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prohojiy [21]
2 years ago
9

Over the past five years, Teen Clothing stock produced returns of 18.7, 5.8, 7.9, 10.8, and 11.6 percent,respectively. For the s

ame five years, the risk-free rate 5.2, 3.4, 2.8, 3.4, and 3.9 percent, respectively.What is the arithmetic average risk premium on Teen Clothing stock for this time period?A. 6.89 percentB. 7.01 percentC. 7.22 percentD. 7.34 percentE. 7.57 percent
Business
1 answer:
Alexandra [31]2 years ago
8 0

Answer:

The correct answer is  C. 7.22 percent

Explanation:

To find the arithmetic risk premium for the 5 year period, the formula is

Average risk premium for the period =  Sum of risk premium for each year /  number of years = ∑ra(i) - rf(i) / n

ra = asset or investment return / 100

rf = risk free return / 100

Where i represents each year.

Sum of risk premium for each year = (0.187 - 0.052) + (0.058 - 0.034) + (0.079 - 0.028) + (0.108 - 0.034) + (0.116 - 0.039) = 0.361

Average risk premium = 0.361 / 5 = 0.0722 = 7.22 / 100 = 7.22 percent

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Fiesta28 [93]

Answer: $13.25

Explanation:

From the question, we are informed that an oral auction has bidders willing to pay $4, $6, $9, $12, $13, and $15 for an item.

Based on the above scenario, the winning bidder will pay a little more than $13 or $13.25. This is because the bidder with the highest pay is willing to pay $15 but since the next person is willing to pay $13, that means the next bidder will price it at an amount that is a little bit above $13 which is $13.25.

5 0
3 years ago
True or false: You have to pay to attend college?
Naily [24]

Answer: Most of the time, yes.

Explanation: For most average college students you do have to pay, unless you receive a scholarship. But those are pretty hard to get so i recommend just robbing a bank (DONT ACTUALLY, VERY ILLEGAL)

8 0
3 years ago
An employee has an average wage of $60,000 and has worked for the firm for 28 years. The defined benefit pension plan pays retir
riadik2000 [5.3K]

Answer:

An employee has an average wage of $60,000 and has worked for the firm for 28 years. The defined benefit pension plan pays retirees 2.3% of the average wage times the years of service. The employee can expect to receive __$1,380_____ per year upon retirement.

Explanation:

a) Data and Calculations:

Average wage = $60,000

Number of years worked in the firm = 28 years

Defined benefit pension plan rate = 2.3%

Annual defined benefit pension plan = $1,380 ($60,000 * 2.3%)

Total benefit to be received = $38,640 ($1,380*28) or ($60,000 *28 * 2.3%).

b) This employee is expected to receive the total benefit of $38,640 for serving the firm for 28 long years under the defined pension plan, given the plan rate of 2.3% of the average wage.

8 0
2 years ago
You are planning your retirement in 10 years. You currently have $172,000 in a bond account and $612,000 in a stock account. You
Paha777 [63]

Answer: annual withdrawal limit is $173,977.05

Explanation:

below is an attached image of the solved problem.

i hope you find it useful.

⇒ The annual withdrawal limit is $173,977.05

cheers i hope this helps!!!!

3 0
3 years ago
The following trial balance was taken from the records of Fairport Manufacturing Company at the beginning of 2019:
Rainbow [258]

Answer:

Fairport Manufacturing Company

T-accounts

Cash

Account Titles                                Debit        Credit

Beginning balance                   $ 20,000

Accounts payable                                         $10,500

Wages payable                                               18,000

Selling and distribution expense                     1,800

Utilities and Rent for production                    9,300

Sales Revenue                            36,000

Ending balance                                           $16,400

Raw materials inventory

Account Titles                                Debit        Credit

Beginning balance                   $ 1,800

Accounts Payable                      11,400

Work-in-Process                                           $10,800

Ending balance                                              $2,400

Work in process inventory

Account Titles                                Debit        Credit

Beginning balance                   $ 2,400

Raw materials                            10,800

Wages Payable                          19,950

Overhead Applied                      11,970

Finished Goods Inventory                          $24,000

Ending balance                                             $21,120

Finished goods inventory

Account Titles                                Debit        Credit

Beginning balance                   $ 4,200

Work-in-Process                        24,000

Cost of goods sold                                       $25,500

Ending balance                                               $2,700

Property, plant, and equipment

Account Titles                                Debit        Credit

Beginning balance                   $ 15,000

Accumulated depreciation

Account Titles                                Debit        Credit

Beginning balance                                        $ 6,000

Depreciation expense                                     3,000

Ending Balance                         $9,000

Accounts Payable

Account Titles                                Debit        Credit

Raw materials                                               $12,000

Cash                                            $10,500

Ending balance                             $1,500

Wages Payable

Account Titles                               Debit         Credit

Work-in-Process                                          $19,950

Cash                                           $18,000

Ending balance                            $1,950

Common stock

Account Titles                                Debit        Credit

Beginning balance                                        $ 16,800

Retained earnings

Account Titles                                Debit        Credit

Beginning balance                                        $ 20,600

Production Supplies

Account Titles                                Debit        Credit

Accounts Payable                                              $600

Overhead                                      $422

Ending balance                              $178

Overhead Expenses

Account Titles                               Debit          Credit

Work-in-Process                                            $11,970

Cash (Utilities)                               9,300

Depreciation expense                  3,000

Production supplies                         422

Cost of goods sold (Underapplied)                  752

Sales Revenue

Account Titles                                Debit        Credit

Cash                                                             $36,000

Income Summary                       $36,000

Cost of Goods Sold

Account Titles                                Debit        Credit

Finished Goods Inventory       $25,500

Overhead (underapplied)                752

Income Summary                                        $26,252

Selling and Distribution Expense

Account Titles                               Debit          Credit

Cash                                          $1,800

Utilities and Rent

Account Titles                               Debit          Credit

Cash                                            $9,300

Overhead                                                       $9,300

Depreciation Expense - Plant & Equipment

Account Titles                               Debit          Credit

Accumulated Depreciation        $3,000

Overhead                                                       $3,000

b) Schedule of Cost of Goods Manufactured and Sold:

WIP Beginning Inventory         $ 2,400

Raw materials                            10,800

Direct labor                                19,950

Overhead Applied                      11,970

Cost of goods in production  $45,120

Ending WIP Inventory                21,120

Cost of manufactured           $24,000

Finished Goods Inventory     $ 4,200

Cost of manufactured            24,000

Cost of goods available       $28,200

Ending FG Inventory                 2,700

Cost of goods sold              $25,500

Income Statement for the year ended December 31, 2019:

Sales Revenue                      $36,000

Cost of Goods Sold                 26,252

Gross profit                                9,748

Selling and distribution exp.      1,800

Net income                              $7,948

Retained Earnings, January 1, 2019 $20,600

Net income                                             7,948

Retained Earnings, December 31,    $28,548

Balance Sheet as of December 31, 2019:

Assets:

Cash                                          $ 16,400

Raw materials inventory               2,400

Work in process inventory          21,120

Finished goods inventory            2,700

Production Supplies                         178     $42,798

Property, plant, and equipment 15,000

Accumulated depreciation          9,000      $6,000

Total assets                                                $48,798

Liabilities and Equity:

Accounts Payable                                        $1,500

Wages Payable                                              1,950

Total liabilities                                             $3,450

Common stock                         $16,800

Retained earnings                     28,548  $45,348

Total liabilities and equity                       $48,798

Explanation:

a) Data and Calculations:

Trial Balance at January 1, 2019:

Account Titles                                Debit        Credit

Cash                                         $ 20,000

Raw materials inventory                1,800

Work in process inventory           2,400

Finished goods inventory            4,200

Property, plant, and equipment 15,000

Accumulated depreciation                           $ 6,000

Common stock                                               16,800

Retained earnings                                         20,600

Total                                       $ 43,400      $ 43,400

Analysis of Transactions for the period:

1. Raw materials $11,400 Production Supplies $600 Accounts payable $12,000

2. Work-in-Process $10,800 Raw materials $10,800

3. Accounts payable $10,500 Cash $10,500

4. Work-in-Process $19,950 Wages Payable $19,950

5. Wages Payable $18,000 Cash $18,000

6. Work-in-Process $11,970 Overhead Applied $11,970 ($12,600 * 950/1,000)

7. Selling and Administrative expense $1,800 Cash $1,800

8. Utilities and Rent for production $9,300 Cash $9,300

9. Depreciation Expense-Plant and Equipment $3,000 Accumulated Depreciation $3,000

10. Finished Goods Inventory $24,000 Work-in-Process $24,000

11. Cost of Goods Sold $25,500 Finished Goods Inventory $25,500

12. Cash $36,000 Sales Revenue $36,000

13. Overhead $422 Production Supplies $422 ($600 - $178)

14. Cost of Goods Sold $752 Underapplied Overhead $752

Adjusted Trial Balance at December 31, 2019:

Account Titles                                Debit        Credit

Cash                                          $ 16,400

Raw materials inventory               2,400

Work in process inventory          21,120

Finished goods inventory            2,700

Property, plant, and equipment 15,000

Accumulated depreciation                          $ 9,000

Accounts Payable                                            1,500

Wages Payable                                                1,950

Common stock                                               16,800

Retained earnings                                         20,600

Production Supplies                        178

Sales Revenue                                               36,000

Cost of Goods Sold                 26,252

Selling and distribution exp.      1,800

Totals                                    $85,850        $85,850

3 0
3 years ago
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