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MAXImum [283]
3 years ago
13

During September, the capital expenditure budget indicates a $520000 purchase of equipment. The ending September cash balance fr

om operations is budgeted to be $67000. The company wants to maintain a minimum cash balance of $35000. What is the minimum cash loan that must be planned to be borrowed from the bank during September?
Business
2 answers:
wariber [46]3 years ago
7 0

Answer:

$488,000

Explanation:

He capital expenditure balance indicates a $520,000 purchase of equipment.

September ending cash balance is budgeted at $67,000

The company wants to maintain a minimum cash balance of $35,000

Therefore the minimum cash loan to be borrowed from the bank can be calculated as follows

= $520,000-$67,000+$35,000

= $488,000

Hence, the minimum cash loan that must be planned to be borrowed from the bank during September is $488,000

alexgriva [62]3 years ago
7 0

Answer:

the minimum cash loan that must be planned to be borrowed is $418,000.

Explanation:

The Cash Budget is prepared to highlight times for cash surpluses - allowing arrangements for investments of those surpluses to gain maximum return.

The Cash Budget also highlight times for Cash deficit - allowing for short term alternative sources of finance.

<u>September Cash Budget Reconciliation :</u>

Purchase of Equipment                 $520,000

<em>Less </em>Cash Balance                          ($67,000)

<em>Less</em> Minimum Cash Balance         ($35,000)

Budgeted Loan Balance                 $418,000

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You have been managing a $3 million portfolio. The portfolio has a beta of 1.10 and a required rate of return of 10%. The curren
riadik2000 [5.3K]

Answer:

The Required rate of return on Portfolio is 9.67%

Explanation:

In order to get the answer first we need to calculate the new beta of portfolio.  The weight of portfolio and new stock is calculated using total value of investment in portfolio and multiplying by the total investment we get new beta.  

(3M / 3.6M) x 1.10 + (0.6M / 3.6M) x 0.60 = 1.01667

Through using the CAPM Model we get risk premium of Existing Portfolio:

Required rate of return of portfolio = RF + ( Rm - RF ) x beta

10% = 5.6% + (Rm -RF) x 1.10

10% - 5.6% = (Rm - RF) x 1.10

4.4% / 1.10 = (Rm - RF)

(Rm - RF) = 4%

After getting the Risk Premium we can CAPM model equation to get New Required rate of return.

Required rate of return of portfolio = RF + ( Rm - RF ) x beta

Required rate of return of portfolio = 5.6% + 4% x 1.01667

Required Rate of Return of Portfolio = 9.67%

8 0
3 years ago
During 2010, raines umbrella corp. had sales of $850,000. cost of goods sold, administrative and selling expenses, and depreciat
I am Lyosha [343]
To calculate: 
1) Net income (loss) for 2010.
 2) Operating cash flow 
 Solution: 1)
 Sales = $850000
 Less: Cost of goods sold = $610000
  Gross profit = $240000
 Less: Administrative and selling expenses = $110000 
 Earning before Interest, Tax and Depreciation = $130000
 Less: Depreciation = $140000
  Earning before Interest and Tax (EBIT) = ($10000)
 Less: Interest expense = $85000
  Earning before tax (EBT) = ($95000)
 Less: Tax = $0 (as company is having negative EBT or loss hence no tax)

 
 Net loss = $95000  
 2) Operating cash flow 
 EBIT + Depreciation - Tax 
 Wherein, EBIT = Earning before Interest and Tax
  ($10000) + 140000 - 0 = $130000
4 0
3 years ago
How long does it take to become a​ millionaire? A ​$500,000 investment will hit​ $1 million in 39 years at an annual interest ra
Solnce55 [7]

Answer:

It will take 30.10 year

Explanation:

We have given initial investment $500000

Future value = $ 1 million = $1000000

Rate of interest r = 1.79 %

We have to find the time taken to reach the amount $1000000

We know that future value is equal to A=P(!+\frac{r}{100})^n

1000000=500000(!+\frac{1.79}{100})^n

2=(1.0179)^n

Taking log both side

log2=nlog1.0179

n×0.0077 = 0.3010

n = 39.09 year

Now in second case rate of interest

r = 2.34 %

So 1000000=500000(1+\frac{2.34}{100})^n

2=(1+\frac{2.34}{100})^n

2=1.0234^n

taking log both side

log 2 = n log 1.0234

n×0.01 = 0.3010

n = 30.10 year

8 0
3 years ago
A stockbroker predicts whether a stock will go up or down by tossing a coin and so has a 50% chance of making a correct predicti
kolezko [41]

Answer:

A skilled  broker will be right at  60% of time compared to 50%

Explanation:

Solution

Given that:

Now,

Let X  be represented as = number of correct predictions/outcomes

X foll binomial distribution with n = 3 and p = 0.5 for broker who use a toss coin

Thus,

P(X = 3) = p^3 = 0.5^3 which gives us  = 0.125

So,

For a skilled broker, Y goes with the binomial distribution with n = 3 and p is = 0.6

Then,

P(Y = 3) = 0.6^3 = 0.216

We can therefore conclude who is skilled broker by making large number of observations

Hence, we say that a skilled broker will be correct 60% of time compared to 50% .

8 0
3 years ago
"_____ are groups of concerned citizens who band together to try to influence the business practices of specific industries, bus
Nastasia [14]

Advocacy groups are groups of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions.

Explanation:

Advocacy groups are important components of consumer rights in the capitalistic market and are essential for maintaining good business practices in the capitalistic society where competition can take a hold over the moral situation that should in  a sense dominate.

The advocacy groups that work this way are the ones who are a group of concerned citizens who band together to try to influence the business practices of specific industries, businesses, and professions. This is important for consumer rights for this sector to be strong.

5 0
2 years ago
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