In the year, 2005 Janice Quinn sells a five-year-old car to Used Car, Inc. for $3,000. In the same year, Used Car, Inc. resells the car to Ima Goner for $3,500. What is the contribution of this transaction to GDP in the year 2005

Answer:

5.22 minutes

Explanation:

Given that,

Average inventory turnover = 12 times per year

Setup Labor Cost (L) = $30 / hr

Annual Holding Cost (H) = $12 / Unit

Daily Production (P) = 976 Units / 8 Hour Day

Annual Demand (D) = 30,000 (250 days each × daily demand of 120 units)

Desired Lot Size (S) = 122 units (One Hour of Production)

Setup cost:

[tex]=\frac{H(S)^{2} }{2\times Annual\ demand} \times \frac{p-Daily\ demand}{p}[/tex]

[tex]=\frac{12(122)^{2} }{2\times 30,000} \times \frac{976-120}{976}[/tex]

= 2.61

Setup time:

[tex]=\frac{Setup\ cost}{Labour\ rate}[/tex]

[tex]=\frac{2.61}{30}[/tex]

= 0.087 hours or we can say that 5.22 minutes.

Therefore, To obtain the desired lot size, the set-up time that should be achieved = 5.22 minutes

Answer: The answers are explained below.

Explanation:

• Cost of debt: The cost of debt is the interest rate that a company is charged on its debts. It is the interest paid on bonds, loans etc. The cost of debt is usually the before-tax cost of a debt.

• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.

• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.

• Equity Beta: It measures the sensitivity of the stock price to changes in market. Equity Beta is also called levered beta.

• Asset beta: It is the beta of a firm without the effect of debt. It is a company's volatility of returns without its indebtedness.

• Pure play comparable: The pure play comparable is the taking of the beta estimate of another company that is comparable and in same line of business.

• Certainty equivalent: It is the guaranteed return that an individual would take now, rather than awaiting a higher but uncertain return later in the future.

Answer:

Explanation:

A. Cost of debt: This is the rate of a company pays on its debts, such as bonds and loans. Cost of debt is one part of a company's capital structure, with the other being the cost of equity.

B. Cost of equity : This is the return a company needs to decide if an Investment meets capital return requirements.

C. After tax WACC:This is the average after tax cost of a company's various capital sources, including common stocks, preferred stocks, bonds, and any other long term debt. In other words,WACC is the average rate of a company expect to pay to finance its assets.

D. Equity beta:This measures the volatility of the stock to the market that is, how sensitive is the stock price to a change in the overall market. Equity beta is also known as levered beta.

E. Assets beta: This is also known as unlevered beta, this is a beta of a company without the impact of debt. It is also known as the volatility of returns for a company.

F. Pure play comparable :This refers to companies that are in the single line of business. It is also used to find cost of capital for a project that is different from company's mainstream business.

G. Certainty equivalent :This is a guaranteed return that someone would accept now, rather than taking a chance on higher but uncertain, return in the future.

Answer:

0.7 and 0.3

Explanation:

Data provided in the question

Awarded bonus value = $3,0000

Spending amount on a new living room = $2,100

So by considering the above information , the MPC and MPS is

As we know that

MPC = change in Consumption spending ÷ change in income

        = $2,100 ÷ $3,000

        = 0.7

And, the

MPC + MPS = 1

0.7 + MPS = 1

So, the MPS is 0.3

Answer:

The correct answer is letter "D": product-by-value analysis.

Explanation:

The product-by-value analysis is a study that aims to increase the value of a product by understanding the costs of its components. The analysis implies listing the products a firm manufactures in descending order portraying those with more value first. In the study, costs are analyzed to find out if they can be reduced.

Answer:

systematic management approach

Explanation:

Systematic management is an approach to management that focuses on the management process rather than on the final outcome. The goals to this approach to management were: To create specific processes and procedures to be used in job task completion. To ensure that organizational operations were economical

Answer:

70.18

Explanation:

Labour force participation rate = [(employed + unemployed ) / working-age population ]

(150 + 50) / 285 = 0.7018 × 100 = 70.18%

I hope my answer helps you

Answer:

The Net cash provided by investing activities​ is $172,000.

Hence, the correct option is B. $ 172 comma 000.

Explanation:

Given:

In​ 2019, Forever​ Young, Inc. sold land for $ 110,000 ​cash, purchased equipment for $ 18,000 cash and issued bonds for $ 80,000 cash.

Now, to find the Net cash activities.

Land sold of cash = $110,000.

