Answer: $1.43
Explanation:
To solve this, we would use the put call parity. We then calculate the value of the out which will be:
= $7.14 + $15/(1 + 5%) - $20
= $7.14 + $15/(1 + .05) - $20
= $7.14 + $15/(1.05) - $20
= $7.14 + $14.29 - $20
= $1.43
The price of an equivalent put option is $1.43
Answer:
The correct answer is A. It uses separate predetermined overhead allocation rates for each activity.
Explanation:
he ABC cost model allocates and distributes indirect costs according to the activities carried out in the process of manufacturing the product or service, identifying the origin of the cost with the necessary activity, not only for production but also for distribution and sale; The activity is understood as the set of actions that aims to incorporate added value to the product through the manufacturing process. Complementing the definition of activity, it should be mentioned that the ABC Model is based on the fact that products and services consume activities, and these in turn are the ones that generate costs.
A
Explanation:
Because the judgement of executives does not adequately factor into a mathematical equation. it's like a judgement call only whereas the others can be used in an equation manner
Answer:
Multiple IRRs:
Said another way, Multiple IRRs occur when a project has more than one <em>internal rate of return.</em> The problem arises where a project has non-normal cash flow (non-conventional cash flow pattern).
Internal rate of return (IRR) is one of the most commonly used capital budgeting tools. Investors make decisions by comparing the IRR of the project under consideration with the <em>hurdle rate</em>. If the IRR is greater than the hurdle rate, the project is accepted, otherwise it is rejected. When there are more than two IRRs, it is not exactly clear which IRR to compare with the hurdle rate.
Hurdle rate is the minimum required rate of return which businesses use as a benchmark to decide whether to invest in a project or not.
<em>So a typical situation which can generate negative cashflows which can in turn lead to multiple IRRs towards the end of the project is where the conditions of investment become adverse towards the end of the project.</em>
Imagine that toward the end of the lifecycle of a project, a forecasted increase external costs such as Interest Rate, influenced by government policies translates to an erosion of the bottom line generated by the business in that year.
Period 0 1 3 3 4 5
Unconventional cash flows ($)-19,000 16,000 16,000 6,000 6,000 -52,000
The series is non-conventional cash-flow pattern, which has two sign changes. This is the range in which the net present value of the non-conventional cash flow series is positive. The multiple IRR problem poses a series problem to analysts because the decision is not obvious.
Cheers!
Answer:
option (C) $1,201,300
Explanation:
Data provided in the question:
Balance in retained earnings = $492,000
Balance in Common Stock = $605,000
Net income earned = $92,000
Dividend paid = $15,200
Common stocks issued = $27,500
Now,
Common Stock
= Balance in Common Stock + Common stocks issued
= $605,000 + $27,500
= $632,500
Retained Earnings
= Balance in retained earnings + Net income earned - Dividend paid
= $492,000 + $92,000 - $15,200
= $568,800
Total Stock Holders Equity on Dec 31,2012
= Common Stock + Retained Earnings
= $632,500 + $568,800
= $1,201,300
Hence,
The answer is option (C) $1,201,300
