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KATRIN_1 [288]
3 years ago
5

Rachel sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. If the

investor closes the position at $49, what was the percentage earned or lost on the investment? If the position had been closed when the price of the stock was $27, what would have been the percent earned or lost on the position?
Business
1 answer:
andrew11 [14]3 years ago
7 0

Answer:

23.25%; 62.01%

Explanation:

(a) Amount received:

= No. of shares × selling price

= 100 × $43

= $4,300

Sales deposit = 60% of Amount received

                        = 0.6 × $4,300

                        = $2,580

Amount paid = No. of shares × Purchase price

                      = 100 × $49

                      = $4,900

Therefore, Loss = $4,900 - $4,300

                           = $600

(b) If buys at $27, then

Amount paid = $27 × 100

                     = $2,700

Profit = $4,300 - $2,700

         = $1,600

Loss on investment:

= ($600 ÷ $2,580) × 100

= 23.25%

Profit on investment:

= ($1,600 ÷ $2,580) × 100

= 62.01%

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Answer:

Results are below.

Explanation:

Giving the following information:

In June, Bedford Company sold 350 widgets. The average sales price was $34. During the month, fixed costs were $6,320 and variable costs were 40% of sales.

F<u>irst, we need to calculate the unitary variable cost:</u>

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<u>Now, we can determine the contribution margin per unit and the contribution margin ratio:</u>

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contribution margin per unit= 34 - 13.6= $20.4

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<u>To calculate the break-even point in units and dollars, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 6,320/20.4

Break-even point in units= 310 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 6,320/0.6

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Break-even point (dollars)= 10,320/0.6

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