Equipment purchased of cash = $18,000.

Bonds issued of cash = $80,000.

Now, to get the Net cash activities we put formula:

Net cash activities = Land sold - Equipment purchased + Bonds issued

                               [tex]=110,000-18,000+80,000\\\\=110,000+62,000\\\\=172,000.[/tex]

Therefore, the Net cash provided by investing activities​ is $172,000.

Hence, the correct option is B. $ 172 comma 000.

Answer:

The amount of money we will have after the investment will be $ 4,800.

Explanation:

Simple interest is the system of calculation in which the interests generated by a capital are not capitalized, that is, when the interests are withdrawn separately and they do not accumulate in the capital that produced them. In other words, in the simple interest calculation the interest is not productive and it must always resort to the initial capital contributed.

Therefore, if the initial capital is $ 3,000 and the interest rate is 6% with a duration of 10 years, we must calculate this percentage and multiply it by 10 to obtain the sum of money that we will have at the end of the investment:

3,000 x 6/100 = 180

180 x 10 = 1,800

3,000 + 1,800 = 4,800

As we can see, the amount of money we will have after the investment will be $ 4,800.

Options:

A. monthly

B. quarterly

C. semi-annually

D. annually

Answer:B. Quarterly

Explanation:SEC(security and exchange commission) is an agency established by Government to regulate the activities of companies that sale Securities,Stock markets and self-regulatory Organisations.

Security and exchange commission ensures that it puts guidelines and rules to ensure that market players do business according to the best practices devoid of criminal activities.

Security and exchange commission rule 606 of regulation NMS, broker-dealers are required to give QUARTERLY REPORT AVAILABLE TO CUSTOMERS BY COMPILING STATISTICAL INFORMATION ON ROUTING OF CUSTOMER NON-DIRECTED ORDERS TO MARKET VENUES, AND MAKE THIS INFORMATION AVAILABLE TO CUSTOMERS.

Answer:

$1, 154.873

Explanation:

The appropriate formula is

P   = PV ×             r    

                    1 − (1+r)−n

P is the amount that needs to be set aside every year

Where PV  is $5000

r is 5% or 0.05

n is five years

P = 5000 x      0.05          

       1-(1+0.05)-5

P= 5000 x      0.05      

             1-0.783526166

P= 5000 x (0.05/0.216473834)

P = 5000 x 0.2309747976

P= 1, 154.873

Jeff needs to make annual sinking fund payments of about $904.84 to accumulate $5000 in 5 years at a 5% interest rate, when it is compounded annually using the ordinary annuity formula.

To find the sinking fund payment that Jeff would need to make at the end of each year to accumulate $5000 in 5 years at 5% interest compounded annually, we need to use the future value of an annuity formula. Since the payments are made at the end of each period (annually in this case) and not at the beginning, we will use the ordinary annuity formula.

The future value of an ordinary annuity formula is given by:

FV = Pmt * [(1 + r)^n - 1] / r

Where:

Plugging in the values, the formula becomes:

5000 = Pmt * [(1 + 0.05)^5 - 1] / 0.05

Now we just need to solve for Pmt:

5000 = Pmt * [1.276281563 - 1] / 0.05

5000 = Pmt * [0.276281563 / 0.05]

5000 = Pmt * 5.52563126

Pmt = 5000 / 5.52563126

Pmt ≈ $904.84

Therefore, Jeff should make annual payments of approximately $904.84 to reach his goal of $5000 in 5 years at a 5% interest rate, compounded annually.

Answer:

Margin of safety as a percentage of sales=0.25=25%

Option C is correct (25%)

Explanation:

Given Data:

Sale price per unit=$280

Current Sales=13,900 units

Break Even sales=10,425 units

Required:

Margin of safety as a percentage of sales=?

Solution:

Margin of safety in Dollars= Total Current Sales- Break even sales

Total Current sales=Sale price per unit*Current Sales

Total Current sales=$280*13,900

Total Current sales=$3,892,000

Break Even Sales=$280*10,425

Break Even Sales=$2,919,000

Margin of safety in Dollars= $3,892,000-$2,919,000

Margin of safety in Dollars= $973,000

Margin of safety as a percentage of sales=[tex]\frac{Margin\ of\ safety\ in\ Dollars}{Total\ current\ Sales}[/tex]

Margin of safety as a percentage of sales=[tex]\frac{\$973,000}{\$3,892,000}[/tex]

Margin of safety as a percentage of sales=0.25=25%

Option C is correct (25%)

Solution and explanation:

The Fair Labor Standards Act defines three tests that an employee must be eligible to be considered under the 'Exempt' category.

