Answer:
SO expected return on Mkt Portfolio Rm = 10.75%
Explanation:
market degree of risk aversion A = 3
Var = 0.0225 = SD^2
Rf = 4%
What is expected return on Mkt Portfolio ie Rm??
According to CAPM, Rm-Rf = A*SD^2
where SD is Std Dev (Recall SD^2 = Variance)
A is market degree of risk aversion
So we have Rm-4% = 3*0.0225
ie Rm = 4% + 3*0.0225 = 10.75%
SO expected return on Mkt Portfolio Rm = 10.75%
<span>If you use a credit card and don't know the ins and outs of the grace period, you risk taking an awkward financial pratfall.
Capitalizing on the grace period's break on interest charges can save the typical cardholder a couple hundred bucks a year. But the savings aren't automatic and, according to an October 2013 report by the Consumer Financial Protection Bureau, it's "unclear whether consumers understand" the grace period's wily ways.
"It's basically an interest-free period, but only if you pay your balance by the due date," said Nessa Feddis, general counsel at the American Bankers Association.
Learn to use grace period
What it is: The grace period is the window of time from the end of your billing cycle to the due date for that cycle. Paying your new balance in full by the due date triggers a break on interest on new purchases during the current billing cycle -- if you pay in full consistently. While the grace period is referred to as an interest free period, the break on interest extends to the dates that purchases are made and posted to your balance.
Wiping out your monthly balance sounds simple, but it can be tricky if you don't already make a habit of it. Regaining the benefits of the grace period after even one month of carrying a balance can be confusing. And there are exceptions and pitfalls to watch out for. Paying in full during the grace period doesn't give you a break on cash advances or convenience checks, which, unlike purchases, usually begin building up interest immediately. Some balance transfers may also be excluded from a grace period, depending on the terms of your card.
Grace period is a holdover
Credit cards aren't required to provide a grace period, but almost all of them do, with the typical period being at least 25 days -- the norm for major issuers. If your due date falls on a weekend, the deadline extends to the next business day. Cards that do provide a grace period are required to mail your bill at least 21 days before your payment due date, under the CARD Act.
"It's a holdover from the origins of credit cards," Feddis said. "People would make a purchase at the store (on credit), and stores would allow people to pay at the end of the month."
The local grocer probably didn't want to calculate interest with a pencil stub on a brown paper bag, any more than his customers wanted to pay it. These days, calculating a daily periodic rate is a breeze for computers, yet most card companies continue to offer a grace period "because people are accustomed to it," Feddis said.
If you currently struggle to make the minimum monthly payment on your cards, it will take some work on your budget to get to the point where you can pay in full and qualify for the grace period. About 18 percent of Americans pay the minimum due each month, according to an analysis by the credit bureau TransUnion. At the other end of the spectrum, 42 percent regularly pay their full balances, capturing the benefit of the grace period's "free" loan from their credit cards.
That leaves 40 percent in the middle who pay more than the minimum, but less than the full balance. Paying more than the minimum is never a bad idea -- it will always reduce your interest costs. But if your budget allows, paying enough to wipe out your monthly balance entirely will boost your savings quite a bit more</span>
Answer:
Jabeli must include = $2,220,000
Explanation:
As per the data given in the question,
Gross Income in 2019 = $2,300,000 - $80,000
= $2,220,000
So, Jabeli should include $2,220,000 in gross income and Jabeli is allowed to deduct $2,100,000 in 2019
In completed contact method of accounting :
Till the contract is completed and accepted, no revenue from the contract is recognized
In this case the purchaser may desire additional work to be done on a long term contract.
The regulations do not provide any amount of income(or loss) until the dispute is resolved.
Answer:
Decrease by $ 186,000
Explanation:
Variable Mfg. Cost $ 270
Variable Marketing $ 100 + increased by 2 per unid = $ 102
Total Variable $ 372
NOW Sales Price $ 310
Less Total Variable Cost 372
= Contribution Margin $ -62
Times units sold × 3000
= losses $ 186,000
Answer:
$12,500
Explanation:
Absorption costing consider all the cost incurred in production either variable or fixed as production cost and all the operating costs as the period costs. It calculates the gross profit after deducting the cost of goods sold from the net sales and net income after deduction the operating costs from the gross profit.
First of all we need to calculate the product cost.
Manufacturing cost
Direct materials $19
Direct labor $61
Variable manufacturing overhead $7
Fixed manufacturing overhead $15
($135,000/9,000) <u> </u>
Total Product cost <u> $102</u>
Now We will calculate the Net Income
Sales (8,600 x $116) $997,600
Less: Cost of goods sold (8,600 x $102) <u>$877,200</u>
Gross Profit $120,400
Less:
Variable selling & admin expense $99,000
($11 x 9,000)
Fixed selling and admin expense <u>$8,900 </u>
Net Income <u>$12,500 </u>
