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Lemur [1.5K]
3 years ago
15

If the economy booms, RTF, Inc., stock is expected to return 9 percent. If the economy goes into a recessionary period, then RTF

is expected to only return 4 percent. The probability of a boom is 68 percent while the probability of a recession is 32 percent. What is the variance of the returns on RTF, Inc., stock
Business
1 answer:
ddd [48]3 years ago
8 0

Answer:

    Variance = 5.44

Explanation:

The variance of a portfolio is a measure of the deviation of the returns of the assets making up the portfolio. Using the standard deviation, the variance can be worked out.

<em>Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks.</em>

<em>Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company . </em>

<em>The variance would be determined as follows:</em>

Variance = Sum of  P×(R- r )^2  

P- probality

R- return on each asset

r- Expected return on portfolio

r =( Wa*Ra) + (Wb*Rb)

Expected return (r) = (9% × 0.68 ) + (4% × 0.32) = 7.4 %

Outcome                 R          (R- r )^2             P×(R- r )^2  

Recession              9              2.56                1.74

Boom                     4             11.56               <u>  3.70 </u>

Total                                                           <u>  5.44 </u>

Variance = Sum of  P×(R- r )^2  

    Variance = 5.44

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Answer:

1. Dr Cash $10,900

Cr Sales $10,000

Cr Sales Taxes Payable $900

2. Dr Cost of Goods Sold $8,000

Cr Merchandise Inventory $8,000

3. Dr Sales Taxes Payable $900

Cr Cash $900

Explanation:

1. Preparation of the journal entry to record the cash sale and 9% sales tax

Dr Cash $10,900

($10,000+$900)

Cr Sales $10,000

Cr Sales Taxes Payable $900

($10,000*9%)

(To Record the cash sale and 9% sales tax)

2. Preparation of the Journal entry to record the cost of September 30th sales

Dr Cost of Goods Sold $8,000

Cr Merchandise Inventory $8,000

(To Record the cost of September 30th sales)

Preparation of the journal entry to show Dextra sending the sales tax on this sale to the government on October 15

Dr Sales Taxes Payable $900

Cr Cash $900

($10,000*9%)

(Being the sales tax on the sale to the government on October 15)

3 0
2 years ago
aylorism implies low-trust relations between employer and employees. therefore, direct control is needed to ensure that labor po
weqwewe [10]

Taylorism suggests low levels of trust between an employer and their workforce. To ensure that labor power purchased is converted into labor performed, direct control is therefore required. Managers are urged by this control question to identify methods of enforcing workers what they should do, how to perform it, within what parameters, and how quickly, and assess employee performance and impose penalties.

<h3>What is Taylorism in scientific management?</h3>

As a manager of mechanics, Frederick Taylor created the Taylorism tenet in order to achieve the most effective workplace practices.

Taylorism is a scientific management approach that divides up the many activities inside an organization so that workers can accomplish tasks as quickly as feasible. Therefore, the fundamental tenets of Taylorism as a scientific management system are best summarized as effective administration of workers and the requirement to take into account psychological and social factors as well as technical ones. It was developed as an industrial management philosophy in the nineteenth century to boost productivity. To do this, every stage of the industrial manufacturing process needs to be dissected, allowing for more specialized and efficient production.

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8 0
1 year ago
George Company has a relevant range of​ 150,000 units to​ 400,000 units. The company has total fixed costs of​ $527,000. Total f
Anestetic [448]

Answer: $0.54

Explanation:

Total cost = Fixed cost + Variable cost

$622,500 = $527,000 + Variable cost

Variable cost = $622,500 - $527,000

Variable cost = $95,500

Variable cost per unit will be calculated as the variable cost divided by the production unit. This will be:

= $95,500/176,000

= $0.54

The variable cost per units is $0.54.

8 0
3 years ago
The point where P1 and Q1 intersects represents the
Lena [83]
Good evening, Benedettoanna24!

The point where P1 and Q1 intersects represent the equilibrium (Q) price, a price that represents the same amount of supply and demand in the market of that product.

I hope this answer has satisfied your needs, and if you have anymore questions, feel free to ask. Have a good night!
5 0
3 years ago
​Mercer, Inc. provides the following data for​ 2019: Net Sales Revenue Cost of Goods Sold The gross profit as a percentage of ne
Setler [38]

The question is incomplete as it is missing the figures. The complete question is,

Mercer, Inc. provides the following data for​ 2019:

Net Sales Revenue 598000

Cost of Goods Sold 350000

The gross profit as a percentage of net sales is​ ________. (Round your answer to two decimal​ places.)

Answer:

Gross profit as a percentage of net sales = 0.4147 or 41.47%

Explanation:

The gross profit is a profit earned by a business through its trading activity. It is calculated by deducting the cost of goods sold from the net sales revenue and it is the profit earned by a business before deducting any operating and non operating expenses of the business.

Gross profit = Net Sales - Cost of goods sold

Gross Profit = 598000 - 350000   = $248000

The gross profit as a percentage of net sales is,

Gross profit as a percentage of net sales = Gross profit / Net Sales

Gross profit as a percentage of net sales = 248000 / 598000

Gross profit as a percentage of net sales = 0.4147 or 41.47%

5 0
3 years ago
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