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3 years ago

What happens if the fed sells $5 billion worth of treasury bonds on the open market?

1 answer:

4 0

The Fed sells of reserve bonds to affect the money supply on the open market. Therefore, the fed sells $5 billion worth of T-bonds, then that means they will be taking out a big lump out of your bank put down. In the meantime, the fed sells might pump $5/billion into the financial system by incomplete set aside banking into the grouping and itâ€™s more like $50/billion and the Fed gets the Bonds and the financial system gets the money. Will have to the fed wish to take out cash from the market, it could sell those bonds and take cash out of the economy in trade for bond.

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The following market information was gathered for the corporation. The firm has 1,000 bonds outstanding, each selling for $1,100

Nana76 [90]

Answer:

9.127%

Explanation:

For calculating the WACC we need to do following calculations which are shown below:

value of debt = 1,000 × $1,100 = $1,100,000

cost of debt = 8% × (1 - 0.3) = 4.8%

value of equity = 50,000 shares × $18 = $900,000

value of preferred stock = 5,000 × $40 = $200,000

Now

Market value of firm = $1,100,000 + $900,000 + $200,000 = $2,200,000

The formula is shown below:

= Weightage of debt × cost of debt + (Weightage of common stock) × (cost of common stock) + (Weightage of preferred stock) × (cost of preferred stock)

WACC = ($1,100,000 ÷ $2,200,000) × 4.8% + ($900,000 ÷ $2,200,000) × 14% + ($200,000 ÷ $2,200,000) × 11%

= 9.127%

3 0

3 years ago

A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is a(n)________.

ozzi

Answer:

d. account This answer is correct

Explanation:

There are various types of accounts that are reported in the financial statements. The financial statement comprises of the income statement, balance sheet, statement of stockholder equity and the cash flow statement.

The recording of the increase in the specific asset, liability, revenue, expense, etc is called as an account

Just in net income, the revenue and expense account is reported. The asset, liability, stockholder equity which is reported in the balance sheet. The change in the values of the item is reported in the respective amount

7 0

3 years ago

Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2018: Factory rent $ 42,000

Doss [256]

Answer:

Results are below.

Explanation:

1) Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.

Direct material= Thread + Premium quality cotton material + Buttons

Direct material= 1,000 + 42,000 + 750

Direct material= $43,750

2) Direct labor is production or service labor that is assigned to a specific product, cost center, or work order. 

Direct labor= Wages paid to seamstresses + Wages paid to cutters Direct labor= 75,000 + 50,000

Direct labor= $125,000

3) Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.

Manufacturing overhead= Factory rent + Utilities for factory + Cutting room supervisor's salary + Factory insurance + Depreciation on sewing machines

Manufacturing overhead= 42,000 + 22,000 + 30,000 + 15,000 + 6,000

Manufacturing overhead= $115,000

4) Total manufacturing costs= 43,750 + 125,000 + 115,000

Total manufacturing costs= $283,750

5) Prime cost= direct material + direct labor

Prime cost= 43,750 + 125,000

Prime cost= $168,750

6) Conversion cost= direct labor + MOH

Conversion cost= 125,000 + 115,000

Conversion cost= $240,000

7) Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.

Period costs= Company advertising + Depreciation on salespersons' vehicles + President's salary

Period costs= 18,000 + 25,000 + 75,000

Period costs= $118,000

8 0

3 years ago

A Canadian subsidiary of a U.S. parent firm is instructed to bill an export to the parent in U.S. dollars. The Canadian subsidia

Kaylis [27]

Answer:

10% foreign exchange loss on the U.S. dollar accounts receivable

Explanation:

Based on the information provided within the question it can be said that in this example the Canadian subsidiary will record a 10% foreign exchange loss on the U.S. dollar accounts receivable. That is because as the Canadian dollar has appreciated 10% against the U.S. dollar, it means that it has lost 10% of it's buying power due to its foreign exchange price change, thus resulting in a loss which needs to be recorded.

4 0

3 years ago

Which of the following is essential for a firm to gain a sustained competitive advantage over its competitors?

Marrrta [24]

Answer:

Down Below

Explanation:

The resources must be valuable, rare, imperfectly imitable, and non-substitutable.

6 0

3 years ago