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kodGreya [7K]
1 year ago
12

Assume that over the past 88 years, u. S. Treasury bills had an average return of 3. 5 percent as compared to 6. 1 percent on lo

ng-term government bonds. During this same time period, assume inflation averaged 3. 0 percent. What was the average nominal risk premium on the long-term government bonds?.
Business
1 answer:
zheka24 [161]1 year ago
8 0

The average nominal risk premium on the long-term government bonds was 2.6 percent.

A risk premium is the expected investment return on an asset that is higher than the risk-free rate of return. The risk premium on an asset is a form of compensation for investors. It compensates investors for tolerating the additional risk in a given investment over that of a risk-free asset. Subtracting the return on risk-free investment from the return on investment yields the risk premium.

The nominal risk premium is:

Nominal Risk-Free Rate - Inflation Premium = Real Risk-Free Rate. Nominal rates are the rates we encounter on a daily basis, such as interest rates from banks and other financial institutions.

Nominal risk premium = 6.1 % -3.5 %

= 2.6%.

Learn more about risk premium here-

brainly.com/question/15570868

#SPJ4

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Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into ya
sammy [17]

Answer:

Port Ormond Carpet Company

1. Journal Entries:

Jan. 31 Debit Materials $500,000

Credit Accounts payable $500,000

To record the purchase of materials on account.

Jan. 31 Debit Work-in-Process - Spinning $275,000

Credit Materials $275,000

To record the materials requisitioned.

Jan. 31 Debit Work-in-Process -Tufting $110,000

Credit Materials $110,000

To record carpet backing

Jan. 2 Debit Factory Overhead - Spinning $46,000

Debit Factory Overhead - Tufting $39,500

Credit Materials $85,500

To record indirect materials used.

Jan. 31 Debit Work-in-Process - Spinning $185,000

Debit Work-in-Process - Tufting $98,000

Credit Factory Payroll $283,000

To record direct labor costs.

Jan 31: Debit Overhead - Spinning $18,500

Debit Overhead - Tufting $9,000

Credit Factory Payroll $27,500

To record indirect labor costs.

Jan. 31: Debit Factory Overhead - Spinning $12,500

Debit Factory Overhead - Tufting $8,500

Credit Factory Depreciation Expense $21,000

To record depreciation costs.

Jan. 31:

Debit Factory Overhead - Spinning $2,000

Debit Factory Overhead - Tufting $1,000

Credit Factory Insurance $3,000

To record insurance costs.

Jan. 31 Debit Work-in-Process - Spinning $80,000

Credit Factory Overhead - Spinning $80,000

To record overhead costs applied.

Jan. 31 Debit Work-in-Process - Tufting $55,000

Credit Factory Overhead $55,000

To record overhead costs applied.

Jan. 31 Debit Work-in-Process - Tufting $547,000

Credit Work-in-Process - Spinning $547,000

To record the transfer to Tufting department.

Jan. 31 Debit Finished Goods Inventory $807,200

Credit Work-in-Process- Tufting $807,200

To record the transfer to Finished Goods.

Jan. 31 Debit Cost of Goods Sold $795,200

Credit Finished Goods $795,200

To record the cost of goods sold.

2. January 31 balances of the inventory accounts:

Finished Goods = $74,000

Work-in-Process - Spinning = $28,000

Work-in-Process - Tufting = $31,300

Materials = $46,500

3. Factory Overhead Accounts Balances:

Spinning $1,000 (Debit)  

Tufting $3,000 (Credit)

Explanation:

a) Data and Calculations:

January 1 Inventories:

Finished Goods = $62,000

Work in Process- Spinning = $35,000

Work in Process - Tufting = $28,500

Materials = $17,000

Finished Goods

Account Titles                                Debit      Credit

Jan. 1 Beginning balance           $62,000

Jan. 2 Work-in-Process-Tufting 807,200

Jan. 31 Cost of Goods Sold                     $795,200

Jan. 31 Ending balance                                74,000

Work-in-Process - Spinning

Account Titles                   Debit      Credit

Beginning balance        $35,000

Jan. 2 Materials            275,000

Jan. 31 Direct labor       185,000

   Applied overhead      80,000

    Work-in-Process -Tufting        $547,000

Jan. 31 Ending balance                   28,000    

Work-in-Process - Tufting

Account Titles                             Debit      Credit

Jan. 1 Beginning balance        $28,500

Jan. 2 Carpet backing              110,000

Jan. 31 Direct labor                   98,000

 Jan. 31 Applied overhead        55,000

Jan. 31 WIP- Spinning            547,000

Jan. 31 Finished Goods                        $807,200

Jan. 31 Ending balance                              31,300

Cost of Goods Sold

Account Titles                             Debit      Credit

Jan. 31 Finished Goods       $795,200

Materials

Account Titles                            Debit       Credit

Jan. 1 Beginning balance         $17,000

Jan. 2 Accounts payable       500,000

Jan. 31 Work-in-Process - Spinning           $275,000

Jan. 31 Work-in-Process - Spinning               46,000

Jan. 31 Factory Overhead - Tufting               39,500

Jan. 31 Factory Overhead - Tufting              110,000

Jan. 31 Ending balance                                  46,500

Factory Overhead - Spinning

Account Titles                                    Debit      Credit

Jan. 31 Materials - Spinning             46,000

Jan. 31 Payroll - Spinning                  18,500

Jan. 31 Depreciation - Spinning       12,500

Jan. 31 Factory insurance-Spinning 2,000

Jan. 31 Work in Process                                  80,000

Jan. 31 Balance                                  1,000

Factory Overhead - Tufting

Account Titles                                    Debit      Credit

Jan. 31 Materials - Tufting                39,500

Jan. 31 Payroll - Tufting                      9,000

Jan. 31 Depreciation - Tufting           8,500

Jan. 31 Factory insurance- Tufting    1,000

Jan. 31 Work in Process                                   55,000

Jan. 31 Balance                                                   3,000

7 0
3 years ago
Beverly Company has determined a standard variable overhead rate of $1.25 per direct labor hour and expects to incur 1 labor hou
Elan Coil [88]

Answer:

(i) 95 (F)

(ii) 125 (F)

(iii) 220 (Overapplied)

Explanation:

Variable Overhead Rate Variance:

= Actual Hours × (Actual Rate - Standard Rate)

= 1,900 × ($1.20 - $1.25)

= 95 (F)

Variable Overhead Efficiency Variance:

= Standard Rate × (Actual Hours - Standard Hours)

= $1.25 × (1,900 - 1 × 2,000)

= 125 (F)

Over- or Underapplied Variable Overhead:

= Actual Overhead Incurred - Overhead Applied

= (1,900 × $1.20) - (2,000 × $1.25)

= 220 (Overapplied)

7 0
3 years ago
Suppose a firm in a competitive market earned $3,000 in total revenue and had a marginal revenue of $30 for the last unit produc
Vera_Pavlovna [14]

Answer:

100 units were sold at $30 per unit

Explanation:

theoretically, in a perfect competition market, the price of a good = marginal revenue = marginal cost. Also, the market sets the price, not the individual firm.

If total revenue = $3,000 and marginal revenue per unit = $30, then we can assume that the sales price of each unit was $30, therefore, they sold $3,000 / $30 = 100 units.

3 0
3 years ago
An increase in government spending initially and primarily shifts
Ira Lisetskai [31]

Answer:

The correct answer is option a.

Explanation:

The aggregate demand in an economy comprises of consumer spending, government spending, investment expenditure, and net exports.

An increase in any of these components will cause the aggregate demand to increase or decrease.

So when the government spending increases the aggregate demand will increase. This increase in the aggregate demand will cause the aggregate demand curve to shift to the right.

This rightward shift in the aggregate demand curve will cause the price level and equilibrium quantity to increase.

8 0
3 years ago
John dropped out of school after the ninth grade and now must support himself though he has few skills. he is a part-time employ
Lelu [443]
They should try to take free online school classes
3 0
3 years ago
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