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3 years ago

"High Risk Investment = High Return Investment", "Low Risk Investment = Low Return Investment"

Business

1 answer:

Nikolay [14]3 years ago

4 0

Answer:

Monte Carlo Simulation

Explanation:

Monte Carlo simulation refers to a methodology used in monetary, program management, expense, and other prediction frameworks to know the impact of financial risks. A Monte Carlo model allows one to see all or most of the possible results in order to get a better understanding of the probability of a judgment.

In other words, Monte Carlo approaches can also be used in theory to address any issue with a deterministic explanation. By using the law of large numbers, by getting the empirical average of individual variable tests, integrals represented by expected value of a certain independent variables can be estimated.

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Question A The company Ping Pong Ltd has a current account in the bank and approximately 33 cheques were withdrawn from the bank

snow_lady [41]

Answer:

Ping Pong Ltd

i. No. The bank has not breached its duty of care to its customer, Ping Pong Ltd.

ii. No. The customer, Ping Pong, has not breached its duty of care to its bank.

Explanation:

The breach occurred between Mr. Z. and Ping Pong. Certainly, Mr. Z. breached his professional and fiduciary duty of care to Ping Pong, his employer. By presenting forged documents as evidence of supply transactions, Mr. Z. has fraudulently defrauded his employer to the tune of $6.6 million. It is the responsibility of Ping Pong to recover from Mr. Z. as soon as the fraud is discovered.

8 0

3 years ago

Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt—HD has more debt and pays a

Luden [163]

Answer:

2.41%

Explanation:

The difference between the two firms' ROEs is shown below:-

Particulars Firm HD Firm LD

Assets $200 Debt ratio 50% Debt ratio 30%

EBIT $40 Interest rate 12% Interest rate 10%

Tax rate 35%

Debt $100 $60

Interest $12 $6

($100 × 12%) ($60 × 10%)

Taxable income $28 $36

($40- $12) ($40 - $6)

Net income $18.2 $22.1

$28 × (1 - 0.35) $36 × (1 - 0.35)

Equity $100 $140

($200 - $100) ($200 - $60)

ROE 18.2% 15.79%

($18.2 ÷ $100) ($22.1 ÷ $140)

Taxable income = EBIT - Interest

Net income = Income - Taxable income

Equity = Assets - Debt

ROE = Net income ÷ Equity

Difference in ROE = ROE Firm HD - ROE Firm LD

= 18.2% - 15.79%

= 2.41%

So, for computing the difference between the two firms' ROEs we simply deduct the ROE firm LD from ROE firm HD.

3 0

3 years ago

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that

kkurt [141]

Complete Question:

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $130,000, which includes fixed costs of $70,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3 per unit, and avoid 30% of the fixed costs.

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $13,000 profit. If Harvey Automobiles makes the part, what will its operating income be?

A. 156,000 greater than if the company bought the part

B. 26,000 less than if the company bought the part

C. 26,000 greater than if the company bought the part

D. 62,000 greater than if the company bought the part

Answer:

Option C. 26,000 greater than if the company bought the part

Explanation:

Option A: In House manufacturing of 40,000 parts:

Variable Cost is always Relevant and is ($60,000)

The Fixed cost is always irrelevant unless it is specific fixed cost related to the decision. Hence Fixed cost is irrelevant here.

Option B: If we purchase from outsiders

The purchase cost of the product is variable cost hence it is relevant as it is always relevant.

Purchase Cost = $3 * 40,000 parts ($120,000)

The decrease or increase in the cost or income, due to a decision is always relevant. The decrease in cost is Opportunity income or benefits and is given as under:

Decrease in Fixed cost by 30% = $70,000 * 30% $21,000

Now the additional profit that will arise as we can manufacture additional parts of another Product B. This is only possible if we free factory space by purchasing parts of Product A from outsiders. This additional manufacturing of Product B parts will generate profit of $13,000 and thus is a relevant income here. It is also referred to as Opportunity Income.

Opportunity Income $13,000

Total Relevant Cost ($86,000)

<h2>Decision</h2>

The cost of option A is lower from Option B by $26000 ($86000 - $60000). Hence the operating income would be higher by $26,000 if the company manufactures in-house rather purchasing 40,000 parts from outsiders.

Option C is correct option here.

5 0

4 years ago

What is the movement of an economy from one condition to another and back again

pav-90 [236]

The business cycle is the movement of an economy from one condition to another and back again. The business cycle is also known as the economic cycle or trade cycle. This cycle represents the movement of resources from one end and their comeback at the same end after revolving. It can be understood as a businessman invests money in the business in the form of costs and the money comes back in the form of revenue or sales.

Hence the answer is the Economic cycle

3 0

3 years ago

Enterprise-level consultation and bargaining are complemented by an annual wage negotiation process called ________.

MrRissso [65]

Answer:

Shunto

Explanation:

Shunto is a word used by the Japanese and it literally means wages, labor or livelihood.

Basically, it refers to the annual wage bargaining (negotiation) sessions between the Japanese Enterprise (labor) Union and employers each requesting for an increment in their wages.

Hence, the enterprise-level consultation and bargaining by the Japanese Enterprise (labor) Union are complemented by an annual wage negotiation process called Shunto.

4 0

3 years ago