Answer:
The net loss of the trader amounts to $1,000, which means the correct option is A
Explanation:
The payoff is computed as:
Payoff = Strike price - Option's Stock price
where
Strike price is $90
Option's Stock Price is $85
Putting the values above:
Payoff = $90 - $85
= $5 per option
The trader bought 200 options, so the payoff would be:
Payoff = Options × Price per option
= 200 × $5
= $1,000
And the option cost would be:
Option cost = Options × Option Price
= 200 × $10
= $2,000
So, there computing net loss or gain as:
Net loss or gain = Payoff - Option cost
= $1,000 - $2,000
= $1,000 ( net loss)
Therefore, the correct option is A
The trader bought 200 put options and sold them at a loss due to the cost of obtaining the options, resulting in a total loss of $1,000.
Explanation:In this scenario, you purchased 200 put options. Put options give you the right to sell a stock at a set price. In this case, it was $90. You then exercised those options when the stock was $85. So, you essentially bought the stock for $85 and sold it for $90, netting you $5 profit per option. However, you initially paid $10 for each option. So, each put option resulted in a net loss of $5 ($5 profit - $10 cost). With 200 put options, your total loss would be $1,000 (200 options x $5 loss per option).
A. Loss of $1,000
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0/1 Question 5 In the country of Mainia, only cranberries and maple syrup are produced. In 2006, 50 units of cranberries are sold at $20 per unit, and 100 units of maple syrup are sold at $10 per unit. The price of cranberries was $10 per unit and the price of maple syrup was $15 per unit in 2005, which is the base year. For 2006, a. nominal GDP is $2,000, real GDP is $2,000, and the GDP deflator is 100. b. nominal GDP is $2,000, real GDP is $2,500, and the GDP deflator is 125. c. nominal GDP is $2,500, real GDP is $2,000, and the GDP deflator is 83.3. Selected:d. None of the above is correct.
Answer:
A. Nominal GDP is $2,000, real GDP is $2,000 and GDP deflator is 100.
Explanation:
Nominal GDP is the the total value of goods produced in a country in a given time period and valued at the current market price i.e not adjusted for inflation.
Here to calculate nominal GDP for Mainia in 2006, the total quantity of goods produced in the current year(2006) will be multiply by the current market price.
Cranberries Maple Syrups Total
50 units 100 units
$20 $10
$1,000 $1,000 $2,000
In contrast, Real GDP is measured using the base year price. The reason is to adjust for inflation which might have occurred between the two years.
Here to calculate real GDP for Mainia in 2006, the total quantity of goods produced in the current year (2006) will be multiply by the base year price (2005):
Cranberries Maple Syrups Total
50 units 100 units
$10 $15
$500 $1,500 $2,000
GDP deflator measures the movement in value of goods and services produced in the current year in relation to the base year value.
Here is the formula:
GDP deflator = Nominal GDP x 100
Real GDP
GDP deflator = $2,000 x 100
$2,000
GDP deflator = 100
Ford Motor Co. asks members of its target market to rate its cars and those of General Motors and Chrysler on a 7-point scale in terms of two dimensions (comfortable seats and engine power) so that it can establish a quadrant-grid map of these ratings. What type of analysis is Ford conducting?
A) Positioning
B) Combining
C) Qualifying
D) Dimensional
E) Insight management
Answer:
A) Positioning
Explanation:
Positioning is the process that outlines how a business intends to market it's products to consumers. An image is created by the marketing team based on market that is being targeted.
This image is created by using promotion, price, place, and product.
Ford is asking it's target market to rate it's cars so that it can establish a quadrant-grid map of these ratings, is a way to improve its positioning
Answer:
The correct answer is letter "A": Positioning.
Explanation:
The positioning analysis involves collecting data from the region where the company is targeting to start businesses. This study will give the firm an idea of what customers are looking for, thus, the organization will be better assessed on what type of products should be offered.
In what ways can shares be ""preferred""? In which ways are they similar and different from common shares? Give real-world examples.
Answer:
Ordinary shares and preferred shares are the two main types of shares that companies sell and are traded between investors in the open market. Each type grants shareholders a partial ownership of the company represented by the share.
Despite some similarities, common stock and preferred stock have some significant differences, including property related risk. It is important to understand the strengths and weaknesses of both types of actions before buying them.
Explanation:
Common Stock
First category of stock which is available for everyone i.e. public or common stock is the most common type of stock issued by companies. It gives shareholders the right to share the company's profits through dividends and / or capital appreciation. Common shareholders generally have voting rights, with the number of votes directly related to the number of shares they own. Of course, the company's board of directors can decide whether to pay dividends or not, and how much is paid.
