Answer:
Schedule Variance is - $223,500
Cost Variance = - $38,500
Explanation:
Difference between the two values are variance it could be positive and negative variance.
As per gicen data
Planned Value = PV = $735,000
Actual Cost = AC = $550,000
Completion ratio = Days spent / Total days = 65 / ( 65 + 5 ) = 0.93
Earned value = EV = Actual cost x completion ratio = $550,000 x 0.93 = $511,500
Schedule Variance (SV) = EV–PV = $511,500 - $735,000 = - $223,500
Cost Variance (CV) = EV–AC = $511,500 - 550,000 = - $38,500
Final answer:
The question seeks to estimate Schedule Variance and Cost Variance in a project management context. While we cannot calculate the Schedule Variance due to lack of information on Earned Value, we see that the Actual Cost is $185,000 less than the Planned Cost, indicating a potential Cost Variance.
Explanation:
In project management, the performance of a project is often measured using variances, which compare planned performance with actual performance. Specifically, Schedule Variance (SV) and Cost Variance (CV) are two of the most common variances calculated.
The Schedule Variance (SV) is the difference between the work planned and the work actually accomplished. To calculate SV, we use the formula SV = EV - PV, where EV is the Earned Value and PV is the Planned Value. However, since we don't have the Earned Value provided in the question, we cannot calculate SV in this case.
The Cost Variance (CV) is the difference between the budgeted cost of work performed and the actual cost of work performed. To calculate CV, we use the formula CV = EV - AC, where AC is the Actual Cost. Again, without the Earned Value, we cannot give a precise number for the Cost Variance in this instance. Therefore, we can comment that the project has spent less than planned by $735,000 - $550,000 = $185,000 but without the context of work accomplished (EV), we cannot ascertain if this is favorable or unfavorable.
The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:____________
Answer:
Fishbone diagram
Explanation:
The fishbone diagram, also known as Ishikawa diagram or the cause and effect diagram is a visualization tool used for grouping the likely causes of a problem to know its root causes. A fishbone diagram blends brainstorming with a mind map template.
A fishbone diagram is used for troubleshooting and product development. After all the likely causes of a problem has been brainstormed by the group, the facilitator rates the possible causes in accordance to their importance. The diagram's design resembles a fish skeleton. Fishbone diagrams are usually made at team meetings.
Answer: Cause and Effect Diagram/Fishbone Diagram
Explanation: The Cause and Effect /Fishbone Diagram is so named because of its similarity to the skeleton of a fish. It is used to visulaize the causes of a quality problem and the interactions between them.
When the possible causes are categorized into manpower, methods, material and machines, it is a 4M Cause and Effect Diagram. This is useful in a manufacturing environment where any of these factors can be the cause of a quality problem. These categories are further divided into subcategories and help identify the cause of quality issues.
Use the following information to determine this company's cash flows from financing activities.a. Net income was $466,000. b. Issued common stock for $79,000 cash. c. Paid cash dividend of $13,000. Paid $125,000 cash to settle a note payable at its $125,000 maturity value. d. Paid $115,000 cash to acquire its treasury stock. e. Purchased equipment for $87,000 cash.
Answer:
The answer is ($174,000)
Explanation:
Cash flows from financing activities show the inflow and outflow of cash that are used to fund the business's operations.
Cash flow from financing activities:
Issuance of common stock......................................$79,000
Payment of dividend........($13,000)
Settlement of notes payable.................................($125,000)
Payment for treasury stock.........…...........................................($115,000)
Net cash from financing activities...............................($174,000)
In the social class model developed by Gilbert and Kahl, members of the __________ have earned most of their money during their own lifetime. This class includes entrepreneurs, presidents of major corporations, sports or entertainment celebrities, and top-level professionals.
Answer: Lower -Upper Class
Explanation:
The lower‐upper class are those who acquired money from investments or business. They are also professionals who went to the highest level of school and by perseverance and hard work are living good lives.. They clude entrepreneurs, presidents of major corporations, sports entertainment celebrities, and top-level professionals also are doctors, accountants, engineers, lawyers.
They are part of the Upper class system who have money that they can spend although they are lower than the Upper-Upper Class who were born into extreme wealth. These people live in great neighborhoods, mingle with like minds and send their children to the finest schools.
Best Buy Part B) At a Best Buy store, the forecast for the annual demand of a Motorola cell phone is 15600. Demand forecasts are updated weekly and the unit time is one week. Motorola takes 2 weeks to supply an order and the setup cost is $400 per order. The holding cost rate is 10% and one cell phone costs $50. The store manager now finds that the weekly demand is highly random and normally distributed with a mean of 300 and a standard deviation of 200. Best Buy is targeting a service level of 97.73%. (Best Buy Part B) (a) What is the cycle inventory (or half of order quantity)? [Answer format: integer] (b) What is the average inventory (or inventory held on average between orders)? [Answer format: integer] Write your answer(s) as 123, 4567
Answer:600
Explanation:
Answer:
Calculation of economic order quantity (EOQ):
The formula to calculate economic order quantity is,
EOQ = [tex]\sqrt{\frac{2DC_{S} }{C_{H} } }[/tex]
Where,
D is the annual demand
Cs is the setup cost
CH is the holding cost
Substitute $15,600 for D, $400 for Cs and $5 for CH in the above formula.
EOQ = [tex]\sqrt{\frac{2 * 15600 * 400}{5} }[/tex]
EOQ = $1580
Hence, the economic order quantity is 1,580.
