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pochemuha
3 years ago
5

You are considering purchasing stock S. This stock has an expected return of 12 percent if the economy booms, 8 percent if the e

conomy is normal, and 3 percent if the economy goes into a recessionary period. The overall expected rate of return on this stock will: a. be equal to one-half of 8 percent if there is a 50 percent chance of an economic boom.b. vary inversely with the growth of the economy.c. increase as the probability of a recession increases.d. be independent of the probability of each economic state occurring.e. increase as the probability of a boom economy increases.
Business
1 answer:
Ymorist [56]3 years ago
7 0

Answer:

e. increase as the probability of a boom economy increases.

Explanation:

The most economic growth occurs when the economy is in boom state. This results in the highest rate of return on investments compared to all other states such as normal, recession. In this case, if the probability of boom economy increases, stock S will have an overall increase in expected return; it means that there is higher chance of earning 12% return which is the highest among those in other economy states. This makes choice E correct.

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I hope I understood the question and that this helps.

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3 years ago
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Cheshire Corporation purchases a machine for​ $125,000. It has an estimated salvage value of​ $10,000 and is expected to produce
densk [106]

Answer: <u><em>Depreciation for the first year = 17825</em></u>

Explanation:

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Salvage value of​ $10,000

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First, we'll evaluate depreciation per unit over the entire life of the machine:

i.e. Depreciation\ per\ unit = \frac{ Purchasing\ cost - Salvage\ value}{Total\ units\ produced}

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Now, we'll compute the depreciation for the first year:

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<u><em>Depreciation for the first year = 17825</em></u>

7 0
3 years ago
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VJasper Company has sales on account and for cash. Specifically, 70% of its sales are on account and 30% are for cash. Credit sa
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Answer:

                                              April             May              June

Cash Sales             30%    $157,500     $160,500      $168,000

Sales on account   70%    <u>$367,500</u>    <u>$374,500</u>      <u>$392,000</u>

                                          <u>$525,000</u>    <u>$535,000</u>     <u>$560,000</u>

<u />

<u> </u>

                                        JASPER COMPANY

                                     Cash Receipts Budget

                                   For April, May and June

                                                                 April          May          June

<em>Cash Receipts from:</em>

Cash Sales                                         $157,500    $160,500   $168,000

Collection of accounts Receivable  <u><em>$400,000   $367,500   $374,500</em></u>

Total Cash Receipts                          <u>$557,500</u>   <u>$528,000</u>  <u>$542,500</u>

8 0
2 years ago
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