The owners of common shares have "preference rights" to maintain the same proportion of ownership in the company over time. If the company distributes another offer of shares, shareholders can buy as many shares as necessary to keep their property comparable.
Common stocks have the potential to make a profit through capital gains. The performance and principal value of the shares fluctuate with changes in market conditions. The stocks, at what time when sold, may be worth more or less than their original cost. Shareholders are not sure of receiving dividend payments. Stockholders must consider their tolerance for investment risk before investing in common stock.
Preferred Stock
Preferred stocks are generally considered less volatile than common stocks, but generally have less earning potential. Preferred shareholders generally do not have voting rights, like common shareholders, but they have a greater claim on the company's assets. Preferred shares can also be "enforceable", which means that the company can buy shares from shareholders at any time and for any reason, although generally at a favorable price.
Preferred stock shareholders receive their dividends before common shareholders receive theirs, and these payments tend to be higher. Preferred stock shareholders receive fixed and regular dividend payments over a specific period of time, as opposed to variable dividend payments that are sometimes offered to common shareholders. Of course, it is important to remember that fixed dividends depend on the company's ability to pay as promised. In the event that a company declares bankruptcy, preferred shareholders are paid before common shareholders. However, unlike preferred shares, common shares have the potential to generate higher returns over time through capital growth. Remember that investments that seek to achieve higher rates of return also involve a greater degree of risk.
Fielder Company obtained by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at $85,000. The Common Stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of land.
When Fielder Company acquires land by issuing 2,000 shares of its $10 par value common stock, the journal entry would show a debit to the Land account and a credit to the Common Stock account, both for $20,000. The appraisal value of the land and the traded market price of the common stock are ignored.
Explanation:The subject at hand pertains to accounting, more specifically the process of journalizing the acquisition of an asset (in this case, land) by issuing common stock. The Company, Fielder, is buying the land by issuing 2,000 shares of its $10 par value common stock. Here, we disregard the recent appraisal value of the land and the common stock's traded market price in favor of the par value of the common stock, as per the 'par value method' used in accounting for such transactions.
The journal entry for this transaction would be:
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Suppose five workers died because of exposure to a toxic chemical. Calculate the YPLL for these five workers, given their ages at death were 20, 25, 30, 35, and 40. Use age 65 years as the endpoint.
Answer:
175 years
Explanation:
YPLL is years of potential life lost. Represents number of years a person would have lived if they didn't die early.
To calculate the YPLL use the following formula
YPLL= Σ(age at endpoint - age of death)
YPLL= (65-20)+(65-25)+(65-30)+(65-35)+(65-40)
YPLL= 45+ 40+ 35+ 30+ 25
YPLL= 175 years
Final answer:
To calculate the YPLL, we subtract each worker's age at death from the endpoint age of 65 and sum the results, giving a total YPLL of 175 years for all five workers.
Explanation:
The concept being discussed is the Years of Potential Life Lost (YPLL), which is a measure of premature mortality. To calculate the YPLL for the five workers who died at ages 20, 25, 30, 35, and 40, with the endpoint age set to 65, we subtract each individual's age at death from the endpoint age.
For the worker who died at age 20: 65 - 20 = 45 YPLL
For the worker who died at age 25: 65 - 25 = 40 YPLL
For the worker who died at age 30: 65 - 30 = 35 YPLL
For the worker who died at age 35: 65 - 35 = 30 YPLL
For the worker who died at age 40: 65 - 40 = 25 YPLL
Adding these together gives us the total YPLL for all five workers:
Total YPLL = 45 + 40 + 35 + 30 + 25 = 175 Years.
This is a significant measure as it provides more weight to deaths occurring at younger ages and is an important health statistic used to prioritize public health issues.
If Mary decides to invest 10 percent of her money in Firm A's common stock and 90 percent in Firm B's common stock, what is the expected rate of return and the standard deviation of the portfolio return? b. If Mary decides to invest 90 percent of her money in Firm A's common stock and 10 percent in Firm B's common stock, what is the expected rate of return and the standard deviation of the portfolio return? c. Recompute your responses to both questions a and b, where the correlation between the two firms' stock returns is negative 0.50. d. Summarize what your analysis tells you about portfolio risk when combining risky assets in a portfolio.
Answer:
Part a: The return of portfolio is 10.5% and standard deviation is 5.089%.