(a). Calculation of total setup cost:
The formula to calculate total setup cost is,
Total setup cost = (D/EOQ) x [tex]C_{S}[/tex]
Substitute 15600 for D, $400 for [tex]C_{S}[/tex] and 1580 for EOQ in the above formula
Total setup cost = (15600/1580) x $400
Total setup cost = $3,949.36
Hence, the total setup cost is $3,949.36
(b). Calculation of total holding cost:
The formula to calculate total holding cost is,
Total holding cost = (D/2) x [tex]C_{H}[/tex]
Substitute 15600 for D and $5 for [tex]C_{H}[/tex] in the above formula
Total holding cost = (15,600/2) x 5
Total holding cost = $3,900
Hence, total holding cost is $3,900
(c). Calculation of total cost:
The formula to calculate total cost is,
Total cost = D x C + [tex]C_{TS}[/tex] + [tex]C_{TH}[/tex]
Where,
D is the annual demand
C is the cost
[tex]C_{TS}[/tex] is the total setup cost
[tex]C_{TH}[/tex] is the total holding cost
Substitute 15600 for D, $50 for C, 3949.37 for [tex]C_{TS}[/tex] and $3,950 for [tex]C_{TH}[/tex] the above formula,
Total cost = (15,600 x $50) + $3,949.37 + $3,950
Total cost = $787,899.37
Hence, total cost of order is $787,899.37
Western Markets has 150,000 shares outstanding with a market price per share of $15. Each share is entitled to one right. If the firm sets a rights offer as 5 rights plus $10 for each new share, what will be the ex-rights price per share
Answer: $8.50
Explanation:
Price Outstanding Value
Total Shares 15 150,000.00 $2,250,000.00
Right Price 2 150,000.00 $300,000.00
Total Shares and Value 300,000.00 $2,550,000.00
Ex rights Price = $2,550,000/300,000 = $8.5
Final answer:
The ex-rights price per share is calculated by adding the funds raised from the rights offering to the market value of the company before the offering and then dividing by the new total number of shares. In this case, the ex-rights price per share is approximately $14.17.
Explanation:
The student's question involves calculating the ex-rights price per share after a rights offering by Western Markets. The company currently has 150,000 shares outstanding priced at $15 per share, and the rights offering allows for the purchase of new shares at a discounted price, with 5 rights and an additional $10 payment required for each new share.
To calculate the ex-rights price, we must first determine the number of new shares that will be issued. Since 5 rights are needed for one new share, and there are 150,000 shares outstanding, this results in 30,000 new shares (150,000/5). The total funds raised from the rights offering will be $300,000 (30,000 shares x $10).
The total value of the company after the rights offering will be the sum of the market value before the offering ($2,250,000 which is 150,000 shares x $15) and the funds raised from the offering ($300,000), resulting in $2,550,000. We then divide this total by the new number of shares outstanding (180,000 shares, which is the original 150,000 plus the 30,000 new shares) to get the ex-rights price per share.
Ex-rights price per share = Total value / New total number of shares = $2,550,000 / 180,000 = $14.17 approximately.
A 3-year annual coupon bond has coupons of $12 per year starting one year from now and matures in 3 years for the amount $100. The yield to maturity is 11.8% (annual effective). Find the Macaulay duration of the bond.
Answer: Macaulay Duration = 2.6908154485 = 2.69
Explanation:
Macaulay Duration = Sum of Cash flows Present Value/ current bond price
Cash flows: year 1 = $12
Cash flows: year 2 = 12
Cash flows: year 3 = 100 + 12 = 112
Sum of Cash Flow PV = (1×12÷ (1.118)^1) + (2×12÷ (1.118)^2) +(3×112÷(1.118)^3)
Sum of Cash Flow PV = 270.37857712
Current Bond Price or Value = Face Value/ (1+r)^n + PV of Annuity
Current Bond Price or Value = 1000/ (1.118)^3 + (30×(1 - (1+0.118)^-3)/0.118
Current Bond Price or Value = 100.48202201
Macaulay Duration = 270.37857712 ÷ 100.48202201
Macaulay Duration = 2.6908154485 = 2.69
The Macaulay duration of a bond is a measure of its price sensitivity to changes in yield. It can be calculated by finding the present value of each cash flow, multiplying it by the respective time until that cash flow is received, and then dividing the sum by the current bond price.
Explanation:The Macaulay duration of a bond is a measure of its price sensitivity to changes in yield. It represents the weighted average time to receive the cash flows from the bond. To calculate the Macaulay duration, we need to find the present value of each cash flow and then multiply it by the respective time until that cash flow is received. Finally, we divide the sum of these values by the current bond price.
Calculate the present value of each cash flow using the yield to maturity.Multiply each present value by the time until the cash flow is received.Sum up these values.Divide the sum by the current bond price.In this case, the cash flows from the bond are the annual coupon payments and the final maturity amount. The time until each cash flow is received is the number of years from the present. The current bond price can be calculated by discounting the cash flows at the yield to maturity.
During its most recent fiscal year, Raphael Enterprises sold 250,000 electric screwdrivers at a price of $16.50 each. Fixed costs amounted to $625,000 and pretax income was $875,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?
Answer:
$2,625,000 is reported as variable cost.
Explanation:
As we know pretax income is calculated by deducting variable and fixed cost from thr revenue / slaes.
