The systematic response coefficient from inflation, would result in a change in any security return of <u>3.2 βI</u>.
<u>Explanation</u>:
<em><u>Given</u></em>:
Expected rate of inflation = 3%
Actual rate of inflation = 6.2%
The change in security return can be calculated by obtaining the differences between actual and expected levels of inflation.
Change in security return= Actual rate of inflation- Expected rate of inflation
= 6.2%-3%
= 3.2%
<u>Change in security return= 3.2 βI
</u>
<u></u>
Answer:
d. Accounts payable and accruals are tied directly to sales.
Explanation:
Additional funds needed method determines the amount that the company needs to finance the increase in total sales.
In response to the increase in sales, the company has to increase its assets to achieve that goal. The increase in total assets is partly offset by an increase in liabilities and the other part is offset by an increase in retained earnings.
The only true statement of the AFN equation is the option d), and the other options are not right.
Answer:
product
Explanation:
When a company is organized by product, it will structure its whole operation to cater to focus on that one product. This will include the way the arrange their production method, distribution strategy, marketing plan that they implemented, etc.
We can use coca-cola as an example.
They separate the office to cater specific products only. They do this to increase the efficiency of the production. Focusing only on one product will make it easier for the workers to understand the type of customers that they face in the market and the type of materials and production method that will be the most cost efficient.
Answer:
Present value of zero coupon bond = $283
Explanation:
Provided that zero coupon bonds are to be issued.
In zero coupon bonds issue price is less than face value to meet the needs.
Interest rate = 13%
Duration = 10 years, Paid semiannually.
Thus periods = 20
Interest rate = 
Therefore, Present value factor @6.5% for 20 periods = 0.283
Therefore, Value of bond today = $1,000 
0.283 = $283
Answer:
Owner's equity at year end would be $61,100
Explanation:
$58,900(Beginning equity) + $8,200 (Net income increases owner's equity) - $2,500 (This is paid out of retained earnings/owner's equity) - $3,500 ( A repurchase of stocks reduced owner's equity as cash would have been given to the shareholder for their equity) = $61,100