Part b: The return of portfolio is 14.5% and standard deviation is 11.12%.
Part c: The return of portfolio is 10.5% and standard deviation is 4.911% for case a while the return of portfolio is 14.5% and standard deviation is 10.51% for case b.
Part d: By changing the investment from firm A to firm B, the return is increased however the risk is also increased.
Explanation:
As the complete data is not available in the question, thus by referring the question found by google matching the context.
Following is the additional data
Firm A
Expected Return: 0.15
Standard Deviation: 0.12
Firm B
Expected Return: 0.10
Standard Deviation: 0.06
Correlation Coefficient=0.50
Part a:The investment value is WA=10%=0.1 and WB=90%=0.9 so
[tex]E_{portfolio}=[W_A \times E_A]+[W_B \times E_B]\\E_{portfolio}=[0.1 \times 0.15]+[0.9 \times 0.1]\\E_{portfolio}=0.105 =10.5 \%[/tex]
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.1 \times 0.12)^2+(0.9 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times 0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.06089 =6.089\%[/tex]
So the return of portfolio is 10.5% and standard deviation is 5.089%.
Part b:The investment value is WA=90%=0.9 and WB=10%=0.1 so
[tex]E_{portfolio}=[W_A \times E_A]+[W_B \times E_B]\\E_{portfolio}=[0.9 \times 0.15]+[0.1 \times 0.1]\\E_{portfolio}=0.145 =14.5 \%[/tex]
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.9 \times 0.12)^2+(0.1 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times 0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.1111 =11.12\%[/tex]
So the return of portfolio is 14.5% and standard deviation is 11.12%.
Part c:Now the correlation coefficient is -0.5 so
Calculation for part a now yields
The investment value is WA=10%=0.1 and WB=90%=0.9so
The value of return will remain same i.e. 10.5%
Whereas the standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.1 \times 0.12)^2+(0.9 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times -0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.04911=4.911\%[/tex]
So the return of portfolio is 10.5% and standard deviation is 4.911%.
Calculation for part a now yields
The investment value is WA=90%=0.9 and WB=10%=0.1 so
The value of return will remain same i.e. 14.5%
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.9 \times 0.12)^2+(0.1 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times -0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.1051 =10.51\%[/tex]
So the return of portfolio is 14.5% and standard deviation is 10.51%.
Part d:It is evident from the example that by changing the investment from firm A to firm B, the return is increased however the risk is also increased.
For the first investment scenario(A:10% B:90%), (part:a), The return is 10.5% with a risk of 5.089%For the second investment scenario(A:90% B:10%), (part:b), The return is 14.5% with a risk of 11.12%Here is clearly visible that higher rate of return also increases the risk. In this case for an increase of 4% in the return, there is a rise of 6.031%
The effect of negative correlation coefficient is however minimal as indicated in part c.
For the first investment scenario, the risk is reduced from 5.089% to 4.911%For the second investment scenario, the risk is reduced from 11.12% to 10.51%This is not a significant effect.
Internal resources, such as the legal department, training department, information technology department, tend to be under-utilized, leading to a death spiral, when: a. the internal pricing system utilizes full costs b. All of the answers are correct c. managers may decide to reduce the quantity of services used d. the internal pricing system seeks to recover sunk costs e. managers may choose whether to purchase the service internally or externally
Answer:
b. All of the answers are correct.
Explanation:
Death Spiral is a situation when a company's goods or services produced are declining and fixed cost is same. The company will be exposed to a burden of fixed cost if its output is reduced.
In this question the various departments of a company are underutilized. The fixed price allocated to each department will be same hence creating a burden on a company's funds. Managers may decide to reduce the services they use to reduce the cost of their department. The internal pricing system will start recovering the sunk cost of company. Managers will also consider purchasing services internally or externally whichever is cost effective. All of the statements are correct there b is correct option.
The supply function for good X is given by Qxs = 1,000 + PX - 5PY - 2PW, where PX is the price of X, PY is the price of good Y and PW is the price of input W. If the price of input W increases by $10, then the supply of good X
Answer:
Will increase by 10 units
Explanation:
Given the formula for quantity supplied Qxs = 1,000 + PX - 5PY - 2PW
We are told to gauge the effect of increase in input (W) on quantity supplied (Qxs)
So assuming this protein of the equation is constant
1,000 + PX - 5PY= k
That is there is no change in price of X and Y
Qxs= k- P(W)
So it can be seen that an increase in P(W) is a negative change in the equation
Qxs k - ∆10
Resulting in reduction in Qxs by 10
Dake Corporation's relevant range of activity is 3,200 units to 8,000 units. When it produces and sells 5,600 units, its average costs per unit are as follows: If 4,600 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
To estimate the total indirect manufacturing cost when 4,600 units are produced by Dake Corporation, we can use the average cost per unit and assume a linear relationship between units produced and total cost.