Pretax Income = Contribution Margin - Fixed cost
Contribution Margin = Pretax Income + Fixed cost
Contribution Margin = $875,000 + $625,000
Contribution Margin = $1,500,000
Contribution Margin = Revenue - variable cost
$1,500,000 = ( 250,000 x 16.50 ) - variable cost
$1,500,000 = $4,125,000 - Variable cost
Variable cost = $4,125,000 - $1,500,000
Variable cost = $2,625,000
Amy Parker, a 22-year-old and newly hired marine biologist, is quick to admit that she does not plan to keep close tabs on how her 401(k) retirement plan will grow with time. This sort of thing does not really interest her. Amy's contribution, plus that of her employer, amounts to $2 comma 150 per year starting at age 23. Amy expects this amount to increase by 3% each year until she retires at the age of 57 (there will be 35 EOY payments). What is the compounded future value of Amy's 401(k) plan if it earns 5% per year?
Answer:
Final Value= $370,481.13
Explanation:
Giving the following information:
Amy's contribution, plus that of her employer, amounts to $2,150 per year starting at age 23. Amy expects this amount to increase by 3% each year until she retires at the age of 57 (there will be 35 EOY payments). Interest rate= 5%.
First, we will add the growth of the deposits to the interest rate:
Interest rate= 0.03 + 0.05= 0.08
Now, to calculate the final value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit= 2,150
i= 0.08
n= 35
FV= {2,150*[(1.08^35)-1]}/ 0.08= $370,481.13
You have decided to enter the candy business. You are considering producing two types of candies: Slugger candy and Easy Out candy, both of which consist solely of sugar, nuts, and chocolate. At present you have in stock 10,000 ounces of sugar, 3,000 ounces of nuts, and 3,000 ounces of chocolate. The mixture used to make Easy Out candy must contain at least 20% nuts. The mixture used to make Slugger candy must contain at least 10% nuts and 10% chocolate. Each ounce of East Out can be sold for $0.60 and each ounce of Slugger for $0.40.
What is the maximum revenue you can earn?
To maximize revenue, make 15,000 ounces of Easy Out candies and 30,000 ounces of Slugger candies, for a total revenue of $21,000.
Explanation:To maximize revenue, you need to find the combination of Slugger and Easy Out candies that uses all the available ingredients and yields the highest total revenue. Let's calculate the maximum revenue step by step:
First, calculate the maximum quantity of Easy Out candies that can be made using the available nuts: 3,000 ounces x 100% / 20% = 15,000 ounces. This is the maximum quantity of Easy Out candies you can make.Next, calculate the maximum quantity of Slugger candies that can be made using the available nuts and chocolate: 3,000 ounces (nuts) x 100% / 10% = 30,000 ounces, and 3,000 ounces (chocolate) x 100% / 10% = 30,000 ounces. Since nuts and chocolate are limited by the same quantity, the maximum quantity of Slugger candies is limited by the 30,000 ounces of chocolate.Calculate the revenue for each type of candy and sum them up: Revenue from Easy Out candies = 15,000 ounces x $0.60/ounce = $9,000, and revenue from Slugger candies = 30,000 ounces x $0.40/ounce = $12,000. So the maximum revenue you can earn is $9,000 + $12,000 = $21,000.Learn more about maximizing revenue here:https://brainly.com/question/33891229
#SPJ3
Millcorp sells wetsuits for deep sea divers. It recently engineered a new material for its wetsuits to better hold in the wearer’s body heat. After a close encounter with a shark, a customer discovers that the new material protects against shark bites. Soon after, Millcorp’s sales explode and it achieves 90% market share in diver wetsuits. Which of the following best describes this situation?a)Millcorp has a lawful natural monopolyb)Millcorp has a lawful innocent acquisition of a monopoly.c)Millcorp does not have a monopoly.d)Millcorp can likely be found guilty of pursuing monopoly power.
Answer:
B) Millcorp has a lawful innocent acquisition of a monopoly.
Answer:
B) Millcorp has a lawful innocent acquisition of a monopoly.
Explanation:
Millcorp has a lawful innocent acquisition of Monopoly because Millcorp isn't aware that the newly acquired material for wet suit protect against shark bite. The motive if acquiring the material was to better hold in the wearer's body heat.
The innocent acquisition of the material and the new discovery has increased the demand for Millcorp product which will increase its profits
Monopoly:This a market structure in which a seller sells a unique product.
The product sold by the seller cannot be easily substituted.
The Monopoly is characterised by
1) Single seller and many buyers
2) Absence of competition
3) No close substitute
Suppose that a 5-year Treasury bond pays an annual rate of return of 1.3%, and a 5-year bond of the fictional company Risky Investment Inc. pays an annual rate of return of 7.1%. The risk premium on the Risky Investment bond is __________ percentage points.
Consider a decrease in the annual rate of return on the Risky Investment bond from 7.1 percent to 5.5 percent. Such a change would _________ the interest rate spread on the Risky Investment bond over Treasuries to ___________ .
Which of the following explains the decrease in the annual rate of return on the Risky Investment bond?
1. The expected default rate on the Risky Investment bond has decreased.
2. The expected default rate on the Treasury bond has increased.
3. The expected default rate on the Treasury bond has decreased.
4. The expected default rate on the Risky Investment bond has increased.
Answer:
a. The risk premium on Risky Investment bond = 5.8
b. Such a change would decrease/reduce 4.2%
c. The expected default rate on the Risky Investment bond has decreased (1).
