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aksik [14]
3 years ago
13

"If the option will cost the investor an additional $10,000, should the investor purchase the option? Enter your answer in thous

ands dollars. For example, an answer of $200 thousands should be entered as 200,000."
Business
1 answer:
kykrilka [37]3 years ago
6 0

Answer:

“Should” or “should not” depend on the cost rate of the option and the risk appetite of investors.

Explanation:

An option is a contract that allows investors to buy or sell instruments such as security, Exchanged Traded Fund or an index at a pre-determined price over a certain period of time.

If the option will cost the investor an additional $10,000 and it is the cost for an option of $10 million investment, then it cost only 0.1% additionally, but it can secure the position of this investment; then the investor should buy this option.

Vice versa, if the additional $10,000 is much more than expected profit, and even lower but significantly drop down the total profit of an investment; and the investor always wish to have a high profit regardless high risk; then he shouldn’t buy this option.

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Point x on a linear production possibilities curve represents a combination of 50 watches and 20 clocks, and point y represents
Veronika [31]

Based on the coordinates of point x and those of point y on the linear production possibilities curve, the opportunity cost of producing one watch is 2 fewer clocks.

<h3>What is the opportunity cost of producing one watch?</h3>

The opportunity cost of producing one watch is the number of clocks that needs to be given up per watch.

This will therefore be the slope of the linear production possibilities curve which can be found as:

= (Y₂ - Y₁) / (X₂ - X₁)

Solving gives:

= (80 - 20) / (20 - 50)

= 60 / -20

= -2 clocks

This means that for every watch produced, there will be 2 clocks that will be foregone to make that watch.

In conclusion, the opportunity cost is 2 clocks.

Find out more on opportunity cost at brainly.com/question/481029.

#SPJ1

4 0
2 years ago
Accounts Receivable has a balance of $5,000​, and the Allowance for Bad Debts has a credit balance of $420. The allowance method
ElenaW [278]

Answer:

Net realizable value of Accounts Receivable is $4,580

Explanation:

Balance in allowance for uncollectible account= Balance before write off - Account written off

=$420 - $140

=$280

Net realizable value of accounts receivable is:

Particular                                                Amount

Accounts Receivable balance               $5000

Less: Account written off                         <u>$140</u>

Balance after write off                             $4860

Less: Allowance for uncollectible          

account from step 1                                  <u>$280</u>

Net realizable value                                <u>$4,580</u>

4 0
3 years ago
"Ginny sells bottled water from a small stand by the beach. On the last day of summer vacation, many people are on the beach, an
konstantin123 [22]

Answer:

Explanation:

Once out of Ginny sight, Alex faces a dilemma: Work very hard (put in all effort) or shirk (put in little effort). If he works hard, he'll sell enough water to generate $90 in earnings (not including his personal cost). If he shirks, he'll only generate $50 in earnings. After the end of the work, he'll split his earnings with Ginny and also get half of what she earns at her stand. In terms of Eric's total utility, it is worse for him to work hard. Close A If Alex works hard, Alex and Sunita together earn $270 ($180 + $90), of which Eric keeps $120. However, he loses $20 worth of utility by working hard. Therefore his net earnings is $100. If he shirks, Eric and Ginny together earn $270 ($200+ $70), of which Eric will keeps $120, while his personal cost is zero. Therefore Alex, individually, is better off when he shirks. A more better way of finding the solution to the problem is to note that from Eric's view, the amount of money he gets from Ginny's sales from the stand does not rely on his own sales.

3 0
3 years ago
Suppose that lenders want to receive a real rate of interest of 5 percent and that they expect inflation to remain steady at 2 p
s344n2d4d5 [400]

Answer:

the nominal interest rate is 7%

Explanation:

The calculation of the nominal interest rate is given below:

As we know that

Nominal interest rate is

= Real interest rate + Inflation rate

So,

The nominal interest rate should be

= 5% + 2%

= 7%

Hence, the nominal interest rate is 7%

The same is to be considered and relevant  

5 0
3 years ago
What is a challenge to reporting to more than one manager in a matrix organization? What might be a benefit?What is a challenge
raketka [301]

Answer:

Matrixed organisations can be more efficient than conventional hierarchical organisations in maximising resource use and delivering job development at a faster rate. They could also be slightly frustrating, noisy and more effective if performed incorrectly.

Potential drawbacks in answering to several executives:

Specific Management goals

Diverse modes of service

Varying political strategies

Related Space Access

Specific timescales of their intentions

Potential benefits of answering to several executives:

Connection to a broader network

Chances to switch to other areas of the company improved

Project  development opportunities to develop organisational skills

Expanded capabilities for the company to see the larger picture

5 0
2 years ago
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