Answer:
The risk free rate is 3.325%
Explanation:
The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
- (rM - rRF) gives us the risk premium of market
We already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,
Let rRF be x.
0.1185 = x + 1.24 * (0.102 - x)
0.1185 = x + 0.12648 - 1.24x
1.24x - x = 0.12648 - 0.1185
0.24x = 0.00798
x = 0.00798/0.24
x = 0.03325 or 3.325%
Answer:
1. The Journal Entry
Sr. No Particulars Debit Credit
Tractor- Machinery $ 45000
Cash $6000
Notes Payable $ 39,000
The journal entry to record the acquisition of the tractor.
Working : Interest Expense Payable:
11% of 39,000= $ 4290
<u>2. Income Statement of 2021</u>
Revenues xxxxx
Less
Depreciation xxxxx
Interest Expense 4290
<u>Profit xxxx</u>
<u />
<u>2. Income Statement of 2022</u>
Revenues xxxxx
Less
Depreciation xxxxx
Interest Expense 4290
<u>Profit xxxx</u>
<u>3. Balance Sheet of 2021</u>
Debit Side
Truck $45000
<u>Less Depreciation xxxxx</u>
Credit Side
<u>Interest Payable 4290</u>
<u>3. Balance Sheet of 2022</u>
Debit Side
Truck $45000
<u>Less Depreciation xxxxx</u>
Credit Side
<u>Interest Payable 4290</u>
Answer:
Because not many members of a household may bring in enough money to sustain them all.
Explanation:
Answer:
The correct answer is D. externalities.
Explanation:
An externality is defined as that situation or group of situations that determine that a service good is not reflected at its real market price. In this example, the computer industry is so close that they do not know for sure the benefits they have when offering their goods, and it becomes an advantage in the sense that due to its close location it is possible to establish agreements to manage prices and not enter into direct market competition.