State and local crime rates are affected by citizens with gambling addictions.

Blossom Company purchased a new machine on October 1, 2017, at a cost of $66,000. The company estimated that the machine has a s

Ugo [173]

Answer:

Results are below.

Explanation:

Giving the following information:

Purchase price= $66,000

Salvage value= $5,700

Useful life= 6

First, we need to calculate the annual depreciation using the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (66,000 - 5,700) / 6= 10,050

2017:

Annual depreciation= (10,050/12)*3= $2,512.5

2018:

Annual depreciation= $10,050

8 0

3 years ago

Economan has been infected by the free enterprise bug. He sets up a firm on extraterrestrial affairs. The rent of the building i

monitta

Answer:

There are two types of profit and costs in nay business, which are accounting costs/profit and the economic costs/profits.

Accounting costs include everything that is tangible or the monetary costs a firm pays, while the economic costs include the cost which is intangible(Opportunity costs) as well as tangible.

Here in this question, the profit of the firm therefore is,

a. From an accountant;s definition = 130000-(6000+42000+7000) = 75000.

b. From an economist's definition = 130000-(6000+42000+7000+65000+6000) = 4000.

Hope this helps you. Thankyou.

7 0

2 years ago

Read 2 more answers

Compared to attending a technical school, completing a four-year college degree allows you to

Ivanshal [37]

Enter the workforce sooner

7 0

2 years ago

What is Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B? Portfolio Average Retur

inn [45]

Answer:

The Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B = 2.04 %

Explanation:

Solution

Given that:

Now,

The Jensen’s alpha of a Portfolio is computed by applying the formula below:

Jensen's alpha = Portfolio Return − [Risk Free Rate of Return + ( Portfolio Beta * (Market Rate of Return − Risk Free Rate of Return ) ) ]

For the information given in the question we have the following,

The Risk free rate of return = 3. 1%

In order to find the Jensen’s alpha we have to first get the following from the information given in the question :

1. Portfolio Return

2. Portfolio Beta

3.Market Rate of Return

Thus,

(A)Calculation of Portfolio Return :

The formula for calculation of Portfolio Return is given as:

E(RP) = ( RA * WA )+ ( RB * WB )

Where

E(RP) = Portfolio Return

RA = Average Return of Portfolio A ; WA = Weight of Investment in Portfolio A

RB = Average Return of Portfolio B ; WB = Weight of Investment in Portfolio B

For the information given in the question we have the following:

RA = 18.9 %, WA = 45 % = 0.45, RB = 13.2 %, WB = 55 % = 0.55

By applying the values in the formula we have

= ( 18.9 % * 0.45 ) + ( 13.2 % * 0.55 )

= 8.5050 % + 7.2600 % = 15.7650 %

(B). Calculation of Portfolio Beta:

Now,

The formula for calculating the Portfolio Beta is

ΒP = [ ( WA * βA ) + ( WB * βB ) ]

Where,

βP = Portfolio Beta

WA = Weight of Investment in Portfolio A = 45 % = 0.45 ; βA = Beta of Portfolio A = 1.92

WB = Weight of Investment in Portfolio B = 55 % = 0.55 ; βB = Beta of Portfolio B = 1.27

By Applying the above vales in the formula we have

= ( 0.45 * 1.92 ) + ( 0.55 * 1.27 )

= 0.8640 + 0.6985

= 1.5625

(C). Calculation of Market rate of return :

Now,

The Market Risk Premium = Market rate of return - Risk free rate

From the Information given in the Question we have

The Market Risk Premium = 6.8 %

Risk free rate = 3. 1 %

Market rate of return = To find

Then

By applying the above information in the Market Risk Premium formula we have

6.8 % = Market rate of Return - 3.1 %

Thus Market rate of return = 6.8 % + 3.1 % = 9.9 %

So,

From the following information, we gave

Risk free rate of return = 3.1% ; Portfolio Return = 15.7650 %

The Portfolio Beta = 1.5625 ; Market Rate of Return = 9.9 %

Now

Applying the above values in the Jensen’s Alpha formula we have

The Jensen's alpha = Portfolio Return − [Risk Free Rate of Return + ( Portfolio Beta * (Market Rate of Return − Risk Free Rate of Return )) ]

= 15.7650 % - [ 3.1 % + ( 1.5625 * ( 9.9 % - 3.1 % ) ) ]

= 15.7650 % - [ 3.1 % + ( 1.5625 * 6.8 % ) ]

= 15.7650 % - [ 3.1 % + 10.6250 % ]

= 15.7650 % - 13.7250 %

= 2.0400 %

= 2.04 % ( when rounded off to two decimal places )

Therefore, the Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B = 2.04 %

7 0

3 years ago

If the MPC = .80, all taxes are lump-sum taxes, and the equilibrium GDP is $40 billion below the full-employment GDP, the size o

Sav [38]

Answer:

recessionary gap = 8 billion

so correct option is c) $8 billion

Explanation:

given data

MPC = 0.80

GDP = $40 billion

to find out

the size of the recessionary gap

solution

we get here first Multiplier that is

Multiplier = $\frac{1}{1-MPC}$ ..................1

Multiplier = $\frac{1}{1-0.80}$

Multiplier = 5

so recessionary gap will be

recessionary gap = $\frac{GDP}{5}$ ................2

recessionary gap = $\frac{40}{5}$

recessionary gap = 8 billion

so correct option is c) $8 billion

5 0

2 years ago