These include the following :

1.Salary Level Test : Employee must be paid minimum of $23,600 per year ($455 per week) to be considered Exempt.

2.Salary Basis Test : The representative must be paid on a Salary Basis, a fixed ensured least installment must be made for any workweek for the playing out any work. This would be dependent upon admissible and impermissible derivations that decide the premise of installment. Special cases to this standard are School educators, Lawyers, Doctors, and some others.

3.Duties Test : The actual jobs performed by the employee must be within the qualified exempt category of high level work. These are broadly classified as Executive, Professional; and Administrative job duties.  

Thus, following out of the above will be considered for the purpose of classification to Exempt employees category:

- Reimbursement of board, lodging, facilities availed

Whether these form part of the compensation structure and the gross payments fall within the ambit of Levels test.

- Compensation such as discretionary bonus

These to be considered as part of Salary and to check whether the payments fall within the above stated levels and also the Basis of these payments whether on continuing salary or otherwise.

-Duties

The actual duties performed to be checked whether these fall within the exempt category.

Thus, the above stated three tests must be cumulatively passed in order to be eligible to classified as 'Exempt' Employee.  

The U.S. Department of Labor guidelines help Ian Burns answer the employees' questions about changes in classification from nonexempt to exempt based on responsibilities, duties, and compensation.

The U.S. Department of Labor guidelines help Ian Burns answer the employees' questions about changes in classification from nonexempt to exempt based on several factors:

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Answer:

enterprise resource planning.

Explanation:

Enterprise resource planning involves management of main business processes and usually involves use of software. ERP supports similar processes based on the department it is deployed to.

For example ERP can be set up in a company to define various functions of human resources, accounting, amd operations.

The software used for each division will be tailored to their needs. Operations will be more towards everyday processes of production and customer service, while for human resources it will support more of data analysis for effective people management and performance related activities.

Answer:

Explanation:

Mike insurance company will pay = 0.9 of 400 = $ 360

Answer: Mike's insurance company will pay $360. That is, 90 percent of $400.

Explanation: The insurance company pays 90 percentage of the replacement cost of personal property damaged by fire. Although the actual amount Mike paid for the stove was $350 but now was worth $90 due to the fire incident. The insurable amount that was expected to have been communicated to the insurance company was the current market value and not the actual amount parted with, at first. This is because the insured would be at a loss in case of any eventuality.

So it was expected that Mike would have communicated $400 as the current market value to the insurance company to be the insurable amount.

The insurance company would take possession of the damaged stove which is now worth $90 and sell it to salvage buyer most likely at that price to cushion the loss that was incurred. Also, the company would pay $360 to Mike while he bears the remaining balance, which is $40.

Answer:

The investor will sale the bond as low as : 9,064.39 to achieve their 5.5% return on investment

Explanation:

To yield 5.5% then the purchase price of 9,500 should mathc the discounted value of the coupon payment and the selling price of the bonds:

[tex]9,500 = $PV of coupon payment + PV selling price[/tex]

PV o the coupon payment:

[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]

C 660.00

time 3

rate 0.055

[tex]660 \times \frac{1-(1+0.055)^{-3} }{0.055} = PV\\[/tex]

PV $1,780.6360

[tex]9,500 - 1,780.64 = \frac{Sales \: Price}{(1 + rate)^{time} }\\7,719.36(1 + 0.055)^{3} = $Selling Price[/tex]

Sales price: 9,064.39

Explanation:

Issue–Ray was intending to rob the money, but the bag also held a handgun. So, should Ray be found guilty of a major weapons robbery, even though the gun did not know?

Law—  The act of larceny includes wrongful taking and carrying away of personal property from someone else with the intention to rob the owner forever. The criminal offence is offences where the defendant has the motive to achieve a sort of economic benefit or harm. Property offenses Although robbery includes orphaning, no larceny.

Discussion – First, Ray's conduct is certainly a theft of property as it was his intention to snatch the bag from an unsupervised vehicle. The money was in the bag, so that Ray took away the precious property of another in an attempt to take out the owner.

Final answer:

Ray could potentially be convicted of grand theft of a firearm even without knowing the gun was in the purse, due to the principles of theft centered around the act of taking, not necessarily the knowledge of the contents, and strict liability offenses in some jurisdictions.

