Answer:
The correct answer is b) The first tranche has the highest prepayment risk.
Explanation:
A collateralized mortgage obligation (CMO) is a type of security backed by mortgage. It is comprised of a pool of mortgages that are bundled together and sold as an investment. Prepayment risk is the risk of loss of interest income due to early repayment of the principal by the borrower.
In the given situation, there are three tranches. The first tranche has the highest prepayment risk because it is receiving principal at the earliest. Hence, there is more of a chance of this principal being returned early and the CMO holder losing out on potential interest. Therefore, the prepayment risk of the first tranche is the highest among all three tranches.
Answer:
Variable cost per unit= $1.4 per unit
Explanation:
Giving the following information:
Miles Driven Total Cost Miles Driven Total Cost
January: 8,000 $14,120
March: 8,550 $14,979
February: 7,490 $13,495
April: 8,195 $14,490
To calculate the variable cost under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (14,979 - 13,495) / (8,550 - 7,490)
Variable cost per unit= $1.4 per unit
Answer:
See below
Explanation:
Net income during the year
$59,000
Adjustments:
Depreciation
$27,000
Changes in current assets and liabilities
Less:
Increase in accounts receivables
($32,000)
Increase in inventories
($12,000)
Decrease in accounts payable
$25,000
Net cash flow from operating activities
$17,000
Answer:
1. (e) Salary
2. (a) Cost
3. (f) Net pay
4. (b) Employee benefits
5. (d) Rewards
6. (c) Deduction
7 . (g) occupation
Explanation:
Salary refers to the consideration paid periodically for the services received from an employee.
Cost refers to the price which is incurred or paid to own, possess, manufacture or attain something.
Net pay refers to the gross pay less tax deductions and provident fund contribution, which the employee actually receives or in hand, take home salary.
Employee benefits refer to staff welfare schemes, the provident fund contribution by the employer, employee health insurance and retirement benefits.
Rewards refer to incentives and commission which are paid in addition to the salary, as a means for employee motivation and to appreciate employee's good performance.
A deduction refers to tax deductions and other contribution deductions which are subtracted from the salary. For e.g the amount deducted for the conveyance provided to employees by the employer.
Occupation refers to an activity or work which generates income and serves as a means of earning a living.