Explanation:
a. The risk premium on a risky investment is equal to the total return on a risky investment less the return on the risk free asset. The risky asset here gives an annual return of 7.1% while the risk free rate is 1.3%. So, the risk premium on the risky asset for additional risk is,
7.1 - 1.3 = 5.8%b. A reduction in the annual return on the risky asset will decrease/reduce the interest rate spread which is equal to the difference between the return of the risky and risk free asset. The new spread will be equal to,
5.5 - 1.3 = 4.2%c. The risk free rate is expected to be the same as no information is provided. Besides, a fall in annual rate of risky investment means that there is a reduction in the riskiness of such an investment and that would mean that there is a reduction in the default risk in turn leading to a reduction in compensation for default and the default rate.
The risk is made up of risk free + maturity risk + liquidity risk and default risk.
The risk premium on the Risky Investment bond is initially 5.8 percentage points. A decrease in its rate of return from 7.1% to 5.5% narrows the interest rate spread over Treasuries to 4.2 percentage points, likely due to a decrease in the expected default rate of Risky Investment Inc that is option A.
The risk premium on the Risky Investment bond is calculated by subtracting the Treasury bond's rate of return from the Risky Investment bond's rate of return. So the risk premium would be 7.1% - 1.3% = 5.8 percentage points.
When the annual rate of return on the Risky Investment bond decreases from 7.1% to 5.5%, this would narrow the interest rate spread on the Risky Investment bond over Treasuries to 5.5% - 1.3% = 4.2 percentage points.
The decrease in the annual rate of return on the Risky Investment bond could potentially be explained by option 1, which states that the expected default rate on the Risky Investment bond has decreased. This implies that the bond is seen as less risky than before, which can justify a lower rate of return required by investors.
Clarion Corp. invested cash in a 6-month certificate of deposit (CD) on November 1, 2015. If Clarion Corp. has an accounting period that ends on December 31, 2015, when should Clarion recognize interest revenue from the CD?
a. On December 31, 2015 only
b. On May 1, 2016 only
c. Both December 31, 2015 and May 31, 2016
d. On the date when its income tax return is filed
Answer:
A is the correct option
Explanation:
Revenue or income is recognized based on accrual concept of accounting where revenue or income is recognized when earned and expenses when incurred not when received or paid in cash.
As a result,on the 31st December Clarion Corp. has earned two months' interest on the 6-month certificate of deposit as it has invested for two months.
The correct option is A,Clarion recognizes interest revenue on 31st December ,2015 only.
It is also important to note that the since 2015 came to end the fraction of interest revenue relating to year 2015 needs to be recognized by debiting accrued income account and crediting investment on the face of the income statement
Final answer:
Clarion Corp. should recognize interest revenue from the CD both on December 31, 2015, and May 31, 2016, in line with accrual accounting principles, which dictate revenue should be recognized when it is earned.
Explanation:
The question asks, "When should Clarion Corp. recognize interest revenue from a 6-month certificate of deposit (CD) that was invested in on November 1, 2015, given their accounting period ends on December 31, 2015?
According to accrual accounting principles, revenue should be recognized when it is earned regardless of when the cash is received. In this scenario, Clarion Corp. earns interest over the duration of the CD, even though the interest might not be paid until the CD matures. Therefore, the interest revenue that Clarion Corp. earns by the end of its accounting period on December 31, 2015, should be recognized in their financial statements at that time, with the remaining interest revenue to be recognized when it is fully earned by the end of the CD term.
The correct answer is c. Both December 31, 2015 and May 31, 2016. This is because interest revenue is earned over the length of the CD, not just when the CD matures or the interest is paid. Clarion Corp. should recognize the portion of interest earned up to December 31, 2015, in the 2015 fiscal year, and the remainder upon the CD's maturity on May 1, 2016, in the following fiscal period.
Inventory records for Marvin Company revealed the following:
Date Transaction Number of Units Unit Cost
Mar. 1 Beginning inventory 1,090 $ 7.25
Mar. 10 Purchase 510 7.75
Mar. 16 Purchase 397 8.35
Mar. 23 Purchase 510 9.05
Marvin sold 1,880 units of inventory during the month. Ending inventory assuming FIFO would be ____________.
Answer:
Ending inventory= $5,592.45
Explanation:
Giving the following information:
Mar. 1: Beginning inventory= 1,090 units at $7.25
Mar. 10: Purchase: 510 units at $7.75
Mar. 16: Purchase: 397 units at $8.35
Mar. 23: Purchase: 510 units at $9.05
First, we need to calculate the number of units in ending inventory:
Ending inventory in units= total units - units sold
Ending inventory in units= 2,507 - 1,880= 627
Under FIFO (first-in, first-out), the ending inventory is composed of the cost of the last units bought.
Ending inventory= 510*9.05 + 117*8.35= $5,592.45
Which of the following revelations from a different research studies came to be known as the Hawthorne effect? a. Group members subjecting those workers who violate the group norms to sanctions. b. Productivity increasing regardless of the level of illumination in the workplace. c. Workers concealing the true potential efficiency of a work system to protect their interests. d. Workers productivity being affected more by the attention received from researchers than by the work setting. e. Employees in a ""no-talking"" workplace developing ways of talking to one another out the sides of their mouths.
Answer:
D) Workers productivity being affected more by the attention received from researchers than by the work setting.
