Answer:
Effect on income= $115,000 decrease
Explanation:
Giving the following information:
Fixed costs= $45,000
Number of units= 20,000
Unitary contribution margin= $8
<u>To calculate the effect on income, we need to use the following formula:</u>
Effect on income= decrease in fixed costs - decrease in contribution margin
Effect on income= 45,000 - 20,000*8
Effect on income= $115,000 decrease
Answer:
a. Increase the direct costs of the state's debt.
Explanation:
When a bond's rating is downgraded is a signal to the investors that investing in the bond now is riskier than it was prior to the rating downgrade, hence, a perceived higher risk using the risk/return relationship means that the bond issue would have to offer a higher return to entice the investors to invest in the bonds.
As a result, the higher required rate of return translates into a higher direct cost of the state's debt since their interest rate offered has increased
Answer:
The answer is option C. She may immediately sell the bonds but it is unclear how much money they will sell for.
Explanation:
She may immediately sell the bonds but it is unclear how much money they will sell for.
Investors who hold onto their bonds until maturity are assured of to receive the face value of the bond. In our case, if Andrea would have chosen to hold her $5,000 bond investment for 10 years, she would have been assured the bonds face value, however since she prefers to use the cash to work abroad, she can sell the bonds immediately.
Selling a bond before it's maturity date can either be beneficial or detrimental. This depends on the value of the bond at the time of sale. If at the time of sale the bond would have gained value, then the bond will sell at a higher price than when it was bought. On the other hand, if the bond at the time of sale has lost value, then the bond will sell at a lower price than the price which it was bought.
In our case, the best option for Andrea would be to sell the bonds immediately, since she really needs the cash. If it happens that at the point at which she sells the bonds they will have gained value, then she will have more than $5,000 cash, however, if at the point she decides to sell the bonds they will have lost value, then she will have less than $5,000 depending on how much value was lost from the time she bought the bonds and the time she sold the bonds.
Answer:
B. attribute
Explanation:
Tesla used the attribute base to position itself in the market
Answer:
Let X be the amount invested in stock A
Let 1-X be the amount invested in stock B
Expected rate = (Required rate of X* X) + (Required ratebof Y * (1-X))
0.146 = (0.128 * X) + (0.078 * (1-X))
0.146 = 0.128X + 0.078 - 0.078X
0.146 - 0.078 = 0.128X - 0.078X
X = 0.068/0.05
X = 1.36
Amount to be invested in Stick X = $130,000 * 1.36
= $176,000
Amount to be invested in Stock Y = (1-X) * Available amount
= (1-1.36) * $130,000
= $46,800
Therefore, the amount to be invested in Stick Y = -$46,800
Calculation of the portfolio beta
bp = w1b1 + w2b2 + ........ + wnbn
bp = (1.36*1.3) + ((-0.36) * 1.05)
bp = 1.768 - 0.378
bp = 1.29
Therefore, the portfolio beta is 1.39
