Answer:
Review labor costs downwards
Explanation:
Janet and Omar should consider revising their budget for labor downwards. In the current state, labor costs are $1000, which is approximately 57 percent of all costs. As a rule of thumb, labor costs should be between 25 to 35 percent of total costs. This implies that Janet and Omar's labor costs are very high in relation to the other costs.
Janet and Omar should aim for a profit. Ideally, a 25 to 30 percent profit is a good target for such a business. For this to happen, they need to cut down labor to between $300 to a maximum of $400.
If a customer sells short 100 xyz at 79 and simultaneously writes 1 xyz jan 80 put at 5, the maximum gain potential is: 400.
<h3>What is maximum gain potential/capital gain?</h3>
When an investor invests in or sells put option on stocks she owns, she is selecting a good approach to hedge against loss or bring additional funds in her account. Whenever a seller invests cover call options, this is the most frequent form.
Now according to the question-
- A short stock with such a short puts is an income strategy with unlimited loss potential.
- Although the customer will profit if the price falls, the customer signed an in-the-money put that would be exercised, requiring the client to acquire stock at 80 for a $100 loss here on stock shorted at 79.
- However, the customer collected $500 in premiums, for a total gain of $400.
- The break even point for a brief stock-short put is the short sale price plus the premium.
- In this scenario, the break-even point is 84, and the maximum gain is four points, between 84 to 80.
Therefore, the maximum gain potential is 400.
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The Effects of the Advance Payment (Receipt) on Lark Bell's Year 1 Financial Statements are:
Balance Sheet
Assets = Liabilities + Equity
Cash +$36,000 = Unearned revenue +$15,000 + Service Revenue +$21,000
Income Statement Cash Flow
Revenue - Expense = Income Statement
Service Revenue +$21,000 Cash inflow +$36,000 OA
In Year 1, the Assets (Cash) will increase by $36,000. There is a corresponding increase in Liabilities (Unearned Revenue) of $15,000 and an increase in Equity (Service Revenue) of $21,000.
Thus, the amount of revenue that Bell would recognize on the Year 2 income statement from this transaction in Year 1 is $15,000. This covers 5 months from January to May.
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Answer:
To find the present value of the interest payments, multiply <u>$3,000</u> by the present value factor <u>8.1109</u>.
Explanation:
the market price of the bonds:
- present value of face value = $100,000 / (1 + 4%)¹⁰ = $67,556.47
- present value of coupon payments = $3,000 x 8.1109 (PV annuity factor, 4%, 10 periods) = $24,332.70
market price = $91,889.17
Since the market rate is higher than the coupon rate, the bonds will be sold at a discount.
Answer:
See explanation below for answer.
Explanation:
When using the short run model, the capital stock is fixed and cannot adjust to changes in the demand for capital. We will be using the short run model to analyze the effect of immigration and inflation on the economy.
In an economy, the primary determinant of how immigration can affect wages and employment is the degree to which the workers who have newly arrived will replace or complement the existing workers.
The level of wages may drop in the short run for the kind of workers who can be easily replaced by immigrants, whereas the level of wages may rise for the workers whose expertise can be complemented by the new workers.
For instance, in a situation where foreign-born construction workers enter the labor market, thereby causing a decrease in construction workers’ wages. The firms will respond by employing more construction workers, and since additional first-line supervisors may be needed to supervise the activities of the expanded workforce, the demand and consequently, the wages of these complementary workers could increase.
Further, where the availability of low-skilled immigrants at lower wages allows businesses to expand, total employment will rise.
