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Svet_ta [14]
3 years ago
15

You are given the following long-run annual rates of return for alternative investment instruments: U.S. Government T-bills 3.10

% Large-cap common stock 11.25 Long-term corporate bonds 5.65 Long-term government bonds 4.65 Small-capitalization common stock 13.25 The annual rate of inflation during this period was 2 percent. Compute the real rate of return on these investment alternatives. Do not round intermediate calculations. Round your answers to two decimal places.
Business
1 answer:
Dvinal [7]3 years ago
5 0

Answer:

The real rate of return is 0.10%

Explanation:

For computing the real rate of return, we need to apply the formula which is shown below:

( 1 + nominal rate) = ( 1 + real rate) × (1 + inflation rate)

So,

The real rate = {(1 + nominal rate) ÷  (1 + inflation rate)} - 1

                     = ((1 + 3.10%) ÷  (1 + 2%)} - 1

                     = (1.031 ÷ 1.02) - 1

                     = 1.0107 - 1

                     = 0.10

The Government T-bills is only the nominal rate so we considered this only

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Answer:

(First Case) Absorption cost income is higher by 14,200 dollars

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(Third Case) they are equal as produciton = sales

Explanation:

the difference arises when production differs with sales.

that's because variable will consider the entire amount of fixed cost as cost of the period while, absorption will capitalizethe fixed cost through inventory. If production matches sales then in both cases the fixed cost are entire expressed in the income statement. If they don't the difference is the difference times unit fixed cost.

(First Case)

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(Second Case)

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(Third Case)

They match thus, no difference arises.

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In 2019, Dan transferred 5-year property to Fleck Corp. in a tax-deferred Section 351 transaction. Fleck took Dan's adjusted bas
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Answer:

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Answer and Explanation:

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(Being closing of expenses accounts are closed)

3. Income Summary $80,000

      To Retained Earning $80,000

(Being profit is recorded)

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