Explanation:

In criminal law, the concept of mens rea or 'guilty mind' plays a significant role in determining the culpability of an individual. For certain crimes, intent or knowledge is a necessary component to establish guilt. However, for the conviction of theft, the focus is primarily on the unauthorized taking of someone else's property with the intent to permanently deprive them of it, irrespective of the knowledge of the specific contents. Therefore, even without the knowledge of the gun's presence in the purse, Ray could still be held liable for its theft if the prosecution successfully proves he intended to steal the purse.

Moreover, the charge of grand theft of a firearm also implicates strict liability offenses in some jurisdictions, where knowledge or intent regarding the specific nature of the stolen item (in this case, the firearm) may not necessarily absolve the thief of criminal responsibility. The rationale behind this is to increase deterrence and hold individuals accountable for the unlawful possession of dangerous items, regardless of their intent or knowledge concerning those items at the time of the theft.

It's also worth noting that legal outcomes can vary significantly based on jurisdiction and the specific circumstances surrounding a case. Consulting legal statutes and precedents in the relevant jurisdiction would provide further clarity.

Explanation:

As we know that the inventory should be recorded at the lower cost or net realizable value whichever is lower

And, the same is shown on the attachment which is attached below:

The net realizable value for each products is computed by

= D - C - E

The DCE are the rows of the attached spreadsheet

And, the proper unit value for each products is as follows

Product        Lower of cost or NRV  

D                  92

E                   75

F                   73

G                  43

H                  61

I                    44

Answer:

Unitary variable cost= $42

Explanation:

Giving the following information:

Direct Materials $14

Indirect Materials (variable) $4

Direct Labor $8

Indirect Labor (variable) $6

Other Variable Factory Overhead $10

During the period, the company produced and sold 1,000 units.

Under the variable cost method, the product cost is calculated using direct material, direct labor, and variable overhead:

Unitary variable cost= 14 + 8 + (4 + 6 + 10)= $42

The inventory cost per unit using variable costing is calculated by adding only the variable costs, which in the case of Kawasaki Company, totals $42 per unit.

To determine the inventory cost per unit using variable costing, we need to focus on variable costs which include direct materials, direct labor, variable manufacturing overhead (both indirect materials and indirect labor), and other variable factory overhead.

The given costs are:

Adding up these costs gives us a total variable cost per unit:

$14 (Direct Materials) + $8 (Direct Labor) + $4 (Indirect Materials) + $6 (Indirect Labor) + $10 (Other Variable Factory Overhead) = $42 per unit

Fixed costs such as Fixed Factory Overhead and Fixed Selling Expenses are not included in the calculation for variable costing. Thus, the inventory cost per unit under variable costing for Kawasaki Company is $42.

Answer:

Explanation:

Computation of Cost of Goods Sold:    

Particular                                   Amount

Packaged (Cans & Bottles)      $127,361

Kegs                                          $69,856

Work In Progress Loss             $42,000

Contract Labor                         $9,000

Direct Labor                             $240,000

Freight                                      $18,000    

Cost of Goods Sold                 $506,217

Note: All of these are not included in Cost of good sold

Consumer Advertising   $30,000

Trade Promotion            $30,000

Sales Promotion            $18,000

Salaries & Benefits         $180,000

Answer:

-3.125%

Explanation:

The percentage change in the British pound is determined as the difference between the one-year forward rate ($1.55) and the current spot rate ($1.60), divided by the current spot rate, and then multiplied by 100%:

[tex]P = \frac{\$1.55-\$1.60}{\$1.60}*100\%\\ P=-3.125\%[/tex]

Over the next year, the British pound will change by -3.125%.

Answer:NO,The project manager should not give up any functionalities like technical requirements as it may lead to serious compromise that can cause serious hazard to the project or end users.

PART B

It is inappropriate at anytime to give up any Functionality(technical requirements) in order to meet schedule milestone.

Explanation:Technical requirements are standard procedures which has been established or put in place by experts or regulators as the best practices to ensure certain projects or Activities are effectively and efficiently done.

TECHNICAL REQUIREMENTS ARE NOT TO BE COMPROMISED IN ANY CIRCUMSTANCES AS IT IS A MAJOR CAUSE OF PROJECT FAILURES AND HAZARDS TO BOTH THE END USERS AND THE PROJECT TEAM MEMBERS.

