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White raven [17]
3 years ago
14

A benchmark market value index is comprised of three stocks. Yesterday the three stocks were priced at $16, $24, and $55. The nu

mber of outstanding shares for each is 640,000 shares, 540,000 shares, and 240,000 shares, respectively. If the stock prices changed to $20, $22, and $57 today respectively, what is the 1-day rate of return on the index
Business
1 answer:
tatyana61 [14]3 years ago
3 0

Answer:

The 1-day rate of return on the index = 5.36%

Explanation:

Index Value = Sum of (Outstanding Shares*Share Price)

      q          p           mv              q1            p1          mv1

640,000   16    10240000      640000    20     12800000

540,000   24   12960000      540000    22     11880000

240,000   55   <u>13200000</u>  240000    57     <u>13680000</u>

                        <u>36400000 </u>                                <u>38360000</u>

Note: q/q1 = no of shares, p = price per share, mv/mv1 = market value, p1 = changed price per share

Return = (Index Value Today - Index Value Yesterday)/Index Value Yesterday

Return = (38360000 - 36400000) / 36400000

Return = 0.05385

Return = 5.36%

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Luda [366]

Answer:

Allowable unit cost of a hydraulic valve using the target costing model = 52.4

Explanation:

Given that:

Simon Corporation manufactures hydraulic valves. The product life of a valve is 4 years.

Target average profit margin for Simon 20.00%

The company does not expect the manufacturing cost to vary over the next 4 years

Estimated sales volume and the unit selling price of the valve for the next 4 years is given below:

Year                  Sales volume (units)                   Unit selling price

Year 1                       40,000                                 $80.00

Year 2                      50,000                                 $75.00

Year 3                     35,000                                   $50.00

Year 4                      25,000                                  $45.00

The objective is to determine the allowable unit cost of a hydraulic valve using the target costing model.

The Cost for each unit selling price can be calculated as:

= unit selling price - (Target average profit margin × unit selling price)

For Year 1

=  $80.00- (0.2 × $80.00)

= $80.00 - $16.00

= $64.00

For Year 2

= $75.00 - ( 0.2 × $75.00)

= $75.00 - ( $15.00)

= $60.00

Year 3

= $50.00 - (0.2× $50.00)

= $50.00 - $10.00

= $40.00

Year 4

= $45.00 - (0.2 × $45.00)

=$45.00 - $9.00

= $36.00

Year       Sales volume    Unit                Cost          Cost per Unit

                (units)             selling price  

Year 1       40,000          $80.00          $64.00       $2560000

Year 2      50,000          $75.00          $60.00       $3000000

Year 3      35,000          $50.00          $40.00        $1400000

Year 4       25,000          $45.00         $36.00        $900000

Total:        150000                                                    $7860000

Allowable unit cost = Total cost/Total number of unit cost

Allowable unit cost = $7860000/150000

Allowable unit cost = 52.4

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The largest component of gdp is investment spending. is
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