The cost of the merchandise inventory that the business ▼ has sold to customers.

A five-year security was purchased two years ago by an investor who plans to resell it. The security will be sold by the investo

Zielflug [23.3K]

Answer:

Secondary market.

Explanation:

In this scenario, a five-year security was purchased two years ago by an investor who plans to resell it.

Hence, the security will be sold by the investor in the so-called secondary market.

When one investor sells his or her stock directly to another, the transaction is said to occur in the secondary market.

Secondary market can be defined as a market where various investors sell and buy securities from other investors.

Some examples of secondary market around the world are New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE) and National Stock Exchange (NSE).

On the other hand, the primary market refers to the market where these securities that are being sold are issued or created.

5 0

3 years ago

An advantage of absorption cost transfer pricing arises from the fact that Select one: A. This method keeps the purchasing divis

Roman55 [17]

Answer:

This method encourages the selling division to operate efficiently.

Explanation:

Absorption cost transfer pricing is very essential to determine the right amount in which goods and services will be sold in the market. It involves setting a price for a particular product with inclusion of all its variable costs.

Absorption cost transfer pricing enables an organization to maximise profit this is because all the different cost incurred during production are added to the price of the product.

7 0

3 years ago

There are three economy situations and two stocks Information is as follows Economy Stock A Stock B Booming 0.3 10 20 Neutral 0.

Bumek [7]

Answer:

a) A = 4.50% and B = 2.00%

b) SD for A = 4.15 %

c) Portfolio Return = 3.0%

Explanation:

a) Expected Returns for Both A and B respectively:

In order to calculate the expected returns, let's categorize the given data first.

Economy Probability Stock A Stock B

Booming 0.30 10% 20%

Neutral 0.30 5% 0%

Recession 0.40 0% -10% (not 10%)

So,

Expected Return for Stock A:

A = Sum of (all Probability x Stock A)

A = (0.30 x 0.10) + (0.30 x 0.05) + (0.40 x 0.00)

A = 0.045

A = 4.50 %

Return for Stock B:

B = Sum of all Probability x Stock B

B = (0.30 x 0.20) + (0.30 x 0.00) + (0.40 x -0.10)

B = 0.002

B = 2.0%

b) Standard Deviation /Risk for Stock A:

SD for A = Sum (Square Root (Probability*(Stock A Return - Expected Return of Stock A)²) )

SD for A = $\sqrt{0.30*(0.10-0.045)^2 + 0.30*(0.05-0.045)^2+0.40*(0.00-0.045)^2}$

SD for A = 0.0415

SD for A = 4.15%

c) Portfolio Return Given that:

Value Weight Return

Stock A 4000 0.4 4.50%

Stock B 6000 0.6 2.0%

10000

Portfolio Return = Sum of ( Weight x Return)

= (0.4 x 0.045) + (0.6 x 0.02)

= 0.03

Portfolio Return = 3%

6 0

3 years ago

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

IgorLugansk [536]

Answer:

Jergen Corporation

2019 2020

(1) Profit margin Ratios: 13% 10%

(2) Gross profit rate 39.2% 35.7%

(3) Asset turnover 1.06 1.02

(4) Earnings per share $2.63 $1.80

(5) Price-earnings ratio = 3.2x 4.2x

(6) Payout ratio = 62% 76%

(7) Debt to assets ratio = 32% 28%

Explanation:

a) Data and Calculations:

Jergan Corporation

Balance Sheets

December 31

2020 2019 2018

Cash $ 29,300 $ 17,300 $ 17,000

Accounts receivable (net) 49,900 44,100 47,800

Other current assets 90,900 96,000 63,900

Investments 55,200 70,200 45,600

Plant and equipment (net) 500,700 370,600 358,000

$726,000 $598,200 $532,300

Current liabilities $84,800 $79,100 $70,300

Long-term debt 145,700 85,900 50,800

Total debt $230,500 $165,000 $121,100

Common stock, $10 par 348,000 320,000 312,000

Retained earnings 147,500 113,200 99,200

$726,000 $598,200 $532,300

Jergan Corporation

Income Statement

For the Years Ended December 31

2020 2019

Sales revenue $743,000 $606,900

Less: Sales returns and allowances 40,000 29,500

Net sales 703,000 577,400

Cost of goods sold 427,400 371,500

Gross profit 275,600 205,900

Operating expenses

(including income taxes) 184,210 148,160

Net income $ 91,390 $ 57,740

2020 2019 2018

Market price of common stock $8.50 $7.50 $7.00

2020 2019 2018

Retained earnings 147,500 113,200 99,200

Net income $ 91,390 $ 57,740

Dividend paid $57,090 $43,740

Outstanding shares 34,800 32,000

Dividend per share $1.64 $1.37

Average Assets: $662,100 $565,250

($726,000 + $598,200)/2 ($598,200 + $532,300)/2

a) Ratios:

2019 2020

(1) Profit margin Ratios: 13% ($91,390/$703,000) 10% ($57,740/$577,400)

(2) Gross profit rate 39.2% 35.7%

($275,600/$703,000) ($205,900/$577,400)

(3) Asset turnover 1.06 1.02

$703,000/$662,100 $577,400/$565,250

(4) Earnings per share $2.63 ($ 91,390/34,800) $1.80 ($57,740/32,000)

(5) Price-earnings ratio = 3.2 ($8.50/$2.63) 4.2 ($7.50/$1.80)

(6) Payout ratio = 62% ($1.64/$2.63) 76% ($1.37/$1.80)

(7) Debt to assets ratio = 32% 28%

($230,500/$726,000) ($165,000/$598,200)

7 0

3 years ago

James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two department

GREYUIT [131]

Answer:

Total cost= $9395

Explanation:

Giving the following information:

The company has two departments: Assembly and Sanding.

The Assembly Department:

Departmental overhead rate of $35 per machine hour.

The Sanding Department:

Departmental overhead rate of $20 per direct labor hour.

Job 603:

Direct labor hours used 85

Machine hours used 107

The cost of direct labor is $30 per hour

Direct materials used= $1,400.

Total cost= direct materials + direct labor + manufacturing overhead

Total cost= 1400 + $30*85 + [(107*$35)+(85*$20)]

Total cost= 1400 + 2550 + 5445

Total cost= $9395

6 0

3 years ago