Answer:

a. Contribution margin per passenger ($50-$20) = $30

b. Contribution margin ratio (30/50) = 60%

c. Operating Income  (390000-270000) = $120,000

d. Operating Profit = $42,000

Explanation:

a. Contribution formula = Sale - Variable Cost

Sale price per passenger = $50

Variable Cost per passenger = $20

Contribution margin per passenger ($50-$20)  = $30

b. Contribution Margin ratio formula = Contribution/Sale

Sales per passenger = 50

Contribution per passenger = 30

Contribution margin ratio (30/50) = 60%

c. Operating profit = Contribution margin- Fixed Cost

Monthly sale total for 13000 passenger

Sale per passenger = $50

Total sale for 13000 passenger 13000*50 = $650,000

Contribution Margin per passenger =$30

Total Contribution margin for 13000 passenger = 13000*30 =                                    $390,000

Less: Fixed Cost = 270,000

Operating Income  (390000-270000) = $120,000

d. Contribution margin formula= (Sale x Contribution margin ratio)

Contribution margin = (520000*60%) = $312,000

Less: Fixed Cost = 270,000

Operating Profit = $42,000

Answer:

A) $30

B) 0.6

C) $180,000

D) $102,000

Explanation:

Contribution per unit (in this case, passangers)

Sales revenue - Variable Cost

50 - 20 = 30

Contribution Ratio:

[tex]\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio[/tex]

[tex]\frac{30}{50} = Contribution \: Margin \: Ratio[/tex]

CMR = 0.60 for each dollar 60 cents are left to afford fixed cost and make a gain.

Operating profit with 13,000 passangers we multiply by the contribution per passanger and subtract the fixed cost

13,000 passangers x 30 contribution each - 210,000 fixed cost:

390,000 - 210,000 = 180,000

If sales are 520,000: we multiply this by the contribution margin ratio and subtract the fixed cost

520,000 x 0.60 CMR - 210,000 fixed cost

312,000 - 210,000 = 102,000

Answer:

11.419%

Explanation:

Given that,

Risk-free rate = 5.4

Market risk premium = 5

Portfolio = $1 million = $1,000,000

Amount invested in stock A = $218,000

Beta A = 0.5

Amount invested in stock B = $1,000,000 - $218,000

                                              = $782,000

Remainder invested in stock B that has a beta = 1.4

Portfolio beta:

= [(Amount in A × Beta of A) + (Amount in B × Beta of B)] ÷ Total Amount

= [($218,000 × 0.5) + ($782,000 × 1.4)] ÷ $1,000,000

= ($109,000 + $1,094,800) ÷ $1,000,000

= 1.2038

Required return:

= Risk free rate + (Beta × Market risk premium)

= 5.4% + (1.2038 × 5%)

= 5.4% + 6.019%

= 11.419%

Therefore, the required return on this portfolio is 11.419%

Answer:

A mix hedge reduces levels of expensive  FG inventory while slightly increasing component inventories.

A mix hedge is a planning technique which supports increased production flexibility

Explanation:

Hedging inventory implies a level of inventory that is kept to shield against unexpected event such as breakdown of machines,strikes,surge in demand for product or non-availability of raw materials due to disruption in supplier's business.

However, mix hedge is required to ensure the right of mix of inventories at every point in time so as to avoid investing more than required resources in inventory by keeping low volume  of expensive items of inventory and at the same time increasing the number of inventories kept overall,such that  risk associated with inventory can be shared by a number of items of inventory instead of a single line of inventory.

Answer:

The agency does not need to invite public opinion on the information it will post.

Explanation:

When a government wants to administers rules concerning clean housing projects wants to specify and explain the language it uses to communicate with the public and enforce its statutes, it does not need to invite public opinion on the information it will post.

The government will rather consult within itself to determine the best information that will effectively deliver the message of rules concerning clean housing projects.

Final answer:

The correct answer is 'b': The agency must hold a public comment period for the public to give feedback on the impact and details of the statute, according to the Administrative Procedure Act.

Explanation:

According to the Administrative Procedure Act, when a government agency is in the process of creating or amending regulations, it must follow a series of steps that involves input from the public and other stakeholders. After extensive research and data gathering, the agency is required to publish planning documents and advance notice of proposed rulemaking to engage stakeholders and alert the public. Subsequently, the agency must accept public comment on the proposal for a specified period, often 30 or 60 days. This comment period allows anyone to provide feedback on the proposed rules. After the comment period, the agency may revise the proposal based on the comments or post a new version for additional comments.