Explanation:The relevant range of activity for Dake Corporation is from 3,200 units to 8,000 units. When it produces and sells 5,600 units, we can calculate the average cost per unit by dividing the total costs incurred by the number of units produced. To find the total amount of indirect manufacturing cost incurred when 4,600 units are produced, we can use the average cost per unit to estimate the total cost.
Given that the relevant range is from 3,200 units to 8,000 units, we can assume a linear relationship between the number of units produced and the total cost. Therefore, we can calculate the average cost per unit using the given information:
Calculate the slope (cost per unit) using the formula: [(average cost per unit at the highest level - average cost per unit at the lowest level) / (highest level - lowest level)].Use the slope to estimate the total indirect manufacturing cost when 4,600 units are produced by multiplying the slope by 4,600 units.Learn more about Estimating total indirect manufacturing cost here:https://brainly.com/question/33974561
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Final answer:
The student is asking about the total indirect manufacturing cost for producing a certain number of units within the context of economies of scale. More information on costs at various production levels is needed to provide an accurate answer, which is not available in the details provided by the student.
Explanation:
The student's question pertains to the concept of economies of scale in a production setting. Economies of scale occur when increasing production leads to a lower average cost per unit. This is because fixed costs are spread over a higher quantity of units, and operational efficiencies often increase with higher levels of production. However, this student is asking for the total indirect manufacturing cost at a production level of 4,600 units, based on given data for a company with a relevant activity range.
Unfortunately, to accurately answer this question, more specific information is required, such as the average costs at different levels of production or the fixed and variable components of the total costs, none of which is provided in the student's question. Without these details, we cannot compute the total indirect manufacturing cost for the Dake Corporation at the production level of 4,600 units.
The European Union (EU) a. allows trade across country borders without tariffs b. was dissolved under the Geneva Convention c. is an abbreviation for the act of state doctrine d. Both allows trade across country borders without tariffs and was dissolved under the Geneva Convention
Answer:
a. allows trade across country borders without tariffs
Explanation:
The geneve convention was about military rules to protect human rights and i was signed on 1949
While the European Union or Eurozone is a free-trade zone where the factors are free to move cross the members and the union. This, was the EU main goal. To eestimulate trade among the members and create a better monetary policy through the adoption of a single currency (Euro)
Final answer:
The European Union (EU) enables trade across member country borders without tariffs and is not dissolved; rather, it continues to promote economic integration among European countries.
Explanation:
The European Union (EU) is best described as an option (a): it allows trade across country borders without tariffs. The EU was established in the years following World War II with the purpose of tying European economies together to avoid future conflicts. It began as a free trade association and evolved into a full economic union. One of its key achievements was the introduction of a common currency, the euro, which replaced many national currencies like the German mark and the French franc, though some member states retained their own currency. A crucial aspect of the EU is its efforts to eliminate barriers to the free movement of goods, labor, and capital across Europe.
It is important to clarify that the EU was not dissolved under the Geneva Convention, and it is not an abbreviation for the act of state doctrine. Moreover, while the United Kingdom voted to leave the EU, an event known as Brexit, the EU itself remains active and continues its mission to foster economic cooperation among its member states.
Stanley Company uses a job cost system. Manufacturing overhead has been overallocated by $ 6 comma 600 for the year. Actual overhead incurred was $ 105 comma 000. Other balances are: Raw materials inventory at end of year $ 15 comma 000 Work in process inventory at end of year $ 32 comma 000 Finished goods inventory at end of year $ 42 comma 400 Unadjusted cost of goods sold for the year $ 290 comma 400 What will adjusted cost of goods sold be after closing manufacturing overhead?
Answer:
Adjusted Cost of Goods sold = $283,800
Explanation:
The question is to determine the adjusted cost of goods after closing manufacturing overhead.
First step is that the Manufacturing overhead of Stanley Company has been over-applied by $6,600.
The implication or meaning is that the overhead attributed to the job undertaken was more than the actual overhead that was incurred.
