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adell [148]
4 years ago
8

The average difference in earnings, spread out over a working career, between someone who has a college degree and someone who d

oes not, totals about: A. $0 B. $450,000 in today's dollars C. $52,671 in today's dollars D. $36,645 in today's dollars
Business
2 answers:
garik1379 [7]4 years ago
6 0
<span>It's gotta be B. $450,000</span>
marin [14]4 years ago
6 0

D is wrong!!!!

I just took this test.

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You are attempting to value a call option with an exercise price of $109 and one year to expiration. The underlying stock pays n
Ivenika [448]

Answer:

The value of the call option today is $14.29

Explanation:

The two-state stock pricing model is one that prices are based on the assumption that there is no arbitrage profit opportunity as well as the fact that the call option's value will be the present value(PV) of the expected future winnings for long call.

Now, value of the call option if the prices go up will be;

142 - 109 = $32

While if the prices go down, it will be;

76 - 109 = -$33

The call option in this case can only be utilized when the market value exceeds the exercise price.

Therefore, the expected winnings value after one year will be;

Value after one year = (32 × 0.5) + (0 × 0.5)

Value after one year = $16

We used 0 in the multiplication because the call wouldn't be utilized for when the prices go down.

one year from now the long call can be expected to earn $16 .

Thus, today the present value of this amount will be the price of the call option if we take into cognizance that here will be no arbitrage profit opportunity.

With risk-free rate of interest is 12%, we have;

PV = 16/1.12 = $14.29

3 0
3 years ago
A tax on the buyers of personal computer external hard drives encourages:_________.
dezoksy [38]

Answer:

Option B. Buyers to demand a smaller quantity at every price

Explanation:

The reason is that the computer product price has been increased from the previous price due to imposition of tax on it and as we know that the higher prices will decrease the demand of the product and as a result the buyers are less likely to buy the product as it is now priced high.

3 0
4 years ago
CarPro is an automobile dealer selling only new cars. CarPro sells three types of vehicles: sedans, SUVs and trucks. CarPro plac
netineya [11]

Answer:

14 truck and 1 suv produce 21,800 profit

Explanation:

We have to solve for the contribution margin considering the constraing resourse which, is the ordering cost:

\left[\begin{array}{cccc}&sedan&SUV&truck&\\$NRV&19000&21850&20425&\\$Cost&-18000&-20500&-19000&\\$CM&1000&1350&1425&\\$Constrain resource&18000&20500&19000&\\$CM per constrain&0.05556&0.0659&0.075&\\\end{array}\right]

The card models revenue is calcualted using the net realizable value for each card, which is their sales price less the 5% sales commission.

Then we solve for how many truck will it purchase:

300,000 / 19,000 = 15,78

So the company will purchase 15 trucks

giving 15 x 1,425 = 21,375

This will require 2.5 x 15 = 37.5 hours thus 5 sales man (40 labor)

This creates 2.5 hours unsured

and also 300,000 - 15,000 x 19,000 = 15,000 dollar which are not productive

So, we will try to make a better use to purchase the SUV which is the second best option instead of the 15th truck:

giving 14 x 1,425 + 1350 = 21,300

we subtract the 500 dollar of sales man and get a 21,800 profit

with less unproductive dollar. So this will be the answer

7 0
4 years ago
An investor is long 300 shares of CTS stock and short 30 CTS May calls. This position can best be described as A) a credit sprea
tamaranim1 [39]

Answer:

D) a long stock, short call hedge with a limited loss potential.

Explanation:

When you use a short call to hedge a long call, it is called a covered call. In this case, the covered call is used to hedge against possible decreases in the price of the stocks. Since the long call was made, we can assume that the investor believes that it is more likely that the price of the stocks will increase.

5 0
4 years ago
Masterlink Co., in applying the lower of cost or market method, reports its inventory at net realizable value. Which of the foll
nasty-shy [4]

Answer:A. Cost is greater than net realisable value(NRV)

Explanation:

An inventory should not be higher than the price its sale or use and this requires the comparison of inventory cost to it's ( NRV) and whichever is lower will be used as cost of inventory

NRV= Sales price less cost to completion and less estimated cost necessary to make the sales.

4 0
3 years ago
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