retail value of $50,000 with a 48% markup. Calculate the cumulative markup percent for March.
Answer:
46.16%
Explanation:
cost of opening inventory = $95,000
markup of the opening inventory = $95,000 x 45.5% = $43,225
the cost of the the month's purchase:
0.48 = ($50,000 - C)/C
0.48C = $50,000 - C
1.48C = $50,000
C = $50,000/1.48 = $33,784
markup of month's purchase = $50,000 -$33,784 = $16,216
cost of the total inventory = $95,000 + $33,784 = $128,784
total markup = $43,225 + $16,216 = $59,441
cumulative markup = $59,441 / $128,784 = 0.4616 = 46.16%
The United Auto Workers (UAW) and Ford Motor Company were negotiating a new agreement to address the auto industry woes during a severe economic downturn. Ford offered to consider delaying layoffs if the UAW agreed to changes in contractual work rules related to the jobs bank. This negotiation suggests the use of what conflict handling style
Answer:
Compromise
Explanation:
Conflict is simply a disagreement, Internal/external disaggregated that lead to from differences between individuals or groups of individuals regarding ideas, values or feelings.
Conflict handling Styles include Competing, Accommodating, Withdrawing, Compromising anf Collaborating
Compromising is a type of conflict resolution/ handling style is liken to a "lose-lose" situation. In this situation,there are where neither party involved achieves their goal. That is it strive to find a point or middle ground between meeting your own needs and meeting the needs of your group members.
You want to buy a car, and a local bank will lend you $10,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 5% with interest paid monthly. What will be the monthly loan payment
Answer:
$188.71
Explanation:
in order to calculate the monthly payment, we can use the present value of an annuity formula:
present value = monthly payment x annuity factor
monthly payment = present value / annuity factor
present value = $10,000PV annuity factor, 60 periods, 0.4167% = 52.9913monthly payment = $10,000 / 52.9913 = $188.7102222 = $188.71
The arrangement that manages projects within the existing organizational structure is __________ organization
Answer:
Functional Organization
Explanation:
The arrangement that manages projects within the existing organizational structure is Functional organization.
Features of Functional Organization
a. The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations.
b. Complex form of administrative organization compared to the other two.
c. Three authorities exist- Line, staff and function.
d. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise.
e. Principle of unity of command does not apply to such organization as it is present in line organization.
A firm offers terms of 1/25, net 40. a. What effective annual interest rate does the firm earn when a customer does not take the discount
Answer: 27.70%
Explanation:
The following can be deduced from the question:
Discount = 1%
We then calculate the interest rate based on the discount given in the question. This will be:
= 1%/(100% -1%)
= 1%/99%
= 0.01/0.99
= 0.0101
= 1.01%
Number of days given in respect for the interest = 40 - 25 = 15days
The effective annual interest will be calculated as:
= ((1 + int rate)^m) -1
= ((1 + 1.01%)^(365/15)) - 1
= (1.01)^(24.3) - 1
= 0.27702
= 27.70%
rue or False: Wages in the auto manufacturing industry would be less than those in the aircraft manufacturing industry. True False
Answer:
False
Explanation:
The wages who are offering in auto industry would be more than the aircraft industry as the wages between these two industries i.e. auto and aircraft would be equivalent to each other. But in that case if they are not equal so the workers who are getting high wages would select those industries
Hence, the given statement is false and the same is to be considered
Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. How much will Markley debit Work in Process Inventory in June
Answer:
$102,000
Explanation:
Calculation for How much will Markley debit Work in Process in June
Using this formula
Debit Work in Process =Direct labor* Direct labor predetermined overhead rate percentage
Let plug in the formula
Debit Work in Process=$85,000 *120%
Debit Work in Process=$102,000
Therefore Markley debit Work in Process in June will be $102,000
Why does Canadian Pacific want to acquire Norfolk Southern? Do you believe there is a compelling economic rationale for the merger?
Answer:
Drawing inferences from the Case Study "CANADIAN PACIFIC (CP) BID'S FOR NORFOLK SOUTHERN (NS)"
It is explicitly stated in paragraph 3 that the CP believes that the merger would be beneficial to the rail transport industry as it would help meet growing demands in the sector.
Also, in the twelfth paragraph, CP states that the industry stakeholders are demanding a "strong, healthy and high performing rail system". He indicates that the merger would bring about the needed change.
According to the Justice Department, the proposal is structured in such a way that it limits the independence of NS. It also appears that CP is pushing too hard because at the time of these events, the Surface Trasportation Board was yet to complete its reveiw of the proposal.
