Model 25% with a 10×10 grid.

Identify at least one type of firm that might exhibit low correlations of returns with the overall stock market? explain why the

svlad2 [7]

<span>One firm that is historically low and deals with negatively correlated stock markets is Gold Extraction Companies. They are have very low correction with overall stock markets. The basic reason for this low correlation is that, as the stock market become bearish, investor sentiment becomes weak, due to which most of the investors withdraw their money from stock market. Now once investor has withdrawn the money from stock market , they search on safe investments which will provide them good reruns, Gold is one of the investment which is relatively safe and provide high returns. Thus withdrawn money from the share market is invested in gold by investors. Thus Gold prices and companies related to extraction of gold have very less correlation to the gold.</span>

6 0

3 years ago

Month Maintenance Machine Health Number of Shipping Units

8_murik_8 [283]

Answer:

1. Variable cost = Shipping costs

Fixed cost = Health Insurance

Mixed cost = Maintenance costs

Shipping costs are variable because a unit shipped costs $3.60. The total shipping cost for each month varies according to the units shipped in the month.

Health Insurance costs are fixed as there is no change in cost notwithstanding the number of employees in each month. The total health insurance cost remains the same every month.

Maintenance costs are mixed for each month, as there is a fixed element and a variable element.

2. Cost function for each cost:

Maintenance = $4,200 + $2.10 per machine hour

Health Insurance = $8,600

Shipping cost = $3.60 per unit

3. Cost function = $12,800 + $2.1m + $3.6s

where m = machine hours

and s = units shipped

4. The total operating cost for the month

= $46,040

Explanation:

a) Data and Calculations:

Month Maintenance Machine Health Number of Shipping Units

costs Hours Insurance Employees Costs Shipped

January 4500 165 8600 68 25778 7160

February 4452 120 8600 75 29664 8240

March 4600 230 8600 92 28674 7965

April 4850 318 8600 105 23058 8405

May 5166 460 8600 89 21294 5915

June 4760 280 8600 87 33282 9245

July 4910 340 8600 93 31428 8730

August 4960 360 8600 88 30924 8415

September 5070 420 8600 95 25110 6975

October 5250 495 8600 102 25866 7185

November 5271 510 8600 97 20124 5590

December 4760 275 8600 94 34596 9610

Cost Function for each cost:

Maintenance cost:

Machine Cost

Hours

November 510 5271

February 120 4452

Difference 390 819

Variable cost = $2.10 (819/390)

Fixed cost = $4,200 ($5,271 - ($2.10*510))

Health Insurance:

Fixed cost = $8,600

Shipping cost:

Variable cost = $3.60 per unit

Cost function = $4,200 + $2.10m + $8,600 + $3.60s

= $12,800 + $2.1m + $3.6s

February cost = $12,800 + $2.1(120) + $3.6(8240)

= $12,800 + $252 + $29,664

= $42,716

IF:

Machine hours = 400

Employees = 80

Shipped units = 9,000

The total operating cost for the month will be:

Cost function = $12,800 + $2.1m + $3.6s

= $12,800 + ($2.1 * 400) + ($3.6 * 9,000)

= $12,800 + $840 + $32,400

= $46,040

4 0

3 years ago

T Company expects to incur the following per unit costs for 1,000 units of production: Direct materials of 4 pounds per unit at

Vladimir [108]

Answer:

Total overhead = = $7,500

so here correct option is E. $7,500

Explanation:

given data

production = 1,000 units

direct labor = ¼ hour @ $24 per hour

variable overhead = 75 % of direct labor

fixed overhead = $3,000

to find out

total amount of overhead

solution

we first find Direct labor that is

Direct labor = ¼ × 24

Direct labor = $6

so

Total overhead will be here

Total overhead = Variable overhead + Fixed overhead .................1

now put here value we get

Total overhead = ($6 × 75% ) × 1,000 + $3,000

so

Total overhead = = $7,500

so here correct option is E. $7,500

8 0

3 years ago

Ramble On Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.37, and a dividend payout ratio of

Delvig [45]

Answer: 16.55%

Explanation:

Profit margin is the amount of earnings that a company has left when every expenses and costs have been deducted.

From the information given, firstly, we calculate the return on equity. This will be:

= Growth rate /(1 + Growth rate) × Retention ratio

= 8% / (1 + 8%) × 46%

= 0.08/(1 + 0.08) × 0.46

= 0.08/1.08 × 0.46

= 0.08/0.4968

= 0.1610

= 16.10%

Return on equity, ROE = 16.10%

We then calculate the profit margin. This will be:

= ROE / Asset turnover × Equity Multiplier

where,

Equity Multiplier = 1 + debt-equity ratio

= 1 + 0.37 = 1.37

Profit margin = ROE / Asset turnover × Equity Multiplier

= 16.10% / {(1/1.41) × 1.37}

= 16.10% / 0.71 × 1.37

= 0.1610 / 0.9727

= 0.1655

Profit margin = 16.55%

6 0

3 years ago

Patricia is the owner of a floral shop. a successful global candle company approached her about selling its products in her shop

Tema [17]

What could mean above is that the events that is happening to Patricia's life is an opportunity. It is an opportunity for it enables a person to do the things he or she wants with the circumstances that has been given to him or her. It could be described in the scenario above as a global company approach her into selling her products to their shop in which it could make her reach the goal that she has always wanted.

5 0

3 years ago