Answer:
$16,500
Explanation:
The computation of increase in investment is shown below:-
Here, if the investor holds 20% or more but less than 50% shares than the dividend paid and income earned by the investee are reported.
Increase in investment = Shares of net income - Share of dividends
= $55,000 × 30% - $0 (Dividend is not paid)
= $16,500
Therefore for computing the increase in investment under equity method we simply applied the above formula.
Answer:
The optimum production quantity is 72 wheel bearings per batch.
Explanation:
Wheel Rite can produce 480 wheel bearings per day.
Setup cost are $39 per batch.
Holding costs are $0.70 per unit per year.
The optimum batch size can be calculated as the one that minimizes the cost. This can be calculated with the Economic Order Quantity formula:
![Q=\sqrt{\frac{2DS}{H} }](https://tex.z-dn.net/?f=Q%3D%5Csqrt%7B%5Cfrac%7B2DS%7D%7BH%7D%20%7D)
In this case, the units are:
D: daily demand (52 u.)
S: Setup cost per order ($39)
H: holding cost per unit per year ($0.70)
Then, we have:
![Q=\sqrt{\frac{2DS}{H} }=\sqrt{\frac{2*52*39}{0.7} }=\sqrt{5,794}=76.12\approx 72](https://tex.z-dn.net/?f=Q%3D%5Csqrt%7B%5Cfrac%7B2DS%7D%7BH%7D%20%7D%3D%5Csqrt%7B%5Cfrac%7B2%2A52%2A39%7D%7B0.7%7D%20%7D%3D%5Csqrt%7B5%2C794%7D%3D76.12%5Capprox%2072)
The optimum production quantity is 72 per batch.
The statements regarding Fannie Mae loan are true except that A. Fannie Mae lends money directly to homebuyers.
<h3>How to illustrate the information?</h3>
It should be noted that Federal National Mortgage Association (Fannie Mae) was established to provide a secondary market for FHA-insured and VA-guaranteed loans.
Fannie Mae fully guarantees timely payment of interest and principal to investors and is authorized to buy both conventional home loans and government-sponsored
In conclusion, the correct option is A.
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Answer:
6.11%
Explanation:
For computing the variance, first we have to determine the expected return which is shown below:
= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)
= (12% × 5%) + (10% × 85%) + (2% × 10%)
= 0.6% + 8.5% + 0.2%
= 9.30%
Now the variance would equal to the
= Weightage × (Return - Expected Return) ^2
For boom:
= 5% × (12% - 9.3%) ^2
= 0.3645
For normal economy:
= 85% × (10% - 9.3%) ^2
= 0.4165
For recession:
= 10% × (2% - 9.3%) ^2
= 5.329
So, the total variance would be
= 0.3645 + 0.4165 + 5.329
= 6.11%