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hoa [83]
3 years ago
12

An investor purchased 100 shares of stock X at \small 6\frac{1}{8} dollars per share and sold them all a year later at 24 dollar

s per share. If the investor paid a 2 percent brokerage fee on both the total purchase price and the total selling price, which of the following is closest to the investor's percent gain on this investment?(A) 92%
(B) 240%
(C) 280%
(D) 300%
(E) 380%
Business
1 answer:
Salsk061 [2.6K]3 years ago
7 0

Answer:

option (C) 280%

Explanation:

Number of shares of stock X purchased = 100

Purchasing cost of share = \$6\frac{1}{8} =\frac{49}{8}

Selling cost of stocks = $24 per share

Brokerage paid = 2%

Now,

The total purchasing cost involved = 100\times\frac{49}{8} + 2% of 100\times\frac{49}{8}

= 612.5 + 0.02 × 612.5

= $624.75

also,

Total income from sales of stocks

= Total selling cost of shares - brokerage paid

= $24 × 100 - 2% of Total selling cost

= $2400 - ( 0.02 × $2400 )

= $2400 - $48

= $2,352

now,

The investor's percent gain on this investment = \frac{\textup{Income-invested amount}}{\textup{Invested amount}}\times100\%

= \frac{\textup{2,352 - 624.75}}{\textup{624.75}}\times100\%

= \frac{\textup{1727.25}}{\textup{624.75}}\times100\%

= 276.47% ≈ 280%

Hence, the correct answer is option (C) 280%

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Calistoga Produce estimates bad debt expense at 0.60% of credit sales. The company reported accounts receivable and allowance fo
liraira [26]

Answer: Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021 is $246.

Explanation: Calistoga Produce applies percentage of credit sales method to estimate its bad debt expense. So 0.60% of $331,000 (credit sales) = $1,986 and the balance in allowance for doubtful accounts is $1,520. The following journals would be recorded to adjust for the estimate:

Debit Bad debt expense                                      $466

Credit Allowance for doubtful accounts           $466

The $466 is the difference between $1,986 and $1,520

Now that the company writes off $1,740 accounts receivable, the following journal entries apply:

Debit Allowance for doubtful account              $1,740

Credit Accounts receivable                                $1,740

In summary, the allowance account movement is as follows:

Opening balance                                                 $1,520

Additional bad debt expense                                 466

Write-off during the year                                     (1,740)

Balance, end of the year                                       $246

6 0
3 years ago
In agriculture, a "bumper crop" refers to a particularly productive harvest. if there is a bumper crop for wheat at the same tim
WINSTONCH [101]
<span>The equilibrium price will go down and equilibrium quantity will be indeterminate.
Bumper crop refers to a situation when a certain type of crop exeprience sudden bump in productivity. If at that exact time more people become allergic to this crop, the crop would be overly stocked in the warehouse and the owner would most likely sell it at lower price.</span>
7 0
3 years ago
A small foundry agrees to pay $220,000 two years from now to a supplier for a given amount of coking coal. The foundry plans to
MaRussiya [10]

Answer:

A) $24,602

Explanation:

We can solve this question by finding the periodic deposits needed by using the formula:

FV=PMT*\frac{(1+i)^n-1}{i}

where:

FV= future value   = $220,000

PMT = periodic deposits required = ???

i = effective  interest rate per period = 0.0331

n= number of deposits = 8

However, since the interest is compounded monthly, let's also  calculate the effective interest rate

Effective interest rate = (1+\frac{r}{m}) ^m-1

where; r = 12.5% = 0.125

(1+\frac{0.125}{12})^{12} -1

= 0.1324

Interest rate per period = \frac{0.1324}{4}

= 0.0331

Then;

220,000=PMT*\frac{(1+0.033)^8-1}{0.033}

220,000 = PMT × 8.986

PMT = \frac{220,000}{8.986}

PMT = $ 24,482.5

Since A) $24,602 is closer to $ 24,482.5

Therefore,  $ $24,602  must be deposited every three months

3 0
3 years ago
Each of the following items must be considered in preparing a statement of cash flows. Indicate where each item is to be reporte
Mashcka [7]

Answer:

(a) Operating activity

(b) Financing activity

(c) Operating activity

(d) Investing activity

Explanation:

Basically there are three types of activities:

1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

2. Investing activities: It records those activities which include purchase and sale of the fixed assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.  

So,

(a) Increase in accounts receivable come under the operating activities, and this is to be in a negative amount

(b) Issue of preference shares comes under financing activity, and this is added while computing the financing activities

(c) The depreciation expenses are added in the net income whereas the bond premium amortization is to be deducted from the net income. These both items have come under operating activities

(d) An increase in land value comes under the investing activity.

4 0
3 years ago
EMC Corporation has never paid a dividend. Its current free cash flow of $490,000 is expected to grow at a constant rate of 4.4%
disa [49]

Answer:

$5,697,674

Explanation:

Dividend Valuation method is used to value the operations of a company based on the dividend paid, its growth rate and rate of return/WACC. The price is calculated by calculating present value of future dividend payment.

Free cash flow is the residual cash flow of operation after paying the capital expenditure from net income of the company. It represent the cash from the operations.

Formula to calculate the value of operation

Value of Operations = FCF / ( WACC - growth rate )

Value of Operations = $490,000 / ( 13% - 4.4% )

Value of Operations = $5,697,674

7 0
3 years ago
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