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alina1380 [7]
3 years ago
15

Consider the following two investment alternatives: First, a risky portfolio that pays a 15% rate of return with a probability o

f 40% or a 5% rate of return with a probability of 60%. Second, a Treasury bill that pays 6%. The risk premium on the risky investment is _________.
a. 9%
b. 3%
c. 1%
d. 6%
Business
1 answer:
Nimfa-mama [501]3 years ago
7 0

Answer:

b. 3%

Explanation:

The computation is shown below:

Risk premium = Expected rate of return - risk free rate of return

where,

Expected rate of return is

= Rate of return × probability + rate of return × probability

= 15% × 40% + 5% × 60%

= 6% + 3%

= 9%

And, the risk free rate of return is 6%

So, the risk premium on the risky investment is

= 9% - 6%

= 3%

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Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $589,
iren [92.7K]

Answer:

Estimated Allowance for Uncollectible Accounts  $ 17950.

Explanation:

Pearl E. White Orthodontist

Schedule of Accounts Receivable by Age

December 31, 2021

Age Group                  Amount           Estimated        Uncollectible

                                    Receivable        Percent

Not yet due                $ 40,000                 4%              1600

0-90 days past due     16,000                   20%            3200

91-180 days past due     11,000                  25%          2750

More than 180 days past due 13,000        80%           10400

Total                           $ 80,000                                  17950

Estimated Allowance for Uncollectible Accounts  $ 17950.

The above schedule shows the accounts receivable assigned to one of the four classes based on its days past due . The amounts of each class are multiplied by the estimated percent of the uncollectibles accounts. The total amount in the Uncollectible is the estimated balance for the Allowance for Uncollectible Accounts  $ 17950.

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Answer:

marketing is the business functions involved in developing and selling products that meet customer's need.

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2 years ago
Jordan enterprises is considering a capital expenditure that requires an initial investment of $42,000 and returns after-tax cas
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Probabaly (A) It seems the most reasonable.

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3 years ago
Equipment costing $20,000 with a salvage value of $4,000 and an estimated life of 8 years has been depreciated using the straigh
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Answer:

C. $3,000

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It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

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