Ask question

Ask question

All categories

sergij07 [2.7K]

3 years ago

14

The beta of elsenore, inc., stock is 1.6, whereas the risk-free rate of return is 8 percent. if the expected return on the marke

t is 15 percent, then what should investors expect as a return on elsenore

1 answer:

Jlenok [28]3 years ago

3 0

As per the CAPM, the investors of elsenore should expect a return of = rf + beta*(rm-rf)

The investors of elsenore should expect a return of = 8+1.6*(15-8) =19.2%

You might be interested in

Novak’s Market recorded the following events involving a recent purchase of inventory: Received goods for $112000, terms 2/11, n

Arte-miy333 [17]

Answer:

Option (C) is correct

Explanation:

The payment is made during the discount period of 11 days so the 2% discount rate would be applicable.

Goods purchased = $112,000

Goods returned = $2,200

Discount = (Goods purchased - goods returned) × 2%

= ($112,000 - $2,200) × 2%

= $2,196

Net purchase = Goods purchased - returned - Discount

= $112,000 - $2,200 - $2,196

= $107,604

Total inventory cost = Net purchase + Freight cost

= $107,604 + $400

= $108,004

Therefore, company’s inventory increased by $108,004.

5 0

3 years ago

JacksonJackson Bank lends JabbourJabbour Clothing Company $125 comma 000125,000 on September 1. JabbourJabbour signs a $125 co

lara31 [8.8K]

Answer:

Explanation:

The journal entry is shown below:

Interest expense A/c Dr $3,000

To Interest payable A/c $3,000

(Being interest is recorded)

The computation of the interest expense is shown below:

= Principal × rate of interest × number of months ÷ total number of months in a year

= $125,000 × 6% × (4 months ÷ 12 months)

= $2,500

The four-month is calculated from the September 1 to December 31

4 0

3 years ago

Explain the link between scarcity and opportunity cost.

Helga [31]

Answer:

Resources are limited in supply(scarcity) while wants are unlimited thus one has to make a choice to satisfy a need.Some choices are forgone(opportunity cost)

5 0

3 years ago

An organization with an external strategic focus and a high degree of environmental turbulence calls for a(n) ____ culture.

Yuliya22 [10]

Answer:

C. adaptive

Explanation:

An adaptive culture is the culture that enables the company to adapt the changes in a quickly and in an effective manner with respect to the external pressures

In the given question, it is mentioned that the organization having an focus i.e. external strategic also have a high degree of an environmental calls

So this represent the adaptive culture

8 0

3 years ago

Read 2 more answers

Howard Enterprises, which has three departments, recently reported the following results: A B C Sales revenue $ 12,000 $ 48,000

almond37 [142]

Answer:

<em>Department C should be closed</em>

Explanation:

To determine whether or not it will be profitable to drop a loss making department, we compare the savings in fixed cost to the lost contribution from the division.

For Howard Enterprises, the department with a negative contribution should be closed otherwise its operation would reduce the overall profit by the amount of the negative contribution.

So lets work out the contribution for each department by adding back the apportioned fixed cost. See table below

A B C

$ $ $ Total

Sales Revenue 12,000 48,000 40,000 100,000

Operating cost 11,400 59,800 50,500

Operating income 600 (11,800) (10,500)

*Add back apportioned fixed cost<u> 3,000 12,000 10,000</u>

Contribution 3,600 200 (500)

*Apportioned fixed cost

A- 12,000/100,000× 25,000 = 3,000

B- 48,000/100000 × 25,000 = 12,000

C- 40,000/100,00×25,000 = 10,000

From the above analysis, Department C generates a negative contribution.<em> It implies that it can barely cover its direct cost and so will deplete the total profit by its negative contribution. Hence, it should be closed</em>

<em>Department C should be closed</em>

7 0

3 years ago