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2 years ago

Suppose you observe the following situation:

Business

1 answer:

Finger [1]2 years ago

3 0

Answer:

a. The expected return on the market is 10.89%

b. The risk-free rate is 1.52%

Explanation:

In order to calcuate the expected return on the market and the he risk-free rate we would have to use the following formulas:

Expected return=risk-free rate +Beta*(market rate- risk-free rate )

13.23=Rf+1.25*(Rm-Rf)

13.23=1.25Rm-0.25Rf

Rm=(13.23+0.25Rf)/1.25

To calculate the risk free rate, we use the following:

9.67=Rf+0.87*(Rm-Rf)

9.67=0.13Rf+0.87Rm

9.67=0.13Rf+0.87*(13.23+0.25Rf)/1.25

9.67=0.13Rf+9.20808+0.174Rf

Rf=(9.67-9.20808)/(0.13+0.174)

=1.52%(Approx)=risk free rate

Rm=(13.23+0.25Rf)/1.25

=10.89%(Approx)=market rate

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Holliday Company's inventory records show the following data:

Cerrena [4.2K]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Inventory:

January 1: 5,000 units $9.00

Purchases:

June 18: 4,500 units $8.00

November 8: 3,000 units $7.00

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method.

Units sold= 10,500

FIFO:

COGS= 5,000*9 + 4,500*8 + 1,000*7= 88,000

Sales= 12*10,500= 126,000

COGS= (88,000)

Gross profit= 38,000

Tax= 38,000*0.2= (7,600)

Net operating income= 30,400

LIFO:

COGS= 3,000*7 + 4,500*8 + 3,000*9= 84,000

Sales= 12*10,500= 126,000

COGS= (84,000)

Gross profit= 42,000

Tax= 42,000*0.2= (8,400)

Net operating income= 33,600

Tax difference= LIFO - FIFO= 8400 - 7600= $800

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3 years ago

What will happen when I link two text boxes? When I click on the box, it will take me to a Web site. When the first box is full,

andreev551 [17]

It would be easier to expand your first text box if you don't want to take the risk of lumping everything together. Move your work to one text box and expand it so it all fits.

4 0

2 years ago

Read 2 more answers

Have you ever been disciplined for or the subject of an administrative order relating to conduct or practices involving any aspe

crimeas [40]

Answer:

1. Does it mean if I have been taught any financial information?

This question wants to know if you have been DISCIPLINED, PUNISHED OR PENALIZED for any finance-related fraud

Explanation:

Have you ever been disciplined for or the subject of an administrative order relating to conduct or practices involving any aspect of the financial services, insurance, securities or real estate industries or any other licensed industry or profession?

1. Does it mean if I have been taught any financial information?

This question wants to know if you have been DISCIPLINED, PUNISHED OR PENALIZED for any finance-related fraud

2. I have worked as a teller. then do I have to say yes??

YES, but what they want to know is ''while you were a teller did you receive any query for fraud'' or have you been sanctioned for acting wrongly because you wanted financial gain? Did you change records to show an improved picture?

3. Is this question a positive question or negative?

This question is positive because it shows you are seeking for an opportunity for work or travel.

6 0

3 years ago

Read 2 more answers

After deciding to acquire a new car, you realize you can either lease the car or purchase it with a three-year loan. The car you

muminat

Answer:

a. $15,369.28

b. $16,332.28

c. $19,347.60

Explanation:

a. What is the present value of purchasing the car?

PV of resale = SP ÷ (1 + r)^n ................................................. (1)

Where SP = Resales proceed = $20,500

r = discount rate = 6% annually = 0.06 annually = (0.06 ÷ 12) monthly = 0.005 monthly

n = number of periods = 3 years = 3 × 12 = 36 months

Substituting into equation (1), we have:

PV of resale = $20,500 ÷ (1 + 0.005)^36 = $17,130.7208354753

Net PV = Purchase price - PV of resale

= $32,500 - $17,130.7208354753

Net PV = $15,369.28

Therefore, the present value of purchasing the car $15,369.28.

b. What is the present value of leasing the car?

PV of future period payment can be calculated using the following formula:

PV of monthly payment = M × 1 - (1 + r)^-n ÷ r .......................................... (2)

Where,

M = monthly payment = $494

r = discount rate = 6% annually = 0.06 annually = (0.06 ÷ 12) monthly = 0.005 monthly

n = number of periods = 3 years = 3 × 12 = 36 months

Substituting into equation (2), we have:

PV of monthly payment = $494 × {[1 - (1 + 0.005)^-36] ÷ 0.005}

PV of monthly payment = $16,238.2820221969

PV of leasing the car = Today's payment + PV of monthly payment

= $94 + $16,238.2820221969

PV of leasing the car = $16,332.28

Therefore, PV of leasing the car is $16,332.28.

c. What break-even resale price in three years would make you indifferent between buying and leasing?

This will be calculated by equating the PV of leasing the car to the difference between the purchase price and the PV of resale as follows:

PV of leasing car = Purchase price - PV of resale

$16,332.28 = $32,500 - PV of resale

Solving for PV of resale, we have:

PV of resale = $16,167.72.

The future value (FV) of resale price in 3 years can be calculated as follows:

FV of resale = PV of resale × (1 + r)^n

FV of resale = $16,167.72 × (1 + 0.005)^36 = $19,347.60

Therefore, the break even resale price in 3 years is $19,347.60.

7 0

2 years ago

Which of the following is NOT an advantage of group problem solving? It facilitates pooling of resources It is generally more pl

Alisiya [41]

Answer:

It (DOES NOT) speed up the problem solving process

Explanation:

It is more time consuming to solve a problem as a group, because there is compromise and deliberation time required for a group to come to a unified decision.

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2 years ago