Answer:
2 Days
Explanation:
First, there is the need to rewrite the utility function for clarity
U=V^{1/2}
1. The Probability of Falling ill by someone in the family is given as 20%
2. If someone should fall ill, the total number of days that would be spoiled is calculated as:
Total number of vacation= 10 days x Probability to fall ill = 20%
= 10 x 0.2 = 2 days
This means if someone should fall ill based on the probability, then 2 out of the total 10 days can be ruined
3. The number of days for vacation days to enjoy is 10-2 = 8 days
This means if the family gives up 2 days of probable illness, they can still enjoy their vacation.
V= 2 days
Answer:
The answer is $115.38
Explanation:
Solution
Given that
The annual dividend on preferred stock = $7.50
Required return on preferred stock+= 6.5%
The next step is to find at what price should the preferred stock sell which is given as follows:
The rice of preferred stock = 7.50/6.5%
= $115.38
$115.38 is the price at which the stock preferred was sold.
Answer:
Payne should exclude Salem's January 1, Year 1, Retained Earnings and income for January 1 to September 30 from consolidated Retained Earnings and consolidated income
Explanation:
The Retained Earnings of Salem on January 1, Year 1 and and its income during the period between January 1 and September 30 would not be included in the Year 1 consolidated financial statements.
The reason is that The Retained Earnings of Salem on January 1, Year 1 and and its income during the period between January 1 and September 30 are part of the equity of the shareholders that that Payne acquired on September 30, Year 1. They would then be eliminated in the eliminating entry of the consolidating investment.
This idea is most consistent with LAISSEZ FAIRE type of management in which the employees are allowed to use their ideas and creativity to flourish in their areas of specialization. The management takes a back seat role in the company and only offer guidance when needed.