Over-applied manufacturing expense would usually overstate the cost of goods sold. Therefore
Adjusted Cost of Goods sold = Unadjusted cost of goods sold - Over-applied amount of overhead
= $290,400 - $6,600
= $283,800
The Company is experiencing an increase in competition, and at the same time they are building more production facilities in Southeast Asia. In this scenario, the top management team is most likely to:_______a. Give lower-level managers the authority to make decisions to benefit the firm.b. Pull decision-making responsibility from low-level management, taking it on themselves.c. Restructure to reflect a more bureaucratic, stable organization.d. Rid themselves of all buffering product.e. Increase the cost of their products.
Answer: The correct answer is "a. Give lower-level managers the authority to make decisions to benefit the firm.".
Explanation: In this scenario, the top management team is most likely to: Give lower-level managers the authority to make decisions to benefit the firm because as the company is expanding to meet the demand of a greater part of the market, it is likely that senior managers are overwhelmed with occupations and decisions so they can authorize lower level managers to make lower level decisions , always for the benefit of the company.
The following statements are true. Explain why. a. If a bond’s coupon rate is higher than its yield to maturity, then the bond will sell for more than face value. b. If a bond’s coupon rate is lower than its yield to maturity, then the bond’s price will increase over its remaining maturity.
Answer:
A Bond's current market value represented by [tex]B_{0}[/tex] is the present value of a bond as on today. Present value of a bond is it's future cash flows in the form of coupon payments and principal repayment discounted at investor's expectation in the market also referred to as Yield to maturity(YTM).
Present value of a bond is given by the following equation,
[tex]B_{0} = \frac{C}{(1\ +\ YTM)^{1} } +\ \frac{C}{(1\ +\ YTM)^{2} } \ +\ ......+\ \frac{C}{(1\ +\ YTM)^{n} } \ +\ \frac{RV}{(1\ +\ YTM)^{n} }[/tex]
where C= Annual coupon payments
YTM = Yield to maturity/ cost of debt/ market rate of return on similarly priced bonds
RV = Redemption value of bond
n = number of years to maturity
a. A bond's coupon rate is higher than it's yield to maturity, then the bond will sell for more than face value.
Hence, if the company pays more interest than what is paid in the market on similarly priced bonds, such bonds shall sell at more than their face value.
b. If a bond's coupon rate is lower than it's yield to maturity, then the bond's price will increase over it's remaining maturity.
Similarly, if a bond pays lower rate of interest than the market rate of interest on similarly priced bonds, the bond shall sell at lower than it's face value and the price will increase over the remaining life of such bonds.
You short sold 1,100 shares of stock at a price of $29 and an initial margin of 55 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price?
Answer:
No of stock = 1100
Price of Stock = 29
Short sale = 31900
Initial Margin % = 55%
Initial Margin = 17545
Total value = 49445
The earnings of the sale is 31900, which is deposited in our account for a total account value of $49,445 (31900+55%)
Maintenance Margin = 40%
Margin Call Value = 49445/ (1+0.4)
Margin Call Value = 35317.86
Price per share = 35317.86 / 1100
Price per share = 32.11
So a margin call will be triggered when the price of the shorted security rises to $32.11
Margin Call Price = 32.11
Account Equity = 32.11*1100
Account Equity = 35318
One way to interpret the change in Blue Hamster's accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts. This statement is , because: _______.
Answer:
The balance of account receivable for year 2 is increase from the balance of year 1.
Explanation:
The balance of account receivable for year 2 is increase from the balance of year 1. This means the thee are more credit sales and less receipts from the customers in year 2 as compared to Year 1. Credit sales increases the account receivable balance but it should be settlement in the form of receipts from the customers.
The rate of return available on the next best investment alternative for the saver refers to the discount cost of funds. True False
Answer:
True because cost of funds to company are the required return of the investors so saying that the rate of return used for investment appraisal is discount rate(discount cost of funds) derived from the Dividend valuation Model, Gordon Growth Model, Capital Asset pricing model or credit spread. These are the ways to compute the required return of investors.
Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed cost. How many units must be sold to make $63,000?
a. 5,800
b. 17,400
c. 4,320
d. 3,600
Which of the following NOT a reason firms are expanding their supply bases to include foreign suppliers?a. Lower product costb. Lower shipping rates due to lower tariffsc. Better product qualityd. Overseas supplier holding the patent to the product
Answer:
The answer b. Lower shipping rates due to lower tariffs
Explanation:
Lower overall product cost is a reason for engaging in international trade
If a corporation has only one class of stock, the account is entitled Common Stock or a.Owners' Stock. b.Preferred Stock. c.Capital Stock. d.Member Stock.
