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yulyashka [42]
3 years ago
9

Crabby Shores stock is expected to return 15.7 percent in a booming economy, 9.8 percent in a normal economy, and 2.3 percent in

a recession. The probabilities of an economic boom, normal state, or recession are 15 percent, 73 percent, and 12 percent, respectively. What is the expected rate of return on this stock?
Business
1 answer:
VLD [36.1K]3 years ago
4 0

Answer:

The expected return on the stock is 9.785%

Explanation:

The expected rate of return on a stock is the return of the stock expected in different scenarios multiplied by the probability that those scenarios will occur. The expected return can be calculated as follows,

r = rA * pA + rB * pB + ... + rN * pN

  • Where,
  • rA, rB to rN expects return under different scenarios
  • pA, pB to pN represents the probabilities of each scenario

Thus,

r = 0.157 * 0.15  +  0.098 * 0.73  +  0.023 * 0.12  

r = 0.09785 or 9.785

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A company is considering two capital investments. Each requires an initial investment of $15,000 and has a 4 year useful life. I
yaroslaw [1]

Answer:

3 years

Explanation:

The computation of the payback period is shown below:

Payback period = Initial investment ÷ Net cash flow

where,  

Initial investment is $15,000

And, the net cash flow would be

= Year 1 + year 2 + year 3 + year 4

= $5,000 + $5,000 + $5,000 + $5,000

= $20,000

As we see that the net cash flow is recovered in three years that means net cash flows and the initial investment are equal

So,

Payback period would be

= $15,000 ÷ $15,000

= 3 years

7 0
2 years ago
What benefit does a 401(k) plan provide over an IRA?
svetoff [14.1K]
Hello,

Your brainliest answer would be:

A benefit of 401k It is Less of investment risk.

Plz mark me brainliest!

Hope this helps!
5 0
3 years ago
Read 2 more answers
What are the most important information needs that a governmental annual report should fulfill for each of the following: ______
vladimir2022 [97]

Answer:

1. Compensation for employment services that they offer.

2. Disbursement in sufficient proportions of the available funds.

3. How the government have used their tax money.

4. The ability and capacity of the government to honor debts.

Explanation:

Each stakeholder to the governmental annual report hold a different need compared to the other. Therefore it is important to pay attention to whom the financial statements speaks to. The above shows the different needs of the stakeholders to  governmental annual report.

8 0
3 years ago
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following tr
DanielleElmas [232]

Answer:

Trial Income Statement:

Service revenue         $17,000

Rent expense            ($3,500)

Insurance expense      ($350)

<u>Wages expense       ($10,500)</u>

Net income                $2,650

*We need to adjust other expenses like supplies or utilities. I assumed the salaries paid were for a 10 days period since no one pays salaries in advance.

Trial Balance Sheet

Assets:

Cash $62,200

Supplies $1,000

Prepaid insurance $3,850

<u>Equipment $10,000           </u>

Total Assets $77,050

Liabilities and Equity:

Accounts payable $8,000

Wages payable $7,000

Common Stock $60,000

<u>Retained earnings $2,050               </u>

Total Liabilities and Equity $77,050

Explanation:

July 1

Dr Cash 60,000

    Cr Common stock 60,000 (6,000 stocks $10 par value)

July 3

<u>Rent expense 3,500</u>

    Cr Cash 3,500

July 5

Dr Prepaid insurance 4,200

    Cr Cash 4,200

Adjusting entry July 31

Dr Insurance expense 350

    Cr Prepaid insurance 350

July 7

Dr Supplies 1,000

    Cr Accounts payable 1,000

July 10

Dr Wages expense 3,500

    Cr Cash 3,500

Adjusting entry July 31

Dr Wages expense 7,000 ($3,500 x 2 10 day periods)

    Cr Wages payable 7,000

July 14

Dr Equipment 10,000

    Cr Cash 2,500

    Cr Accounts payable 7,500

July 15

Dr Cash 8,000

    Cr Service revenue 8,000

July 19

Dr Accounts payable 500

    Cr Cash 500

July 31

Dr Cash 9,000

    Cr Service revenue 9,000

Dr Retained earnings 600

    Cr Dividends payable 600

Dr Dividends payable 600

    Cr Cash 600

6 0
2 years ago
Which of the following are criteria for determining whether to record an asset as a fixed asset? a.must be short-lived and tangi
Brut [27]

Answer:

The correct answer is letter "D": must be long-lived and used by the company in its normal operations.

Explanation:

Fixed assets are tangible resources used by a corporation to produce profits. To qualify as a fixed asset, the item can not be consumed or sold in less than one year and be part of the daily operations of the business. Fixed assets are listed on the balance sheet of the company and are subject to depreciation.

Examples of fixed assets include <em>buildings, factories, leasehold improvements, computers, electronic hardware, furniture, automobiles, </em>and <em>construction equipment.</em>

5 0
3 years ago
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