Answer:
Assuming that no changes happened, 2020 sales and expenses should be similar to 2019's:
Total Per unit
Total sales $1,842,400 $28
Variables costs <u>($1,184,400)</u> <u>($18)</u>
Contribution margin $658,000 $10
Fixed costs <u>($498,000)</u> <u>($7.57)</u>
Operating income $160,000 $2.43
Answer: The following would the accountant do related to the compilation engagement: <u><em>Issue a compilation report even though review procedures were performed on the engagement.</em></u>
Under Statements of Standards for Accounting and Review Services (SSARS), the accountant decided to perform some analytical procedures.
<u><em>Therefore, the correct option is (d)</em></u>
The question is incomplete. Here is the complete question.
Caribou Gold Mining Corporation is expected to pay a dividend of $6 in the upcoming year. Dividends are expected to decline at the rate of 3% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of Caribou Gold Mining Corporation has a beta of .5. Using the constant-growth DDM, the intrinsic value of the stock is _________. A. $150 B. $50 C. $100 D. $200
Answer:
$50
Explanation:
Caribou Gold mining corporation is expected to make a dividend payment of $6 next year
Dividend are expected to decline at a rate of 3%
= 3/100
= 0.03
The risk free rate of return is 5%
= 5/100
= 0.05
The expected return on the market portfolio is 13%
= 13/100
= 0.13
The beta is 0.5
The first step is to calculate the expected rate of return
= 0.05+0.5(0.13-0.05)
= 0.05+0.5(0.08)
= 0.05+0.04
= 0.09
Therefore, the intrinsic value of the stock using the constant growth DDM model can be calculated as follows
Vo= 6/(0.09+0.03)
Vo= 6/0.12
Vo= $50
Hence the intrinsic value of the stock is $50
Answer:
16 cupcakes
Explanation:
U(C, M) = C⁰°⁵ x M⁰°⁵ = √C x √M
total utility obtained by eating 16 cupcakes and 4 muffins = √16 x √4 = 4 + 2 = 6
since the bakery is out of muffins, then utility function = √C x √2 = √C x 1.4142
√C x 1.4142 = 6
√C = 6 / 1.4142 = 4.2426
C = 4.2426² = 18
since there were 2 cupcakes left, Christopher must purchase 18 - 2 = 16 cupcakes