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3 years ago

7

Joe's income is $500, the price of food (F, y-axis) is $2 per unit, and the price of shelter (S, x-axis)is $100. Which of the fo

llowing represents his budget constraint?
A. 500 = 2F + 100S
B. F = 250 - 50S
C. S = 5 - .02F
D. All of the above.

1 answer:

leonid [27]3 years ago

6 0

Answer:

D. All of the above.

Explanation:

We can model his budget constraint by the following first order function.

2F + 100S = 500

In which F is the number of food items that he buys and S is the number of shelters that he pays.

So A. is correct.

If we want to write this equation with F as a function of S, it is also possible:

2F + 100S = 500

2F = 500 - 100S

F = 250 - 50s

So B. is also correct

Writing with S as function of F

2F + 100S = 500

100S = 500 - 2F

S = 5 - 0.02F

So C. is also correct

The correct answer is:

D. All of the above.

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Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and comp

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Answer:

c. $3,379

Explanation:

<em>Calculate the Product Costs first as follows:</em>

Direct Materials :

Milling $ 450

Customizing $ 190

Direct Labor :

Milling $ 580

Customizing $ 570

Variable Overheads :

Variable manufacturing overhead : Milling ($ 1.30 ×70) $ 91

Variable manufacturing overhead : Customizing ($ 5.00×60) $300

Fixed Overheads :

Milling ( $ 153,400/ 26,000 × 70) $413

Customizing ( $ 18,500/5,000 × 60) $222

Total Cost $2,816

<em>To find Selling Price add a 20% Mark -up on Cost</em>

Total Cost $2,816.00

Add Mark-up 20% $563.20

Selling Price $3,379.20

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3 years ago

Basix Inc. calculates direct manufacturing labor variances and has the following information: Actual hours worked: 200 Standar

sweet [91]

Answer:

The price variance is unfavorable, while the efficiency variance is favorable

Explanation:

To determine the labor efficiency variance, we will use the following formula: Variance = (standard hours – actual hours) x standard rate = variance = (250 hours – 200 hours) x $10 per hour = 50 hours x $10 per hour = $500 favorable

To determine the labor price variance, we will use the following formula: variance = (standard rate - actual rate) x standard hours = ($10 per hour - $12 per hour) x 250 hours = -$2 per hour x 250 hours = -$500 unfavorable

7 0

3 years ago

arrange the investments in order from the highest risk and return potential to the lowest risk and return potential

dimulka [17.4K]

Answer:

Arrange the investments in order from the highest risk and return potential to the lowest risk and return potential:

A. property

B. bonds

C. starting a business

D. mutual funds

Solution:

C. starting a business

A. property

D. mutual funds

B. bonds

Explanation:

Investments are the exchanges of income during one period for assets that are expected to earn income in future periods. It is the act of committing capital now in order to obtain future earnings. The risk and return calibration depends on one's personal circumstances and risk appetite.

Some investments offer higher returns with great growth potentials and higher risks while others offer lower returns with lower risks.

Starting a business has the highest risk and return potential. The risk is that you may not realise any return. However, if you are successful in the business, you can get the highest return ever.

Property investments either by building new property, buying built property, or investing in property investment fund may also yield so much returns but the risks are higher than other investments in this class. There is no guarantee that prices of property will not fall so dramatically that you sustain big losses. There is always need to insure your property against disasters like fire.

Mutual funds are professionally managed funds whereby money is pooled from different investors in order to buy stocks, bonds, etc. with long-term horizon. It has higher risk profile than investing in bonds as an individual, because you could recoup some returns in bonds as interests are paid periodically.

Bonds are debt securities to a government or business with the promise of repayment and period interests. They are generally risk-free investments with lower returns because of the guaranteed repayment.

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3 years ago

Larry owns a dry cleaning business and would like to give his customers every opportunity to reach him. His Google My Business p

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Answer:

Larry can set up Messaging by adding a mobile number to Google My Business.

Explanation:

In addition to Larry's business phone number placed on his Google My Business panel, he needs to add his mobile number which would enable him to receive text messages from customers and respond to them accordingly.

3 0

3 years ago

We observe the following annualized yields on four Treasury securities: (75%)

Anon25 [30]

Answer:

Explanation:

1.

