Answer and Explanation:
a. Here it is reasonable to presume that the treasury bond generates high returns when there is a recession.
b. The calculation of the expected rate of return and the standard deviation for each investment is shown below:
For stocks
= (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)
= (29% × 0.30) + (18% × 0.50) + (-4% × 0.20)
= 8.7% + 9% - 0.80%
= 16.9%
For bonds
= (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)
= (6% × 0.30) + (9% × 0.50) + (16% × 0.20)
= 1.8% + 4.5% + 3.2%
= 9.5%
Now the standard deviation calculation is to be shown in the excel spreadsheet
For the stock it is 11.48%
And, for the bond it is 3.5%
c. The investment that should be prefer could be computed by determine the coefficient of variation which is shown below:
Formula i.e. used is
= Standard deviation ÷ expected return
For stock, it is
= 16.9% ÷ 11.48%
= 1.47
And, for bonds it is
= 9.5% ÷ 3.5%
= 2.71
Since for the bonds the coefficient of variation is greater so the same is to be considered
Therefore the bond should be prefer
Answer:
balance in bills receivables account = $364000
Explanation:
given data
write off = $32000
balance in accounts receivable = $400000
balance in allowance account = $36000
to find out
net realizable value of accounts receivable
solution
we first find credit balance in allowance that is
credit balance in allowance = $36000 - $32000
credit balance in allowance = $4000
and
so here balance in bills receivables account is
balance in bills receivables account = ( $400000 - $32000 ) - ( $36000 - $32000 )
balance in bills receivables account = $368000 - $4000
balance in bills receivables account = $364000
Growth stage. Profits from the company should be able to comfortably cover overhead and pay employees at this point. Sales are probably rising, and profit margins have risen once capital investments and loans have been repaid by the business.
<h3>What these terms means?</h3><h3>A) Positive cash flow</h3><h3>B) Negative cash flow</h3><h3>C) Dividends</h3>
- The net amount of cash and cash equivalents coming into and going out of a business is referred to as cash flow.
- Money spent and money received represent inflows and outflows, respectively. Fundamentally, a company's capacity to produce positive cash flows, or more specifically, its capacity to maximize long-term free cash flow, determines its ability to create value for shareholders (FCF).
- When a company has positive cash flow, its net balance on its cash flow statement for that particular period is higher than zero. In other words, the net result of all cash inflows and outflows over this period is positive rather than negative, and as a result, the company's cash reserves are increasing.
- Because a capital expenditure involves money leaving your company, it has a negative value in comparison to income or revenue. Because they are being deducted from your balance sheet or show as a negative capital expenditure on cash flow statements, capital expenditures are negative.
- a sum of money that is regularly paid by a business to its shareholders out of its profits (typically once per year) (or reserves) is called Dividends.
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Market Price =$36.09,is one share of this stock worth at a discount rate of 13.3 percent.
<h3>Common stock: What does that mean?</h3>
A security that symbolizes ownership in a firm is called common stock. Common stock owners choose the executive board and cast ballots for corporate rules. This kind of stock ownership frequently offers better long-term rates of return. Common stock is not subject to either assets or liabilities.
<h3>How are shares & common stock different from one another?</h3>
Definition: The term "stock" refers to the holder's interest in one or more businesses. A single share of interest in a firm is referred to as a "share" in contrast. For instance, if X has stock investments, X may have a collection of shares from various companies.
<h3>Briefing:</h3>
Market price = dividends per share
P0 = $4.80/.133
P0 = $36.09
Market Price =$36.09
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The answer is John should continue to fix the machine himself.
