A demand schedule is a chart that shows the demand for a type of product at various prices.
Answer:
14.58%
Explanation:
The computation of the simple rate of return is shown below:
As we know that
Simple rate of return = Annual net income ÷ Initial investment
where,
Initial investment is $32,000
And, the annual net income is
= $6,800 - ($32,000 ÷ 15 years)
= $4,667
So, the simple rate of return is
= $4,667 ÷ $32,000
= 14.58%
We simply applied the above formula
Answer:
Cost of land = $519,000
Explanation:
<em>According to International Accounting Standards (IAS) 16, property plants and equipments, the cost of land includes all of the cost necessary to bring and make it ready for the intended use. </em>
<em>These costs include purchase cost, fees and commission associated with the purchase transaction. </em>
<em>Further more, included in the historical cost are the net demolition cost of old structure to prepare the land for use. Net cost here means cost of demolition less any incidental proceed from the old structure.</em>
Note that all the costs incurred by FVI as reported all fall into the above definition of cost of land.
Therefore the cost of the land would be
=460,000 + 26,000 + 1,600+ 5,400 + 26,000
= $519,000
Answer:
The answer is A.
Explanation:
Present Value is a value of tomorrow's worth of money.
Present Value is when the future of money is discounted using a discount rate or rate of expected returns.
It is the amount of money that must be invested now to generate a target future amount.
Because it is discounting future value, present value is usually lower than future value.
It is not usually the sum of a series of payment. Money is paid now.
Answer and Explanation:
The computation is shown below:
a. For expected return
As we know that
Expected return = Probability × Rate of return
The same formula applies for all of the given stock
For Boom it is
= 0.4(0.21) + 0.4(0.36) + 0.2(0.55)
= 0.33
For Normal it is
= 0.4(0.17) + 0.4(0.13) + 0.2(0.09)
= 0.13
For Bust
= 0.4(0.00) + 0.4(-0.28) + 0.2(-0.45)
= - 0.20
So, the expected rate of return is
= 0.25(0.33) + 0.60(0.13) + 0.15(-0.20)
= 0.1305
Now the variance is
= 0.25 × (0.33 - 0.1305)^2 + 0.60 × (0.13 - 0.1305)^2+ 0.15 × (-0.20 – 0.1305)^2
= 0.053
Now the standard deviation is
= [0.053]^1/2
= 0.23
b. Risk premium is
= E(Rp) – Rf
= 0.1305 - 0.038
= 0.0925
c. Expected real return is
= 0.1305 - 0.035
= 0.0955
The Expected real risk premium is
= risk premium - inflation rate
= 0.0955 - 0.035
= 0.0605
We simply applied the above formulas