Explanation:
The Hawthorne effect is also known as the observer effect. It is a change or modification in an aspect of an individual's behaviour in response to his or her awareness of being observed. One of the revelations that can be known as the Hawthorne effect is workers productivity being affected more by the attention received from researchers than by the work setting.
Alcove Studio is a designer boutique that sells the most recent collections from top designers. Since it sells exclusive clothing, customers from all over the world are willing to pay exorbitant prices, and place orders months in advance. Alcove Studio's goods are examples of _____.
A.specialty goods
B.organizational goods
C.impulse goods
D.convenience goods
Answer:
A.specialty goods
Explanation:
A specialty good is an Item that is unique and it makes people take extra efforts to acquire them.
convenience goods require little or no efforts to buy them.
Impulse goods are goods people buy on impulse.
I hope my answer helps you
Alcove Studio offers specialty goods, which are unique items that consumers are willing to make a special effort to purchase, including luxury and Veblen goods with high exclusivity and demand by fashion-conscious customers. Option A is correct.
Alcove Studio's goods are examples of specialty goods. Specialty goods are items that have unique characteristics and brand identity for which a significant group of buyers is willing to make a special purchase effort.
Given that Alcove Studio sells the most recent collections from top designers, its exclusive clothing likely fits into the category of luxury goods or Veblen goods, which are characterized by exclusivity and high demand among consumers who seek the latest in fashion and are willing to pay high prices for them.
Consumers of specialty goods, like those at Alcove Studio, are often seeking customer intimacy, valuing the specific features and benefits of the products over price and convenience. These goods are distinct from organizational goods, impulse goods, and convenience goods which are intended for different buying motives and situations.
Organizational goods are purchased by companies for further processing or for use in their operations, impulse goods are bought without prior planning, typically prompted by convenience and accessibility, and convenience goods are those customers buy regularly and with minimal effort.
Companies from the nation of Moldavia are more efficient in the production of certain types of apparel, while companies from the United States are more efficient in the production of certain types of computers. Which economic theory predicts that capital would move to Moldavia to be invested there in the apparel industry and to the United States to be invested in its computer companies?
Options:
a. Investor collectivism theory
b. Rapid specialization theory
c. Investor individualism doctrine
d. Free trade doctrine
Answer: C. Investor individualism doctrine
Explanation:
Investor individualism doctrine is a doctrine that tends to show that an investors will invest or put Capital in a country that produces the product of which they are best in. In this case capital will be investigated in Moldavia since it is efficient in apparel manufacturing and to the United States of America because it is efficient in the production of computer systems.
INVESTOR WILL GENERALLY INVEST CAPITAL ON THE ECONOMIC COMPETENCE (WHAT A COUNTRY IS EFFICIENT IN PRODUCING) OF A COUNTRY.
Final answer:
The Heckscher-Ohlin (H-O) theorem explains why capital would move to Moldavia for apparel production and to the U.S. for computer production, based on each country's comparative advantage and abundant production factors.
Explanation:
The economic theory that predicts capital would move to Moldavia to be invested in the apparel industry and to the United States to be invested in the computer industry is the Heckscher-Ohlin (H-O) theorem. This theory suggests that countries export products that are intensive in the country's relatively abundant factors of production and import products that are intensive in factors that are relatively scarce. Therefore, capital mobility directs investments to sectors where the marginal product of capital is highest, enhancing economic efficiency globally. For example, Moldavia, being more efficient in apparel production likely due to lower labor costs, would attract capital for that industry, whereas the U.S., being more efficient in computer production, would attract capital investments for the computer industry due to its capital abundance. This alignment with countries' comparative advantages ensures that capital is utilized where it can generate the most value.
You want to open a savings account. There are five banks located in your area. The rates paid by banks A through E, respectively, are given below. Which bank should you select if your goal is to maximize your interest income?
Complete question:
You have $5,600 that you want to use to open a savings account. There are five banks located in your area. The rates paid by banks A through E, respectively, are given below. Which bank should you select if your goal is to maximize your interest income?
A. 3.26 percent, compounded annually
B. 3.20 percent, compounded monthly
C. 3.25 percent, compounded semi-annually
D. 3.10 percent, compounded continuously (ignore this selection)
E. 3.15 percent, compounded quarterly
Answer:
3.25 percent, compounded semi-annually bank should select if the goal is to maximize your interest income
Explanation:
If value is accumulated annually, then n= 1; if semi-annually, then n= 2; quarterly, then n= 4; monthly, then n= 12; weekly, then n= 52; hourly, then n= 365; and so on, irrespective of the number of years concerned.
The widely used compounding method for bank savings accounts is quarterly, weekly or semi-annual; it is also hourly for money market accounts.
The time span for each account of the interest is one day and for half-year accounts it is six months. Regular blogs earn 1/365 a year, while half-year posts take place two times a year.
You need a 35-year, fixed-rate mortgage to buy a new home for $310,000. Your mortgage bank will lend you the money at an APR of 6.05 percent for this 420-month loan. However, you can afford monthly payments of only $1,500, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1,500?
