Answer:
d. rational investors could pick either A or B, depending on their level of risk aversion
Explanation:
In making investment decisions investors use various analysis to make an informed decision on which assets will suit their needs.
Two of such analysis are returns standard deviation.
Returns shows the percentage of original investment that is expected to come back as profit.
Standard deviation is the tendency of investment performance to deviate from a mean value.
The higher the standard deviation the more the risk of getting low returns or getting higher profit. This is well suited to risk takers.
The lower the standard deviation the less variance from a mean value, so risk averse investors will prefer this.
In the given scenario risk averse investors will prefer Investment A with expected return of 14% with a standard deviation of 4%. Because of the low standard deviation.
Risk takers will prefer investment B with expected return of 20% with a standard deviation of 9%. Because of the higher standard deviation.
Answer:
a. 0.89
b. 86.67%
c. $37,600
Explanation:
A. Current ratio = Current Assets / current liabilities
= 252,500 / 284,500
= 0.8875
= 0.89
B. Debt to assets ratio = Total liabilities / Total assets
=$374,000 / $431,500
=0.8667%
= 86.67%
C. Free cash flow = Net cash provided by operating activities - Capital expenditure
= $62,100 - $24,500
= $37,600
$4, is the optimal price to charge for a block of 4 units.
Market power is the ability of a firm to influence supply, demand, or both in order to change the price of a product in the marketplace.
A corporation with significant market power has the power to control its profit margin by manipulating the market price. It may also be able to raise barriers for potential new entries into the market.
Because they may set or change the retail price of an item without giving up market share, companies with market power are frequently referred to as "price makers."
To learn more about Market power here
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Answer: $10 per month
Explanation:
$10 would be an ideal amount for me to pay to have access to the various social media sites if the major sites are on offer.
I think this amount reasonable because I do not use social media all that much but I would still like access to a variety of them. I would essentially therefore, be paying for my reduced time on the net.
Some might say that the companies might not make a profit if they charge $10 a month but I think they will because they make most of their money from ads so it would be good for them to offer the lowest subscription prices so that they can capture more people which will appeal to advertisers.
Answer:
The tax consequences to Comet because of the stock redemption would be a reduction of $40,000 in E&P because of the exchange.
Explanation:
According to the given data we can conclude that the tax consequences to Comet because of the stock redemption would be Reduction of E& P due to exchange. In order to calculate the amount of Reduction we would have to make the following calculation:
Reduction of E& P due to exchange=Total E&P*Total voting Right Sold
According to the given data we have the following:
Total E&P=Comet has total E&P of $160,000
Total voting Right Sold=shares redeem by comet/shares by Pat+shares by Pam
Total voting Right Sold=50/ (100+100)
Total voting Right Sold=25%
Therefore, Reduction of E& P due to exchange=$160,000*25%
Reduction of E& P due to exchange=$40,000
The tax consequences to Comet because of the stock redemption would be a reduction of $40,000 in E&P because of the exchange.