From the given information;

The spot rate for maturity at 0.5 year $(X_1) = 4\%/2 = 2\%$

The spot rate for maturity at 1 year is:

= $\dfrac{22.5}{(1+X_1)}+ \dfrac{1000 + 22.5}{(1+X_2)^2}=1000$

= $\dfrac{22.5}{(1+0.02)}+ \dfrac{1000 + 22.5}{(1+X_2)^2}=1000$

= $\dfrac{22.5}{(1+0.02)}+ \dfrac{1022.5}{(1+X_2)^2}=1000$

By solving for $X_2$ ;

$X_2$ = 2.253%

The spot rate for maturity at 1.5 years is:

$= \dfrac{25}{(1+X_1)}+ \dfrac{25}{(1+X_2)^2}+ \dfrac{1000 + 25}{(1+X_3)^3}=1000$

Solving for $X_3$

$X_3$ = 2.510%

The spot rate for maturity at 2 years is:

$= \dfrac{27.5}{(1+X_1)}+ \dfrac{27.5}{(1+X_2)^2}+ \dfrac{27.5}{(1+X_3)^3} +\dfrac{1000+27.5}{(1+X_4)^4} =1000$

By solving for $X_4$ ;

$X_4$ = 2.770%

Recall that:

Coupon rate = yield to maturity for par bond.

Thus, the annual coupon rates are 4%, 4.5%, 5%, and 5.5% for 0.5, 1, 1.5, 2 years respectively.

2.

For n years, the price of n-bond is:

$= \dfrac{cash \ flow \ at \ year \ 1}{1+X_1}+ \dfrac{cash \ flow \ at \ year \ 2}{(1+X_2)^2}+... + \dfrac{cash \ flow \ at \ year \ b}{(1+X_n)^n}$

Thus, for 2 years bond implies 4 periods;

∴

$= \dfrac{40}{1+0.02}+ \dfrac{40}{(1+0.02253)^2} + \dfrac{40}{(1+0.0252)^3}+ \dfrac{40}{(1+0.0277)^4}$

= $1047.024

3.

Suppose there exist no-arbitrage, then the price is:

$= \dfrac{0}{(1+0.02)}+\dfrac{1000}{(1+0.02253)^2}$

= 956.4183

Since the market price < arbitrage price.

We then consider 0.5, 1-year bonds from the portfolio

Now;

weight 2 × 1000 + weight 2 × 22.5 = 1000

weight 2 × 1022.5 = 1000

weight 2 = 1022.5/1000

weight 2 = 0.976

weight 1 + weight 2 = 1

weight 1 = 1 - weight 2

weight 1 = 1 - 0.976

weight 1 = 0.022

The price of a 0.5-year bond will be:

$= \dfrac{1000}{(1+0.02\%)} \\ \\ =\mathbf{980.39}$

The price of a 1-year bond will be = 1000

Market value on the bond portfolio = 0.022 × price of 0.5 bond + 0.978 × price 1-year bond = 956.42

= 0.022 × 980.39 + 0.978 × 1000

= 956.42

So, to have arbitrage profit, the investor needs to purchase 1 unit of the 1-year zero-coupon bond as well as 0.022 units of the 0.5-year bond. Then sell 0.978 unit of the 1-year bond.

Then will he be able to have an arbitrage profit of $56.42

4.

The one-period ahead forward rates can be computed as follows:

Foward rate from 0 to 0.5 $X_1$ = 2%

Foward rate from 0.5 to 1

$(1+X_2)^2 = (1+X_1) \times (1+ Foward \ rate \ from \ 0.5 \ to \ 1 )$

$(1+0.0225)^2 = (1+0.02) \times (1+ Foward \ rate \ from \ 0.5 \ to \ 1 )$

Foward rate from 0.5 to 1 = 2.5%

Foward rate from 1 to 1.5

$(1+X_3)^3 = (1+X_2)^2 \times (1+ Foward \ rate \ from \ 1 \ to \ 1.5 )$

$(1+0.0251)^3 = (1+0.0225)^3 \times (1+ Foward \ rate \ from \ 1 \ to \ 1.5 )$

Foward rate from 1 to 1.5 =3.021%

Foward rate from 1.5 to 2

$(1+X_4)^4 = (1+X_3)^3 \times (1+ Foward \ rate \ from \ 1.5 \ to \ 2 )$

$(1+0.0277)^4 = (1+0.0251)^3 \times (1+ Foward \ rate \ from \ 1.5 \ to \ 2 )$

Foward rate from 1.5 to 2 =3.021%

5.

The expected price of the bond if the hypothesis hold :

= $\dfrac{40}{1+ 0.03021}+ \dfrac{1000+40}{(1+0.03285)^2}$

$= \dfrac{40}{(1.03021)}+ \dfrac{1040}{(1.03285)^2}}$

= 1013.724254

= 1013.72

4 0

3 years ago