Solution and explanation
Present value of the $1,500 monthly payments is
PMT $1,500
Annual Rate 6.05%
Number of period (NPER) 420
Present value Annuity (PVA) (calculated in excel using PV function) $261,528.41
[tex]\mathrm{PVA}=\$ 1,500\left[\left(1-\left\{1 /[1+(.0605 / 12)]^{\wedge} 420\right\}\right) /(.0605 / 12)\right][/tex] $261,528.41
Cost of Home $310,000
Amount of principal still owe = $310,000 - $261,528.41 $48,471.59
Balloon payment in 35 years, which is the FV of the remaining principal =
Present Value $48,471.59
Annual Rate 6.05%
Number of period (NPER) 420
Future Value (calculated in excel using FV function) $400,677.90
Balloon payment = [tex]\mathbf{S} 48,471.59[1+(.0605 / 12)] 420[/tex] $400,677.90
. January 1, 2002 you bought a coupon bond for $1102. You received a coupon of $50 on December 30 . On January 1, 2003, you sold the bond for $989. What was your total rate of return? Show your work.
Answer:
-5.72%
Explanation:
Total rate of return = (Total return/net loss ÷ Purchase Price) × 100 ......... (1)
Loss on sales = Purchase price - Sales price = $1102 - $989 = $113.
Net loss = Coupon received - loss on sales = $50 - $113 = -$63
Substituting the values into equation (1), we have:
Total rate of return = ((-63) ÷ 1,102) × 100 = -5.72%
Therefore, the total rate of return is -5.72%. It is negative because the coupon bond led into net loss.
Answer:
The rate of return is found to be -5.72%. The negative sign indicate that the bond resulted in a loss.
Explanation:
The total rate of return r is given as
[tex]r=\dfrac{Net \,Return/Loss}{Purchase\, Price}\times 100\%[/tex]
Here the value of the net return or loss is given as
[tex]Loss \,on\, sales = Purchase\, price - Sales \,price = \$1102 - \$989 = \$113.[/tex]
[tex]Net\, loss = Coupon\, received - loss\, on\, sales = \$50 - \$113 = -\$63[/tex]
So the rate of return is as
[tex]r=\dfrac{Net \,Return/Loss}{Purchase\, Price}\times 100\%\\r=\dfrac{63}{1102}\times 100\%\\r=-5.72\%[/tex]
As the rate of return is found to be 5.72%. The negative sign indicate that the bond resulted in a loss.
You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 20 percent in Stock S, and 35 percent in Stock T. The betas for these four stocks are 0.69, 1.76, 1.61, and 1.02, respectively. What is the portfolio beta
Answer:
The portfolio beta is 1.2
Explanation:
Portfolio Beta is the average bet of the all investments in portfolio. This beta is calculated on the basis of weightage of each investment in the portfolio.
Portfolio Beta = ( Beta of Stock Q x Weightage of Stock Q ) + ( Beta of Stock R x Weightage of Stock R ) + ( Beta of Stock S x Weightage of Stock S ) + ( Beta of Stock T x Weightage of Stock T )
Portfolio Beta = ( 0.69 x 25% ) + ( 1.76 x 20% ) + ( 1.61 x 20% ) + ( 1.02 x 35% )
Portfolio Beta = 0.1725 + 0.352 + 0.322 + 0.357 = 1.2035
The Organization of Petroleum Exporting Countries (OPEC) is made up of 12 developing countries. The countries that make up OPEC produce over 50% of the world's supply of crude oil. OPEC influences the world price of a barrel of crude oil by setting production quotas for each of its members. Discuss the problems inherent in setting and maintaining production quotas in a cartel like OPEC. How has changes in oil prices affected the economy of OPEC countries?
Answer:
As normal cartel there is a possibility of cheating by memeber countries. Member country may prefers to deviate from the quotas and produce more output. Another problem is that under reporting production level. This is a case of producing more output but showing that the output is under quotas. It causes shadow economy.
As the OPSEC countries supplies more than 50% of world demand. Hence it can be assumed that they have comparative advantage in crude oil production. Most of their economy depends on demand for oil. World prices can affect the economy of OPEC countries by influencing export demand and so as exchange rate. These are countries who has largets export earning from crude oil. Nation nal and growth of GDP depends on export demand.
Answer: As normal cartel there is a possibility of cheating by memeber countries. Member country may prefers to deviate from the quotas and produce more output. Another problem is that under reporting production level. This is a case of producing more output but showing that the output is under quotas. It causes shadow economy.
As the OPSEC countries supplies more than 50% of world demand. Hence it can be assumed that they have comparative advantage in crude oil production. Most of their economy depends on demand for oil. World prices can affect the economy of OPEC countries by influencing export demand and so as exchange rate. These are countries who has largets export earning from crude oil. Nation nal and growth of GDP depends on export demand.
Explanation:
Suppose you know a company's stock currently sells for $80 per share and the required return on the stock is 14 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Answer:
The current dividend is $5.23 per share
Explanation:
This return is divided equally between dividend yield and capital gains yield, in other words 7%each (14%/2)
Expected return=current dividend*(1+growth rate)/share price +growth rate
note the growth rate also represents capital gains yield
0.14=CD*(1+0.07)/80+0.07
0.14-0.07=CD*(1.07)/80
0.07*80=CD*1.07
5.6=CD*1.07
CD=5.6/1.07
CD=$5.23
Ultimately the current dividend is $5,23 per share a shown by solving the equation for current dividend above
Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $270, the probability of a fire is 0.1%, and in the event of a fire, the insured damages (the payout on the policy) will be $260,000.
a. Make a table of the two possible payouts on each policy with the probability of each.
b. Suppose you own the entire firm, and the company issues only one policy. What are the expected value, variance and standard deviation of your profit?
c. Now suppose your company issues two policies. The risk of fire is independent across the two policies. Make a table of the three possible payouts along with their associated probabilities. (Round your "Probability" answers to 4 decimal places.)
d. What are the expected value, variance and standard deviation of your profit?
e. Compare your answers to (b) and (d). Did risk pooling increase or decrease the variance of your profit?
f. Continue to assume the company has issued two policies, but now assume you take on a partner, so that you each own one-half of the firm. Make a table of your share of the possible payouts the company may have to make on the two policies, along with their associated probabilities. (Round your "Probability" answers to 4 decimal places.)
g. What are the expected value and variance of your profit?
