Answer: 8%
Explanation:
The expected return is a weighted average of the returns given the probability of certain states of the economy:
= (Prob. of boom * return if boom) + (Prob. of normal * return if normal) + (Prob. of weak * return if weak)
= (20% * 35%) + (50% * 14%) + (30% * -20%)
= 0.07 + 0.07 - 0.06
= 8%
Answer:
This indicates that
d.the company has a net loss of $9,575 for the period.
Explanation:
a) Data and Calculations:
Total debits of the balance sheet (assets) = $28,480
Total credits of the balance sheet (liabilities + equity) = $38,055
Difference (net loss) = $9,575 ($38,055 - $28,480)
b) With the determination of the net loss of $9,575, the two sides (debits and credits) of the balance sheet will equal. This is because the net loss of $9,575 will reduce the credits from $38,055 to $28,480.
Answer: d. $579.44
Explanation:
Dividends from Essentia Inc.
= 66*$1.79
= $118.14
Dividends from SFT Legal
= 95*$2.62
=$248.90
Dividends from Grath Oil
=180*$1.18
=$212.4
Total Dividends
=$118.14 + $248.90 + $212.4
=$579.44
Darryl's total Dividends each year amounts to $579.44
Answer:
Total work in process = $12,900
Explanation:
Provided information,
Cost incurred during the month on this order
Direct Materials = $2,100
Direct Labor = $3,600
Provided overheads are 200% of the direct labor cost = $3,600 
200% = $7,200
Thus month end balance of work in process = $2,100 + $3,600 + $7,200
Total work in process = $12,900
Note: additional information regarding expenses to be incurred is to be ignored, and the above value is the value of work in process.
Total work in process = $12,900
Answer:
The expected return on security with a beta of 0.8 is closest to 7.2%.
Explanation:
This can be determined as follows:
Since the return of security Z remains at 4% despite the change in the market, security Z is the risk-free asset.
Note that a risk free asset is an asset which its returns does not change with change in the market.
Using the Capital Asset Pricing Model (CAPM) formula, we have:
Er = Rf + (B * MPR) ............................................ (1)
Where;
ER = Expected return = ?
Rf = Risk-free rate = Rate of return of security z = 4%
B = Beta = 0.8
MPR = Market risk premium = Expected return on the market rate - Risk-free rate
Expected return on the market rate = (50% * 24%) + (50% *(-8%)) = 8%
Therefore, we have:
MPR = 8% - 4% = 4%
Substituting the values into equation (1), we have
Er = 4% + (0.8 * 4%)
Er = 0.072, or 7.2%
Therefore, the expected return on security with a beta of 0.8 is closest to 7.2%.