It is safe therefore to say that CP wants to acquire NS to expand their market share. There is no affirmation in the casestudy from a thirdparty to CP about the potential benefits of the merger.
Therefoe there is no compelling economic rationale to the public for the proposed expansion.
Cheers
Answer:
jtlyn ns already owns cn
Explanation:
You are ordering new equipment for the boss. Machine 1 will save $5,000 per year for 6 years; Machine 2 will save $6,000 per year for 5 years. Assume an interest rate of 10% compounded annually. What is the future value of savings from Machine 1 and Machine 2 in Year 6? Which machine should you select?
Answer:
The answer is "$38,578, $40,294, choose Machine 2".
Explanation:
Machine 1
Yearly savings = $5,000
Time = 6 years
Rate of Interest = 10%
Calculating the Future value:
[tex]FV = \$ 5,000 ( \frac{F}{A}, i, n)\\\\[/tex]
[tex]= \$ 5,000 (\frac{F}{A}, 10 \%, 6)\\\\= \$ 5,000 \times 7.7156\\\\= \$ 38,578\\\\[/tex]
Machine 1 savings would have a potential value of $38,578
Machine two
Yearly savings = 6,000
Time = five years
Rate of interest = 10%;
At the end of 5 years compute Potential value:
[tex]FV = \$ 6,000 (\frac{F}{A}, i, n) \\\\[/tex]
[tex]= \$ 6,000(\frac{F}{A}, 10 \%, 5)\\\\= \$ 6,000 \times 6.1051\\\\= \$ 36,630.6\\\\[/tex]
At the end of 5 years the potential value is $36,630.6.
The future value in Year 6 calculate-
[tex]FV = \$ 36,630.6 (\frac{F}{P}, i, n)\\\\[/tex]
[tex]= \$ 36,630.6 (\frac{F}{P}, 10 \%, 1)\\\\= \$ 36,630.6 \times 1.100 \\\\= \$ 40,293.66 \ \ or \ \ \$ 40,294\\\\[/tex]
Machine 2 saving will be worth $40,294 in future
Machine 2 's potential saving value is higher.
Thus, You can pick Machine 2.
llieis evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $11,500; year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, $0; and year 7, $12,500. Elliebelieves that she should earn an annual rate of 8percent on this investment. How much should Elliepay for this investment
Answer:
Ans 1 : 76 percent
Ans 2 : the eliepay must be all the numbers HCF for the investment = 340
Explanation:
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Use Present Worth Analysis to determine whether Alternative A or B should be chosen. Items are identically replaced at the end of their useful lives. Assume an interest rate of 20% per year, compounded annually. Alternative A Alternative B Initial Cost 250 575 Annual Benefit 90 158 Salvage Value 100 140 Useful Life (yrs) 2 3
Answer:
Alternative A should be selected since its equivalent annual cost is much lower than alternative B's
Explanation:
we first must to determine the NPV of both projects and then the equivalent annual cost:
Project A
initial outlay -250
NCF year 1 = 90
NCF year 2 = 90 + 100 = 190
NPV = -43.06
equivalent annual cost = -43.06/PV annuity factor = -43.06/1.5278 = -28.18
Project B
initial outlay -575
NCF year 1 = 158
NCF year 2 = 158
NCF year 3 = 158 +140 = 298
NPV = -161.16
equivalent annual cost = -161.16/PV annuity factor = -161.16/2.1065 = -76.51
Braxton's Cleaning Company stock is selling for $35.50 per share based on a required return of 11.2 percent. What is the the next annual dividend if the growth rate in dividends is expected to be 3.6 percent indefinitely?
Answer:
The next annual dividend is $2.70
Explanation:
The computation of the next annual dividend is shown below:
= Selling price of a stock × ( Expected rate of return - growth rate)
= $35.50 per share × (11.2% - 3.6%)
= $35.50 per share × 7.6%
= $2.70
Hence, the next annual dividend is $2.70
We simply applied the above formula
And, the same is to be considered
A company purchased inventory as follows: 150 units at $10 350 units at $12 The average unit cost for inventory is
Answer:
the average cost for inventory is $11.40
Explanation:
The computation of the average units for cost is shown below:
= Total purchase ÷ total purchase units
= (150 units × $10 + 350 units × $12) ÷ (150 units + 350 units)
= ($1,500 + $4,200) ÷ (500 units)
= ($5,700) ÷ (500 units)
= $11.40
Hence, the average cost for inventory is $11.40
We simply applied the above formula and the same is to be considered