Therefore, the correct option in response to the given question is 'b': The agency must hold a public comment period for the public to weigh in on the impact and details of the statute. Following this period and analysis of public input, recommendations and public testimony will play a crucial role in how the agency moves forward, potentially leading to legislative changes or adaptations based on commission recommendations. Rulemaking processes, such as those by the Federal Communications Commission (FCC), exemplify how public comments are essential to developing final regulations.

Answer:

a. ​The government can absorb some of the surplus, but also creates a social loss since some of the wealth creating transactions are discouraged.

Explanation:

When a government applies tax levied to all products irrespective not the parties that are being taxed, the poor will be taxed the same way rich people are taxed. This will result in financial hardships for the portion of the population that do not have much resources. It will result in more revenue for the government.

The adverse effect of this is that the lower class will be discouraged from performing transactions that are viewed to be too expensive.

The upper class though will have no problem with this as they can easily bear the tax.

A good strategy will be to implement differential taxing where economic level of the parties performing the transaction is considered.

Answer:

the answer for what A larger R-squared suggests is option A) the estimated sample regression function explains a greater percentage of the explained variation in y.

Explanation:

R-squared is the coefficient of determination. It is the statistical standard that shows how close  the data are to the regression line.

It analyses the relationship between two variables and the scores could suggest a low R-squared value or a larger R-squared value.

70 percent is the bar line. below 70% is slow and above 70% is high.

Therefore a larger R-squared suggests that the estimated sample regression function explains a greater percentage of the total variation in Y.

Generally,  a larger R-squared suggests that the estimated sample regression function explains a greater percentage of the total variation in Y.

R-squared refers to the the coefficient of determination that shows how close a data are to the regression line.

The R-squared analyses the relationship between two variables and the scores could suggest a low R-squared value or a larger R-squared value.

Hence, the  larger R-squared suggests that the estimated sample regression function explains a greater percentage of the total variation in Y.

Therefore, the Option A is correct.

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Answer:

$2,434.50

Explanation:

The computation of the net present value is shown below:

Net present value = Present value for next three years - initial investment

where,

Present value for next three years is

= Annual payment × PVIFA factor for 10% for 3 years

= $5,000 × 2.4869

= $12,434.50

Refer to the PVIFA table

And, the initial investment is $10,000

So, the net present value is

= $12,434.50 - $10,000

= $2,434.50

Final answer:

The Net Present Value (NPV) of the investment for Fred is -$165.75. NPV is used to assess the profitability of an investment by comparing the present value of expected cash inflows to the initial investment cost.

Explanation:

The Net Present Value (NPV) of an investment is a measure used to assess the profitability of an investment by comparing the present value of expected cash inflows to the initial investment cost. To calculate the NPV, we need to discount the cash flows using Fred's cost of capital, which is 10%.

Using the formula for NPV, we discount the cash flows of $5000 for the next three years back to their present value. The present value of cash flows can be calculated as follows:

Year 1: $5000 / (1 + 10%)^1 = $4545.45

Year 2: $5000 / (1 + 10%)^2 = $4132.23

Year 3: $5000 / (1 + 10%)^3 = $3756.57

Then, we sum up the present values of all three years' cash flows and subtract the initial investment cost of $10,000:

NPV = $4545.45 + $4132.23 + $3756.57 - $10,000 = -$165.75

Therefore, the Net Present Value of the investment for Fred is -$165.75.

Answer:

Around -4 percentage points

Explanation:

The price elasticity is the measurement of change in quantity supplied or demanded with respect to the change in price.

The formula we can think for this problem would be:

Price Elasticity = Percentage Change in Quantity Demanded / Percentage Change in price

We let the initial price be 100 and initial quantity demanded of sales be 100

Given,

Percentage Change in Quantity is 20% increase

also

Percentage Change in Price is 5% decrease

We can say:

Price Elasticity = 20% / -5% = -4

For diversification, one should consider adding the security with the lowest correlation coefficient in the existing portfolio. This reduces risk as low correlation indicates the price movement of these securities is less likely to be identical.

The concept of portfolio diversification plays an essential role in minimizing risk and maximizing returns in finance. When introducing a new security to a portfolio, you should consider the correlation of the new security with the ones already present in the portfolio. To achieve the highest risk diversification, the portfolio manager should add the security with the lowest correlation coefficient to the existing ones within the portfolio. A lower correlation coefficient means the securities' prices move less in tandem, thus, if one security performs poorly, it will be offset by the performance of the other securities; this is in line with the proverb 'Don't put all your eggs in one basket'. It's also important to remember that diversification, does not eliminate all risk. It only reduces the unsystematic risk associated with individual securities.

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