Explanation:
The journal entry to record the re-issuance of the stock is shown below:
Cash A/c Dr $240,000 (20,000 shares × $12)
Retained earnings A/c Dr $80,000
To Treasury stock $320,000
(Being the re-issuance of the stock is recorded)
The computation is shown below:
For treasury stock
= 20,000 shares × ($16 per share - $12 per share)
= $80,000
So as we can see the retained earnings is decreased by $80,000
Based on the scenario analysis on stocks and bonds, we know the following:
- Treasury bonds will provide a higher return in a recession than in a boom.
- The expected return of Bonds is 9.8% and that of stocks is 11.6%.
- The standard deviation of Bonds is 9.24% and that of stock is 11.76%.
<h3>What does the scenario analysis on Bonds and Stocks show?</h3>
In a recession, Bond returns will be 15%. This is much higher than Bond returns in a boom of only 5%.
The expected return on bonds will be:
= ∑(Probability of Scenario x Returns in scenario)
= (0.30 x 15%) + (0.60 x 8%) + (0.10 x 5%)
= 9.8%
The expected return on stocks will be:
= (0.30 x -6%) + (0.60 x 18%) + (0.10 x 26%)
= 11.6%
Using a spreadsheet, you can input the expected returns of the stocks and the bonds to find the standard deviation to be 9.24% and 11.76%, respectively.
Find out more on stock expected returns at brainly.com/question/18724022.
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B) Added value
Explanation:
Added value - It is an improvement to the product or service making it more worthwhile.
Competitive advantage makes the product or service more desirable than other competitors.
In this scenario, there is no competition of the services as yet, but definitely has an added value by improving the services.
<span>A customer expects a support technician to be knowledgeable, patient, and friendly. The support technician must be knowledgeable to the degree that they solve the issue at hand, but can also give basic information to a customer.</span>
