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2 years ago

Now we will focus on Risk in a Portfolio Context.

Business

1 answer:

ololo11 [35]2 years ago

8 0

Answer:

See explanation below

Explanation:

Correlation Coefficient - The degree of the relationship between two variables.

Correlation - The tendency of two variables to move together.

Capital Asset Pricing Model - This represent the return that reflects risk remaining after diversification.

Market Portfolio - A portfolio consisting of all stocks.

Expected Return on a Portfolio - This represents the weighted average of the expected returns on individual components.

Market Risk Premium - The difference between the market rate of return and the risk free rate

Beta - The variable that shows the extent to which a stock’s return moves up or down with the market.

S&P 500 is empirically used to measure Beta

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Wildhorse Co. incurred research and development costs in 2018 as follows:

vazorg [7]

Answer:

d. $2,950,000

Explanation:

The computation of amount of research and development costs charged is shown below:-

Amount of research and development costs = Direct materials + Personnel cost + Consulting fee paid to outsiders + Indirect costs + Depreciation

= $995,000 + $795,000 + $345,000 + $270,000 + $545,000

= $2,950,000

Therefore for computing the amount of research and development costs we simply applied the above formula.

8 0

3 years ago

Uncollectible accounts; allowance method estimating bad debts as percentage of net sales vs. direct write-off method [LO7-5, 7-6

worty [1.4K]

Answer:

1. Bad debt expense = $97,500

2. Accounts receivable written off = $109,500

3. Bad debt expense for 2021 = $109,500

Explanation:

Bad debts expense refers to an uncollectible accounts expense that occurs because goods or services are delivered on credit a company to a customer who did not paid the amount owed.

The questions can be answered as follows:

1. What is bad debt expense for 2021 as a percent of net credit sales?

Under this, bad debt can be calculated using the following formula:

Bad expense = Net credit sales * Estimated bad debt percentage ....... (1)

Where;

Net credit sales = $6,500,000

Estimated bad debt percentage = 1.50%

Substituting the values into equation (1), we have:

Bad debt expense = $6,500,000 * 1.50% = $97,500

2. Assume Ervin makes no other adjustment of bad debt expense during 2021. Determine the amount of accounts receivable written off during 2021.

This can be calculated using the following formula:

Accounts receivable written off = Beginning uncollectible balance + Bad debt expenses - Ending uncollectible balance ............ (2)

Where;

Beginning uncollectible balance = $62,000

Bad debt expenses = $97,500

Ending uncollectible balance = $50,000

Substituting the values into equation (2), we have:

Accounts receivable written off during 2021 = $62,000 + $97,500 - $50,000 = $109,500

3. If the company uses the direct write-off method, what would bad debt expense be for 2021?

Under the direct write-off method, the exact amount of uncollectible accounts as they are specifically identified are recorded.

Based on this explanation, bad debt expense for 2021 is equal to the accounts receivable written off during 2021 calculated in part 2 above. Therefore, we have:

Bad debt expense for 2021 = $109,500

7 0

3 years ago

Crane Corporation acquires a coal mine at a cost of $404,000. Intangible development costs total $101,000. After extraction has

Svet_ta [14]

Answer:

The journal entry to record depletion is :

Debit : Depletion Expense $74,235

Credit : Accumulated Depletion $74,235

Explanation:

Depletion Expense = Depletion rate × units extracted during the year

where,

Depletion rate = (Cost - Salvage Value) ÷ Estimated total units

Therefore,

Depletion rate = ($404,000 + $101,000 + $80,800 - $161,600) ÷ 4,040 tons

= $ 105 per ton

Therefore,

Depletion Expense = $ 105 per ton × 707 tons

= $74,235

Journal Entry :

Debit : Depletion Expense $74,235

Credit : Accumulated Depletion $74,235

8 0

2 years ago

Suppose that the supply function for honey is p=S(q)=0.4q+2.8, where p is the price in dollars for an 8-oz container and q is

Ivanshal [37]

Answer:

The demand function is p= (-2.1)*q + 15.3

Explanation:

The supply function for honey is p=S(q)=0.4*q+2.8, where p is the price in dollars for an 8-oz container and q is the quantity in barrels. The equilibrium price is $4.80. So, the equilibrium quantity is:

4.80=0.4*q+2.8

Solving:

4.80 - 2.8=0.4*q

2=0.4*q

2÷0.4= q

5=q

The demand function, assuming it is linear, is p=m*q+b

The equilibrium quantity is 5 barrels and the equilibrium price is $4.80; and the demand is 4 barrels when the price is $6.90. So:

$\left \{ {{4.80=m*5+b} \atop {6.90=m*4+b}} \right.$

Isolating the variable "b" from the first equation, you get:

4.80 - m*5= b

Replacing the previous expression in the second equation you get:

6.90=m*4 + 4.80 - m*5

6.90 - 4.80=m*4 - m*5

2.1= (-1)*m

2.1÷(-1)= m

-2.1=m

Replacing the value of "m" in the expression 4.80 - m*5= b you get:

4.80 - (-2.1)*5= b

Solving you get:

15.3= b

So, the demand function is p= (-2.1)*q + 15.3

3 0

3 years ago

Japan Company produces lamps that require 3 standard hours per unit at a standard hourly rate of $12.00 per hour. Production of

coldgirl [10]

Answer:

(a) rate variance = $ 5,234, Adverse

(b) time variance = $ 6,360, Favourable

Explanation:

(a) rate variance,

rate variance = (Standard Rate - Actual Rate) × Actual Hours

=( $12.00- $12.20) × 26,170 hours

= $ 5,234, Adverse

(b) time variance, and

time variance = (Standard Hours - Actual Hours) × Standard Rate

= (26,700 hours - 26,170 hours) × $12.00

= $ 6,360, Favourable

total cost variance = rate variance + time variance

= $ 5,234, Adverse + $ 6,360, Favourable

= $1,126, Favourable

4 0

3 years ago