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Yakvenalex [24]
3 years ago
12

Taussig Technologies is considering two potential projects, X and Y. In assessing the projects' risks, the company estimated the

beta of each project versus both the company's other assets and the stock market, and it also conducted thorough scenario and simulation analyses. This research produced the following data: Expected NPV - Standard deviation (sNPV)Project X : $350,000 - $100,000Project Y : $350,000 - $150,000 Project beta (vs. market) : 1.4 - 0.8 Correlation of the project cash flows with cash flows from currently existing projects. Cash flows are not correlated with the cash flows from existing projects. Cash flows are highly correlated with the cash flows from existing projects.Which of the following statements is CORRECT?a. Project X has more stand-alone risk than Project Y. b. Project X has more corporate (or within-firm) risk than Project Y. c. Project X has more market risk than Project Y. d. Project X has the same level of corporate risk as Project Y. e. Project X has less market risk than Project Y.
Business
1 answer:
Mrrafil [7]3 years ago
3 0

Answer:

C) Project X has more market risk than Project Y.

Explanation:

Market risk refers to risks associated with the performance of the whole market, e.g. changes in interest rates, changes in commodity prices. Taussig Technologies cannot eliminate market risks since they depend on external factors.  

Project X has a higher beta (vs. market) than project Y, therefore it has more market risk.

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Fiat money: a is currency backed by the gold in Fort Knox. b is currency from Italy. c has advantages over commodity-backed mone
Lapatulllka [165]

Answer:

Option D.

Explanation:

Fiat money refers to currency that is issued by the government and which is not backed by any physical commodity, such as gold or silver, but rather by the government that issued it.

The value of fiat money is gotten from the relationship that exists between supply and demand and the stability of the issuing government. The value is not based on the worth of a commodity backing it as is the case for commodity money.

Most modern paper currencies are fiat currencies, including the U.S. dollar, the euro, and other major global currencies. One risk that fiat money faces is the printing of too many of a particular currency, which can contribute to hyperinflation.

3 0
3 years ago
Read 2 more answers
Cash balance, September 1 (from a summer job) $7,560
neonofarm [45]

Answer:

Katherine Malloy

Personal Cash Budget for September, October, November, and December:

                                       September   October   November   December

Balance                             $7,560      $2,960     $3,060        $3,160

Apartment deposit return                                                            500

Earnings (net of taxes)          940           940           940             940

Borrowing                                                                                      340

Total Cash Receipts        $8,500      $3,900     $4,000        $4,940

Season football tickets          100

Additional entertainment     260           260           260            260

Semester Tuition                4,100                                              4,100

Rent                                       370           370            370             370

Food                                      210            210             210             210

Apartment deposit               500

Total cash payment        $5,540        $840          $840       $4,940

Balance                           $2,960     $3,060       $3,160            $0

Explanation:

Katherine Malloy's cash budgets for the months of September, October, November, and December give some snapshots of her cash receipts and payments, including the planned borrowing of no less than $340 that she must arrange in December in order to pay for her spring semester tuition on December 31.   From the budget, she gets a clearer picture of her cash needs, receipts and expenses.  She is comfortable from September till the end of the year.  But, Katherine must arrange for some cash receipts, either in student loan or support or get another part-time work to increase her income, to enable settle her tuition in December.

4 0
3 years ago
Sunlight Design Corporation sells glass vases at a wholesale price of $4.50 per unit. The variable cost to manufacture is $1.75
guapka [62]

Answer:

D) 5182 glass vases

Explanation:

<em>Contribution per glass vases:</em>

$4.5 selling price - $ 1.75 variable cost= 2.75

<em>Operating income:</em>

29,000 units x $ 2.75 - $ 8,500 = $71,250 operating income

<em>Target income is to obtain a 20% increase:</em>

71,250 x (1 + 20%) = 85,500 target income:

<em>units needed for target income:</em>

(85,500 target income + 8,500 fixed cost) / 2.75 contribution per unit= 34.181,81

aditional glass vases needed for target income:

34,182 - 29,000 = 5,182

3 0
2 years ago
An investment offers $6,400 per year for 15 years, with the first payment occurring one year from now. If the required return is
yawa3891 [41]

Answer:

PV= $62,158.4

Explanation:

Giving the following information:

Annual payment= $6,400

Number of periods= 15 years

Interest rate= 6% = 0.06

<u>First, we need to calculate the future value using the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= annual payment

FV= {6,400*[(1.06^15) - 1]} / 0.06

FV= $148,966.21

<u>Now, the present value:</u>

PV= FV/(1+i)^n

PV= 148,966.21 / (1.06^15)

PV= $62,158.4

4 0
3 years ago
Melissa owns the following portfolio of stocks. What is the return on her portfolio? Stock Amount Invested Return A $8.000 17.5%
s344n2d4d5 [400]

Answer:

The option c is a right answer.

Explanation:

For calculating the return on her portfolio, the steps is to be followed which is shown below:

Step 1: First compute the weight-age of each portfolio.

Step 2: Multiply the weight-age amount to invested return.

Step 3: After multiply the amounts, the expected return comes.

Mathematically,

Step 1:  Weight-age is to be computed by

= Each Portfolio amount  ÷ total stock amount

where total stock amount = $8,000 + $4,000 +$12,000

                                           =$24,000

For A = $8,000 ÷ $24,000 = 0.3333

For B = $4000 ÷ $24,000 = 0.1666

For C = $12000 ÷ $24,000 = 0.50

Step 2:

Expected Return for A = Weight-age × invested return

                                      = 0.3333 × 17.5%

                                      = 5.83%

Expected Return for B  = Weight-age × invested return

                                      =  0.1666 × 11.0%

                                      = 1.83%

Expected Return for C = Weight-age × invested return

                                      = 0.50 × 4.30%

                                      = 2.15%

So, the total return on her portfolio is a sum of Expected Return for A + Expected Return for B +Expected Return for C

=  5.83% + 1.83% + 2.15%

= 9.81 %

Hence, the return on her portfolio is 9.81% .

Therefore, the option c is a right answer

5 0
3 years ago
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