Answer:
c. Capital Stock.
Explanation:
The Common stock is also known as Capital stock if a corporation has only one class of stock. Common stock gives voting rights to its shareholders while preferred stock does not give voting rights. Capital stock gives shareholders an ownership position in the company. It gives rights and powers to shareholders. Investors buys this stock for a regular stream of dividend income as well as earn capital gains in the end when they sell the stock.
Answer:
capital stock.
Explanation:
Daniel, the owner of a bookstore, decides to reinvest his personal profits from the current fiscal year toward renovating the store and expanding its inventory. In the context of owners' equity, the profits that Daniel reinvests in the bookstore are called:
A. bonus shares.
B. retained earnings.
C. current liabilities.
D. equity releases.
Answer:
B. retained earnings
Explanation:
Retained earnings -
It refers to the amount of monetary value left on with any business after paying the dividends to the shareholders , is referred to as the retained earnings .
The amount left with the company can be used to reinvest for any other new project , in order to expand the business .
The earnings can be positive as well as negative .
Hence , from the given scenario of the question ,
Daniel uses his retained earnings in order to expand his business .
An assumption that makes an economic model simpler without affecting its conclusions in important ways is A. an indication of a positive assumption B. an efficient assumption C. useful in disguising the valid conclusions D. a simplifying assumption E. a critical assumption
Answer:
An assumption that makes an economic model simpler without affecting its conclusions in important ways is, D. simplifying assumption.
Explanation:
Every economic model begins with assumptions about the world. There are two types of assumptions in a model: simplifying assumptions and critical assumptions. A simplifying assumption is just what it sounds like—a way of making a model simpler without affecting any of its important conclusions.
Answer:
D
Explanation:
A simplifying assumption is a way of making a model simpler without affecting any of its important conclusions. The purpose of a simplifying assumption is to rid a model of extraneous detail so its essential features can stand out more clearly. We might assume that there are only two goods that households can choose from or that there are only two nations in the world. We make
such assumptions not because they are true, but because they make a model easier
to follow and do not change any of the important insights we can get from it.
On June 30, Coral, Inc. finished Job 750 with total job costs of $ 4 comma 500, and transferred the costs to Finished Goods Inventory. On July 6, Coral sold goods to a customer for $ 5 comma 500 cash. Which of the following is the correct journal entry to record the cost of goods sold? Assume the perpetual inventory system is used. A. debit Finished Goods Inventory $ 4 comma 500 and credit Cost of Goods Sold $ 4 comma 500 B. debit Cost of Goods Sold $ 4 comma 500 and credit Finished Goods Inventory $ 4 comma 500 C. debit Cost of Goods Sold $ 4 comma 500 and credit WorkminusinminusProcess Inventory $ 4 comma 500 D. debit WorkminusinminusProcess Inventory $ 4 comma 500 and credit Cost of Goods Sold $ 4 comma 500
Answer:
B. debit Cost of Goods Sold $ 4,500 and credit Finished Goods Inventory $ 4,500
Explanation:
The cost of goods sold will be 4,500 cost of the job 750
We are going to debit the cost of good sold for the amount it cost to make job 750
and credit the finished goods inventory as the amount of goods available for sale decreases.
When we sale we deliver an asset of ours (finished goods) thus, we have to make it decrease.
Which of the following accounts is an asset?A.Service RevenueB.Accounts PayableC.Prepaid ExpenseD.Salaries Expense
Answer:
6
Explanation:
the assest of the book is to the book but must not be added to
The account classified as an asset among the options is Prepaid Expense. This is because it represents payments made for goods and services to be received in the future, hence signaling economic benefits for the company.
Explanation:Among the listed accounts, C. Prepaid Expense is considered an asset. In accounting, an asset is anything that a person or business owns, that has future economic value. Prepaid Expenses are payments made in advance for goods and services that will be received in the future. These prepayments are considered assets because they provide future economic benefits to the company. For example, if a company pays for insurance coverage in advance, this is recorded as a Prepaid Expense and is an asset.
On the other hand, Accounts Payable is a liability account, and Service Revenue and Salaries Expense are part of the income statement but not asset accounts.
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The future value of $200,000 invested at a 7% annual rate, compounded quarterly for 3 years is _____. (Do not round your intermediate calculations. Round the final answer to the nearest two decimal places.) $246,287.86
Answer:
FV = 246,287.86
Explanation:
The Future value (FV) of an investment is the total amount (principal plus interest) that will accumulate in the future where interest is paid and compounded at a particular rate per period for a certain number of periods.
