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MrRa [10]
3 years ago
15

An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.2 of a $15,000 l

oss, probability 0.15 of a $20,000 loss, probability 0.05 of a $40,000 profit, and probability 0.6 of breaking even (a profit of $0). What is the expected value of the profit? Group of answer choices
Business
1 answer:
lozanna [386]3 years ago
8 0

Answer:

$21,000

Explanation:

initial investment $25,000

we need to determine the expected value of every possibility:

  • $15,000 loss ⇒ 20% x $10,000 = $2,000
  • $29,000 loss ⇒ 15% x $5,000 = $750
  • $40,000 gain ⇒ 5% x $65,000 = $3,250
  • break even ⇒ 60% x $25,000 = $15,000

total expected value = $21,000

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Mademuasel [1]

Answer:

$10 profit

Explanation:

In this question, we are asked to calculate the profit or loss to a short position.

Firstly, we identify that the spot price of market index is $900.

Now, a three months forward contract equals a value of $930.

Raising the index to $920 at the expiry date is obviously a profit to the short position.

To calculate the profit here, we simply subtract the index at expiry date from the three months forward contract.

Mathematically, this is equal to $930-$920 = $10 profit

8 0
3 years ago
If a company pays an energy consultant just for a set period to complete a
Cloud [144]
This is true
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8 0
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Sam, alfredo, and juan want to start a small u.S. Business. Juan will fund the venture but wants to limit his liability to his i
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Answer: These individuals must enter into a <u>limited partnership.</u>

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The limited partner contributes funds, but in not involved in the management of the partnership.

As a result he is not personally liable for the debts of the partnership.

However, he is entitled to a dividend by virtue of his investment. The nature of this dividend is defined and the terms are spelled out clearly in the partnership agreement.

7 0
2 years ago
Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
sweet-ann [11.9K]

Answer:

D. $53,000.

Explanation:

The computation of the ending cash balance is shown below:

Beginning cash balance $95,000

Add: Receipts  

Cash sales  $418,000

Total cash receipts (a) $513,000

Deduct: Payments:  

Cash payment for purchases -$273,000

 Cash payment for salaries -$96,000

Other cash expenses -$58,000

Repayment of bank loan -$33,000

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6 0
2 years ago
At December 31, 2021 and 2020, P Co. had 58,000 shares of common stock and 5,800 shares of 5%, $100 par value cumulative preferr
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Answer:

$10.19 per share

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With regards to the above, the basic earnings per common share is seen below;

Preferred dividend = Shares × Par value × Shares percentage

= 5,800 × $100 × 5%

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So, basic earning per share = (Net income - Preferred dividend) ÷ Common shares

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