Answer:
11.3%
Explanation:
Given that,
Growth rate of industrial production, IP = 4%
Inflation rate, IR = 3.0%
Beta = 1.1 on IP
Beta = 0.5 on IR
Rate of return = 7%
Before the changes in industrial production and inflation rate:
Rate of return = α + (Beta on IP) + (Beta on IR)
7% = α + (1.1 × 4%) + (0.5 × 3%)
7% = α + 4.4% + 1.5%
7% - 4.4% - 1.5% = α
1.1% = α
With the changes:
Rate of return:
= α + (Beta on IP) + (Beta on IR)
= 1.1% + (1.1 × 7%) + (0.5 × 5%)
= 1.1% + 7.7% + 2.5%
= 11.3%
Therefore, the revised estimate of the expected rate of return on the stock is 11.3%.
Answer:
From my understanding its D as aggregate deals with atlarge
Answer:
Explanation:
1
Dr Accounts Receivable 74600
Cr Sales Revenue 74600
Dr Cost of Goods Sold 37900
Cr Inventory 37900
2
Dr Freight Out 310
Cr Cash 310
3
Dr Sales Revenue 3880
Cr Accounts Receivable 3880
Dr Inventory 1910
Cr Cost of Goods Sold 1910
4
Dr Sales Revenue 1160
Cr Accounts Receivable 1160
5
Dr Cash 53300
Cr Accounts Receivable A/c 53300
Answer:
Explanation:
The journal entry is shown below:
Inventory A/c Dr $73,500
To Accumulated depletion A/c $73,500
(Being the depletion is recorded)
The computation is shown below
First we have to compute the depletion per ton which is shown below:
= (Acquired cost of coal mine + Intangible development costs + fair value of the obligation - Sale value) ÷ (Number of estimated tons of coal extracted)
= ($400,000 + $100,000 + $80,000 - $160,000) ÷ (4,000 tons)
= $105
Now if 700 are extracted in first year, so the depletion would be
= 700 × $105
= $73,500
Answer:
Firm A should accept the project beacause it has high required rate of return which means low risk involved.
Explanation:
Rate of return = risk free return + Beta ( market risk premium)
Firm A
rate of return = 0.045 + 1.2 (0.07)
= 0.045 + 0.084
= 12.9%
Firm B ;
rate of return = 0.045 + 0.9(0.07)
= 0.045 + 0.063
= 10.8%