The question involves calculating the expected value, variance, and standard deviation for different scenarios for an insurance company. It covers the situation of having one policy, two policies, and having a partner. The calculations involve probability and statistics to determine the possible outcome for the insurance company.
Explanation:To answer these questions, it's important to understand the concepts of expected value, variance, and standard deviation, which all are foundational concepts in probability and statistics. The expected value (or mean) of a random variable is a measure of the center of the distribution of the variable. Variance tells you the degree of spread in your data set. The standard deviation is a measure of how spread out numbers in the data set are.
Let's first solve part a and b. We can start this by creating a table of possible outcomes and their probabilities. We find that the profit would be either $270 (premium is collected, no fire) or -$259,730 (fire occurs, payout happens)
With the probability of a fire being 0.1%, we can then calculate the expected value, variance, and standard deviation of the profit. The expected value is a weighted average of the possible outcomes, with the weights being the probabilities of the outcomes. The variance is a measure of the dispersion of the profit amounts around their expected value, and the standard deviation is the square root of the variance.
For part c and d
If the company issues two policies, the possible outcomes would be Both fires ($270*2 - $260,000*2), One fire ($270*2 - $260,000), No fire ($270*2). We just again calculate the probabilities and find out the expected value, variance and standard deviation.
Finally, with risk pooling and partnership you have different outcomes depending on whether 0, 1, or 2 fires occur and if the profits are shared between partners. The calculations are similar to the ones before.
Learn more about Insurance Profit Calculations here:https://brainly.com/question/34553655
#SPJ3
a. Insurance make a table of the two possible payouts on each policy with the probability of each. b. Calculate the expected value, variance, and standard deviation of your profit. c. Make a table of the three possible payouts along with their associated probabilities.
a. Table of Payouts and Probabilities
PayoutProbability$099.9%$260,0000.1%
b. Expected Value, Variance, and Standard Deviation
To calculate the expected value, we multiply each payout by its corresponding probability and sum the results. In this case, the expected value is $260,000 x 0.001 + $0 x 0.999 = $260.
The variance is calculated by subtracting the expected value from each payout, squaring the result, multiplying it by its corresponding probability, and summing the results. The variance for this scenario is ($0 - $260)^2 x 0.999 + ($260,000 - $260)^2 x 0.001 = $67,400.
The standard deviation is the square root of the variance, which in this case is approximately $259.90.
c. Table of Payouts and Probabilities (Two Policies)
PayoutProbability$099.9% x 99.9% = 99.8001%$260,0000.1% x 99.9% + 99.9% x 0.1% = 0.1998%$520,0000.1% x 0.1% = 0.0001%
For similar questions on Insurance:
https://brainly.com/question/33116677
#SPJ3
The pilots of various U.S. airlines are threatening to strike unless they receive wage increases. The pilots belong to a union. Which of the following would most likely negotiate an agreement with airline management?
Answer: The question did not include the options. The answer is Union Representatives
Explanation: The Question with the options should be:
The pilots of various U.S. airlines are threatening to strike unless they receive wage increases. The pilots belong to a union. Which of the following would most likely negotiate an agreement with airline management?
A) union representatives
B) employee supervisors
C) government agencies
D) individual employees
The right answer is A ---- Union representatives
This is because Since the pilots belong to a union then Negotiation with management would be with the Union Representatives rather than individual pilots where the Union would present the concerns of the pilots to the management so as to resolve issues.
Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 5%, and IR 3.0%. A stock with a beta of 2.6 on IP and 1.9 on IR currently is expected to provide a rate of return of 13%. If industrial production actually grows by 7%, while the inflation rate turns out to be 6.0%, what is your revised estimate of the expected rate of return on the stock?
Answer: %23.9
Explanation:
The greatest amount of foreign exchange trading takes place in the following three cities:
A) New York, London, and Tokyo.
B) New York, Singapore, and Zurich.
C) London, Frankfurt, and Paris.
D) London, Tokyo, and Zurich.
Answer:
The correct answer is letter "A": New York, London, and Tokyo.
Explanation:
New York City is still considered the world center for foreign exchange (forex) trading only followed by London and Tokyo. The main currencies being traded are the U.S. dollar (USD), Euro (EUR) and the Japanese yen (JPY). Some analysts believe soon the Chinese renminbi (CNY) will take an important place among the previously mentioned three currencies.
As an investor you have a required rate of return of 12 percent for investments in risky stocks. You have analyzed three risky firms and must decide which (if any) to purchase. Your information is Firm ABCCurrent dividends $1.00 $3.00 $7.50Expected annual growth rate in dividends 7% 2% (-1%)Current market price $23 $33 $60aWhat is your valuation of each stock using the dividend-growth model?
