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Delvig [45]
3 years ago
13

Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 5.90%, and a maturity risk premium of 0.

10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the number of years to maturity. What rate of return would you expect on a 1-year Treasury security, assuming the pure expectations theory is NOT valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average.
Business
1 answer:
Kamila [148]3 years ago
6 0

Answer:

The answer is 9.00%

Explanation:

real risk-free rate = 3.00%

average expected future inflation rate = 5.90%

Maturity risk premium = 0.10%

The expected rate of return on a 1 year treasury security would be = the average expected future inflation rate + maturity risk premium + real risk-free rate.

= 3.00% + 5.90% + 0.10%

= 9.00%

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A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: Is callable
Eddi Din [679]

Answer:

A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: Is callable by the creditor - Will be refinanced with stock.

Option A is the correct answer.

Explanation:  

Generally, a short term liability is required to be paid by the company within a period of 1 year. Nevertheless, if the liability is callable the creditor, the company is not required to pay the liability within a year.

Thus, in this instance, a current liability can be detailed as a long term debt in the balance sheet.

6 0
3 years ago
Adam Company has 100 units costing $300 in beginning inventory. During the year, the company purchases 900 units for a total cos
shutvik [7]

Answer:

The value of the ending inventory is $ 640

Explanation:

First we have to make a table showing the inventory movements.

Beginning inventory                            100 units                         $    300

Purchases                                             900 units                        $ 2,880

Ending inventory                                   200 units

Adam Company uses the FIFO method which means that the units sold shall be valued at the opening inventory plus purchases. The ending inventory shall be priced at the purchase value.

The unit value for purchases is $ 2,880/900 = $ 3.20 per unit.

So the value of the ending inventory shall be

200 units * $ 3.2 per unit   = $ 640

8 0
3 years ago
Read 2 more answers
Capri Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost. Cost flows
nikklg [1K]

Answer:

$41,000.

Explanation:

The computation of the amount of direct materials cost charged to completed jobs is shown below:

= Direct Material cost - charging cost in direct material cost

= $57,000 - $16,000

= $41,000

By subtracting the charging cost that added in the direct material cost from the direct material cost we can find out the direct material cost charged that is computed above.

4 0
3 years ago
How can optimism help you as an entrepreneur?
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4 0
3 years ago
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Emerald Co. uses a perpetual inventory system and records purchases of merchandise at net cost. The company recently purchased 2
Aneli [31]

Answer:

Dr accounts payable   $2,300

Cr cash                                      $2300

Explanation:

Initially the cost of the purchases=$4600

Returning half of the disc means the left for the discs actually bought is half of the invoice price of $4600 i.e $2,300

By not paying within the discount period implies that the debt stands at $2,300

Without mincing words,payment of $2,300 to the supplier automatically translates to debiting account payable with $2,300 and crediting cash account with the same amount.

The correct answer would :

Dr accounts payable   $2,300

Cr cash                                      $2300

This is missing from the options provided.

3 0
3 years ago
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