On an aggregate demand and aggregate supply graph, the stagflation of the 1970s can be represented as a

The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The fini

ale4655 [162]

Answer:

Instructions are below.

Explanation:

Giving the following information:

The ending inventory of finished goods for each quarter should equal 20% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,600 units.

<u>We weren't provided with enough information to solve the problem. But, I will leave the formula and a small example to guide an answer.</u>

<u></u>

Purchases= sales + desired ending inventory - beginning inventory

For example:

Sales 2nd Quarter= 27,000 units

Sales 3rd Quarter= 45,000 units

Production budget (in units):

Sales= 27,000

Desired ending inventory= (45,000*0.20)= 9,000

Beginning inventory= (3,600)

Total= 32,400 units

5 0

4 years ago

Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous problem. The initial margi

Inessa [10]

Answer:

A. 38%

B. NO

C. -150%

Explanation:

A.Calculation for What is the remaining margin in the account

Remaining margin=(1,000 shares*$40 per share*50%) /[(1,000 shares*$50 per share )+ ($2 per share*1,000)]

Remaining margin=$20,000/($50,000+$2,000)

Remaining margin=$20,000/$52,000

Remaining margin=0.38*100

Remaining margin=38%

Therefore the remaining margin in the account will be 38%

B. In a situation where the maintenance margin requirement is 30 percent, Old Economy will NOT receive a margin call reason been that based on the above Calculation the margin is 38% which means that it is abovethe maintenance margin requirement of 30%.

C. Calculation for What is the rate of return on the investment

Rate of return=[(1,000 shares*$40 per share)-(1,000 shares*$50 per share )] -(1,000 shares*$40 per share*50%) ÷(1,000 shares*$40 per share*50%)

Rate of return=($40,000-$50,000) -$20,000 ÷ $20,000

Rate of return = (-$10,000 -$20,000)/$20,000

Rate of return =-$30,000/$20,000

Rate of return = -1.5*100

Rate of return = -150%

Therefore rate of return on the investment will be -150%

3 0

3 years ago

You deposit? $200 in a savings account on january? 1, and the bank pays you interest of? $10 at the end of the year. during the?

marysya [2.9K]

12$ should be the answer

4 0

3 years ago

Following her 18th birthday, Madison began investing $24 at the end of each week in an account earning 7% per year compounded we

Deffense [45]

Answer:

The answer is $26.80.

Explanation:

*Some inputs for the calculation as below:

One year period has 52 weeks

=> At the time she turns 68, she will have: (68-18) x 52 = 2,600 equal weekly cash flows; At the time she turns 47, she will have: (47-18) x 52 = 1,508 equal weekly cash flows.

* Present value of the investment plan lasting until she turns 68:

[ 24 / (7%:52) ] x [ 1 - (1+ (7%/52)^(-2,600) ] = $17,289.

* To have the same retirement nest egg at age 68, the present value of the investment plan lasting until she turns 47 should be equal to $17,289. Denote x is the weekly investment under the shorter investment scenario, we have:

[x / (7%:52) ] x [ 1 - (1+ (7%/52)^(-1,508) ] = $17,289 <=> x = $26.80.

4 0

3 years ago

If Wild Widgets, Inc., were an all-equity company, it would have a beta of 0.9. The company has a target debt-equity ratio of .4

Veronika [31]

Answer:

a. 6.5%

b. 13.06%

c. 10.91%

Explanation:

a.

Cost of debt of a bond is yield to maturity. Yield to maturity is the rate of return that a investor actually receives or a borrows actually pays on a bond. It is long term return or payment which is expressed in annual term.

Formula for yield to maturity is as follow

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

By placing values in the formula

Assuming the bond face value is $1,000

Yield to maturity = [ (1000x7.2) + ( 1,000 - $1,090 ) / 20 ] / [ ( 1,000 + $1,090 ) / 2 ]

Yield to maturity = [ $72 + ( 1,000 - $1,090 ) / 20 ] / $1,045

Yield to maturity = [ $72 - $4.5 ] / $1,045

Yield to maturity = $67.5 / $1,045

Yield to maturity = 6.5%

So, the cost of Debt is 6.5%

b.

As 0.9 is the unlevered beta, We need Levered beta due to restructuring of capital.

Beta Levered = Beta Unlevered x ( 1 + ( 1 - tax rate ) x Debt / Equity)

Beta Levered = 0.9 x ( 1 + ( 1 - 0.35 ) x 0.4 )

Beta Levered = 1.134

Cost of equity can be calculated using CAPM

CAPM calculated the expected return on an equity investment based on the risk free rate, market premium and risk beta of the investment.

Formula for CAPM is as follow

Expected return = Risk free Rate + Beta ( Market premium)

As we know the Risk premium is the difference of market return and risk free rate.

Expected return = Risk free Rate + Beta ( Market Return - Risk free Rate )

Ra = Rf + β ( Rm - Rf )

Ra = 4.1% + 1.134 ( 12% - 4.1% )

Ra = 13.06%

Cost of Equity is 13.06%

c.

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity )+ ( Cost of debt ( 1- t) x Weightage of debt )

Placing the values in formula

If the debt to equity 0.4 the equity value should be 1 and total capital is 1.4 ( 1 + 0.4 )

WACC = ( 13.06% x 1 / 1.4 )+ ( 6.5% ( 1- 0.35) x 0.4 / 1.4 ) = 9.71% + 1.2% = 10.91%

WACC is 10.91%

4 0

3 years ago