Using the dividend-growth model, Firm A is valued at $20, Firm B at $30, and Firm C at $57.69. You can compare these valuations to their market prices to determine which stocks meet your investment criteria and required rate of return.
To value each stock using the dividend-growth model (also known as the Gordon growth model), we use the formula P = D / (k - g), where P is the price of the stock, D is the current dividend per share, k is the required rate of return, and g is the expected growth rate in dividends.
For Firm A with a current dividend of $1.00 and an expected growth rate of 7%, the valuation would be P = 1 / (0.12 - 0.07) = $20.
For Firm B with a current dividend of $3.00 and an expected growth rate of 2%, the valuation would be P = 3 / (0.12 - 0.02) = $30.
For Firm C with a current dividend of $7.50 and an expected growth rate of -1% (decline), the valuation would be P = 7.50 / (0.12 - (-0.01)) = $57.69.
By comparing these valuations with the current market prices, you can decide which stocks align with your investment criteria based on their expected return on investment and whether their market prices are overvalued or undervalued relative to your calculated price.
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit:
Manufacturing:
Direct materials $ 10
Direct labor $ 4
Variable manufacturing overhead $ 1
Variable selling and administrative $ 1
Fixed costs per year:
Fixed manufacturing overhead $ 231,000
Fixed selling and administrative $ 141,000
During the year, the company produced 21,000 units and sold 17,000 units. The selling price of the company’s product is $40 per unit. Assume that the company uses absorption costing. Compute the unit product cost.
Answer:
Unitary product cost= $26
Explanation:
Giving the following information:
Direct materials $ 10
Direct labor $ 4
Variable manufacturing overhead $ 1
Fixed costs per year:
Fixed manufacturing overhead $ 231,000
During the year, the company produced 21,000 units
Under the absorption costing method, the unit product coast is calculated using direct material, direct labor, and total unitary overhead.
First, we need to calculate the unitary fixed overhead:
Unitary fixed overhead= 231,000/21,000= $11
Now, we can calculate the unit product cost:
Unitary product cost= 10 + 4 + 1 + 11= $26
The unit product cost for the Lynch Company under absorption costing is $26. This is calculated by adding the variable costs per unit ($15) to the allocated fixed manufacturing overhead cost per unit ($11), which is derived from dividing the total fixed costs by the number of units produced.
Explanation:To compute the unit product cost under absorption costing, we need to consider both variable and fixed manufacturing costs. In Lynch Company's case, the variable costs per unit are as follows: direct materials $10, direct labor $4, and variable manufacturing overhead $1. The total variable manufacturing cost per unit then adds up to $15. Furthermore, the fixed manufacturing overhead costs are $231,000 per year.
Since we are using absorption costing, we allocate these fixed costs to the units produced, not the units sold. With 21,000 units produced, we divide the total fixed manufacturing overhead by the number of units. This calculation is $231,000 / 21,000 units, resulting in $11 per unit for fixed manufacturing overhead.
The sum of variable and fixed manufacturing costs per unit gives us the total unit product cost. So, $15 (variable) + $11 (fixed) equals $26 per unit. This $26 is the unit product cost under absorption costing for Lynch Company.
An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a positive externality.The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good.Shift one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should shift the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should shift the demand curve to reflect the social value of consuming the good.With this type of externality, in the absence of government intervention, the market equilibrium quantity produced will be (greater, less) than the socially optimal quantity.Which of the following generate the type of externality previously described? Check all that apply.1.The city where you live has turned the publicly owned land next to your house into a park, causing trash dropped by park visitors to pile up in your backyard.2.Your roommate, Valerie, has bought a puppy that barks all day while you are trying to study economics.3.Manuel has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.4. A leading electronics manufacturer has discovered a new technology that dramatically improves the picture quality of plasma televisions. Firms of all brands have free access to this technology.
Answer:
(A) It is a Positive externality if the effect on third parties is beneficial.
(B) With positive externality, the social interest exceeds private interest, hence the demand curve shifts as seen attached.
(C) In the absence of interference, the quantity of market equilibrium would be less than the quantity which is socially optimal.
(D) Examples follow:
Leading software corporation agrees to raise the budget for open-source development research. Nick planted numerous trees.A. It is a Positive externality and third parties are beneficial
B. The demand curve shifts as seen attached.
What is the Demand Curve?
(A) It is a Positive externality if the consequence on third parties is beneficial.
(B) With positive externality, When the social interest exceeds private interest, therefore, the demand curve shifts as seen attached.
(C) In the scarcity of interference, the quantity of market equilibrium would be less than the socially optimal quantity.
(D) Examples observe:
Leading software corporation decides to raise the budget for open-source development research. Then Nick planted numerous trees.
Find more information a bout Demand Curve here:
https://brainly.com/question/25910814
Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where: a. The market is composed of distinctly different buyer groups who have different needs or use the product in different ways. b. Most other rival firms are using a best-cost producer strategy. c. Buyers have strong bargaining power and entry barriers are low.
Answer:
c. Buyers have strong bargaining power and entry barriers are low.
Explanation:
In markets where buyers have stron bargaining power because options are abundant, and entry barriers are low (the reason why options are abundant), focused strategies that attempt at attracting customers with lower prices or product differentiation can be very important in maintaining a firm's market share, or improving it.
A lower cost can attract most types of customers because almost everyone is interested in saving as much as possible when they buy goods and services. However, product differentiation is another good strategy because if suppliers are many, people often need something special about the good to finally take the decision to purchase it.