In a simple language, it is the worth, in the future, of an investment made today, where interest is paid periodically over the investment period. Of course, you should expect this value to be greater than the amount investment.
The Future Value (FV) of an investment is ascertained using the formula below:
FV = PV × (1+r/m)^(n×m)
FV - Future Value, r -interest rate per period, n- number of periods, PV -present value- amount invested., m- is the number of compounding period.
So, we can apply this to the formula:
The number of compounding period ( "m" ) in this question is four (4 ) because we have four quarters in a year
FV = 200000× (1+0.07/4)^(3×4)
= 200,000 × 1.2314393
FV = 246,287.86
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. (LO 3-4)
a. What is the remaining margin in the account?
b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
c. What is the rate of return on the investment?
Part (a): Remaining Margin in the Account
Old Economy Traders were required to put up 50% of the total value of the shares that were short sold as the initial margin requirement is 50%.
At the $40 starting price, 1,000 Internet Dreams shares are worth $40,000. As a result, they had to put down a $20,000 initial margin.
The stock price has risen to $50 per share, and the value of 1,000 shares is now $50,000.
[tex]\[ \text{Remaining Margin} = \text{Initial Investment} - \text{Current Value} \\\\= $20,000 - $50,000 = -$30,000 \][/tex]
Part (b): Margin Call
The maintenance margin requirement is 30%. This means that the account's equity must be at least 30% of the total value of shares.
Calculate the account's equity at the current value of the shares:
[tex]\[ \text{Equity} = \text{Current Value} - \text{Remaining Margin} \\\\= $50,000 - (-$30,000) \\\\= $80,000 \][/tex]
Now, calculate the minimum required equity based on the maintenance margin requirement:
[tex]\[ \text{Minimum Required Equity} = \text{Maintenance Margin} \times \text{Total Value} \\\\= 0.30 \times $50,000 \\\\= $15,000 \][/tex]
Part (c): Rate of Return on the Investment
The rate of return on the investment is calculated as the total gain (including dividends) divided by the initial investment.
Total Gain = Change in Stock Value + Dividends
Total Gain = ($50 - $40) × 1,000 + $2 × 1,000 = $12,000
Rate of Return = (Total Gain / Initial Investment) × 100
Rate of Return = ($12,000 / $20,000) × 100 ≈ 60%
Thus, the rate of return on the investment is approximately 60%.
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a. The remaining margin in the account is -$30,000. b. Old Economy will receive a margin call. c. The rate of return on the investment is approximately 30%.
Explanation:a. To calculate the remaining margin in the account, we need to determine the amount of the initial margin and subtract the current value of the short position from it. The initial margin is 50%, so the initial margin amount would be 50% of the short position value, which is 50% of 1000 shares multiplied by the initial price of $40. Hence, the initial margin is $20,000. Given that the current price is $50, the value of the short position is $50 multiplied by 1000 shares, which is $50,000. Subtracting the short position value from the initial margin, we get the remaining margin in the account, which is $20,000 - $50,000 = -$30,000.
b. To check if Old Economy will receive a margin call, we need to calculate the maintenance margin amount. The maintenance margin requirement is 30%, so the maintenance margin amount would be 30% of the short position value, which is 30% of $50,000. Hence, the maintenance margin is $15,000. Comparing the remaining margin (-$30,000) with the maintenance margin ($15,000), we can see that the remaining margin is less than the maintenance margin. Therefore, Old Economy will receive a margin call.
c. The rate of return on the investment can be calculated using the formula: Rate of return = (Ending Value - Starting Value + Dividends) / Starting Value. Given that the starting value is $40, the ending value is $50, and the dividends per share is $2, the rate of return can be calculated as follows: ($50 - $40 + $2) / $40 ≈ 0.30 or 30%.
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What are some of the advantages and disadvantages of permitting auditors to provide nonaudit services (such as tax services) to clients?
Final answer:
Permitting auditors to provide nonaudit services to clients has advantages such as convenience, better understanding of the client's business, and cost efficiency. However, there are disadvantages including conflict of interest, reduced skepticism, and perception of bias.
