Answer:
a) I used an excel spreadsheet since there is not enough room here.
b) Net income = $8,950
Cash flows form operating activities =
Net income $8,950
Adjustments to net income:
- Increase in account payable <u> $250</u>
Net cash from operating activities $9,850
Net income is lower because a company must record revenues and expenses when they happen, not when they are associated with cash flows. This is why a company that makes all credit sales might have a large profit, but a small amount of cash (the opposite of this situation).
Answer:
a tying arrangement
Explanation:
Based on the information provided within the question it can be said that this scenario is illustrating a tying arrangement. This term refers to when a supplier/individual sells a product to another company/individual only on the condition that they purchase another specific product from them and not the competition. Which is what Midwest Agri is doing by selling it's sugar substitiute to Nice Candies but only if they agree to purchase the corn that they need from them and not their competitors.
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Answer:
C. 7.81%
Explanation:
Stock A and Stock B expected Return shall be calculated using the following formula:
Stock A/B expected [email protected]*Return at [email protected]*Return at [email protected]*Return at Recession.
Stock A return=0.21*18.9%+0.74*15.8%+0.05*-24.6%
=14.43%
Stock B return=0.21*9.7%+0.74*7.6%+0.05*4.2%
=7.87%
Market risk premium=(Stock A Return- Stock B return)/0.84
Market risk premium=(14.43%-7.87%)/0.84=7.81%
So Based on the above explanation, the answer shall be C. 7.81%
