Answer:
b. $90,000 with a $10,000 loss carryover
Explanation:
Given that
Active business income = $90,000
From Activity A, the income earns = $20,000
From Activity B, the loss incurs = $30,000
So by considering the above information, the Adjusted gross income should be
The $90,000 should be recorded
Plus, the $10,000 loss should also be carryover
The $10,000 loss is come from
= $20,000 - $30,000
= -$10,000
Answer:
a. not able to be determined from the provided information.
Explanation:
For determining the over applied or under applied, first, we have to compute the predetermined rate based on the direct material cost which is
= $700,000 ÷ $1,000,000
= $0.70
Now the applied overhead is
= $0.70 × $1,200,000
= $840,000
And, the actual overhead amount is not given by which we can find out the underapplied or overapplied overhead amount
So, in this case, the correct option is a.
Answer:
The 1-year HPR for the second stock is <u>12.84</u>%. The stock that will provide the better annualized holding period return is <u>Stock 1</u>.
Explanation:
<u>For First stock </u>
Total dividend from first stock = Dividend per share * Number quarters = $0.32 * 2 = $0.64
HPR of first stock = (Total dividend from first stock + (Selling price after six months - Initial selling price per share)) / Initial selling price = ($0.64 + ($31.72 - $27.85)) / $27.85 = 0.1619, or 16.19%
Annualized holding period return of first stock = HPR of first stock * Number 6 months in a year = 16.19% * 2 = 32.38%
<u>For Second stock </u>
Total dividend from second stock = Dividend per share * Number quarters = $0.67 * 4 = $2.68
Since you expect to sell the stock in one year, we have:
Annualized holding period return of second stock = The 1-year HPR for the second stock = (Total dividend from second stock + (Selling price after six months - Initial selling price per share)) / Initial selling price = ($2.68+ ($36.79 - $34.98)) / $34.98 = 0.1284, or 12.84%
Since the Annualized holding period return of first stock of 32.38% is higher than the Annualized holding period return of second stock of 12.84%. the first stock will provide the better annualized holding period return.
The 1-year HPR for the second stock is <u>12.84</u>%. The stock that will provide the better annualized holding period return is <u>Stock 1</u>.
Answer:
D) Stock prices of companies that announce increased earning in January tend to outperform the market in February.
Explanation:
The above is consistent with the Efficient Market Hypothesis. All others are a direct contravention.
<em>The efficient market hypothesis (EMH), also known as the efficient market theory, is a hypothesis that states that the prices of shares contain all information and that consistent alpha generation is impossible.</em>
According to the hypothesis, stocks always trade at their fair value on exchanges, making it impossible for investors to purchase undervalued stocks or sell stocks for inflated prices.
This means that it should not be possible to outperform the overall market through professional stock selection or market timing.
The only way according to EMH that an investor can obtain better returns is by purchasing riskier investments.
By implication, this also means that it is not possible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.
You would note that in the option D, earning (which is a key driver for demand of stock) is announced in one month. The natural reaction would be for the demand for that stock to surge in the next month.