Explanation:
Permitting auditors to provide nonaudit services, such as tax services, to clients has both advantages and disadvantages. Some advantages include:
Convenience: Clients can have their auditing and tax needs addressed by the same firm, saving time and effort in engaging multiple service providers.Better understanding of the client's business: By providing nonaudit services, auditors gain a deeper understanding of the client's financial operations, which can enhance the quality of their auditing services.Cost efficiency: Bundling audit and nonaudit services may result in cost savings for clients.However, there are also disadvantages to permitting auditors to provide nonaudit services:
Conflict of interest: Providing nonaudit services to clients may compromise the independence and objectivity of auditors, especially if the nonaudit services are lucrative.Reduced skepticism: Auditors may become less skeptical when auditing their own tax advice or nonaudit services, which can potentially result in lower quality audits.Perception of bias: Clients and stakeholders may perceive a lack of independence if the same firm provides both audit and nonaudit services, raising doubts about the credibility of the financial statements.Adjusting items:
1. A physical inventory shows supplies on hand of $3,000 at year end. 2. The prepaid rent covers December 2016 thru March 2017 rents. 3. December depreciation on equipment is $11,000 per month. 4. At year end Wages of $10,000 were earned but unpaid.Use this information to prepare the general Journal entry
This is an uncompleted question. Here, is a completed question
The following is the Bravo Unlimited unadjusted Trial Balance. Bravo Unlimited Unadjusted Trial Balance December 31, 2016 Account Title Debit Credit $88,450 Cash Accounts Receivable 231,860 Supplies 6,255 Prepaid Rent 11,000 Equipment 395,285 Accumulated Depreciation $224,260 Accounts Payable 72,555 Wages Payable 0 220,000 Capital Stock Retained Earnings 111,145
Service Revenue 893,105 Interest Income 1,500 Rent Expense 60,500 Wages Expense 527,260 Supplies Expense 42,520 Utilities Expense 8,595 Depreciation Expense 144,000 Interest Expense 6,840 $1,522,565 $1,522,565 Totals Adjusting Items: 1. A physical inventory shows supplies on hand of $3,000 at year end. 2. The prepaid rent covers December 2016 thru March 2017 rents. 3. December depreciation on equipment is $11,000 per month 4. At year end Wages of $10,000 were earned but unpaid. Use this information to prepare the General Journal entry (without explanation) for the required end of the month adjustment.
Explanation:
The adjusting entries are shown below:
1. Supplies expense A/c Dr $3,255
To supplies A/c $3,255
The supplies expense is computed by
= Supplies balance - supplies on hand
= $6,255 - $3,000
= $3,255
2. Rent expense A/c Dr $2,750 ($11,000 ÷ 4 months)
To Prepaid rent A/c $2,750
3. Depreciation Expense A/c Dr $11,000
To Accumulated Depreciation - Equipment A/c $11,000
4. Wages Expense A/c Dr $10,000
To Wages payable A/c $10,000
If a person works on a ship for a cruise line headquartered in the country where he was born and resides, then he is a Answers: A. PCN B. HCN C. TCN D. not enough information
Answer:
The correct answer is letter "A": PCN.
Explanation:
In international staffing, a Parent Country National (PCN) is an employee that is hired to work in the same country from where the employee is resident and where the company has its headquarters. Usually, firms hire PCNs when foreign cultures are distant.
An index has a market value of $689,400 at the beginning of the period and $722,009 at the end of the period. If you want the beginning index value to be 100, what is the ending index value?
Answer:
The ending index value is 104.73
Explanation:
we will simply divide the end of the period value over the beginning of the period and then multiply by 100 to get the ending period index.
722,009 / 689,400 x 100 = 104,73
The following periods will also be converted into a price index considering the base year. We will not use the previous year base price.
E-trex, Inc. wanted Prince, a professional basketball player, to endorse its products. Prince, however, was not interested. E-trex was not deterred and hired a person who looked and sounded liked Prince for its commercials.
a.E-trex has defamed Prince.
b.E-trex has interfered with a contract.
c.E-trex has interfered with a prospective advantage.
d.E-trex's conduct raises the issue of commercial exploitation.
Answer:
d.E-trex's conduct raises the issue of commercial exploitation.
Explanation:
The Commercial exploitation are the activities that provide benefit to the property of the owner. Since E-trex Inc. hired a person who looked and sounded like Prince so that they can get benefit from the commercials, they raised the issue of commercial exploitation.
E-trex, Inc.'s conduct raises the issue of commercial exploitation by hiring an impersonator who resembled Prince for its commercials.
Explanation:E-trex, Inc.'s conduct raises the issue of commercial exploitation. By hiring an impersonator who resembled Prince for its commercials, E-trex attempted to deceive consumers into thinking that Prince was endorsing their products. This is an example of using a well-known person's image and reputation to promote a brand without their consent.