Question 19 of 20

You are considering an investment in a mutual fund with a 4% load and expense ratio of 0.5%. You can invest instead in a bank CD

alexira [117]

Answer:

r>8.68695%

Annual rate of return is r>8.68695%

Explanation:

The net return, the buyer will get= 1+r-0.005

Where:

r is the interest rate

0.005 is expense ratio (0.5%)

Let suppose $1 is invested, then the return after two years is as below:

$(1-0.04)*(1+r-0.005)^2$

Considering the annual compounding of returns, the compound interest on $1 for 2 years will be $(1+0.06)^2$

The fund portfolio earn for you to be better off is:

$(1-0.04)*(1+r-0.005)^2$ > $(1+0.06)^2$

$0.96*(r+0.995)^2>1.1236$

$0.96*(r^2+1.99r+0.990)>1.1236\\0.96r^2+1.9104r+0.9504-1.1236>0\\0.96r^2+1.9104r-0.173>0$

Solving the above equation, we will get:

r>0.0868695 r>-2.0768 (Ignore this value as it is -ve

r>8.68695%

Annual rate of return is r>8.68695%

3 0

3 years ago

Wilbur decides to sell his collection of rare stamps through an online auction site. When he is filling out the information abou

jasenka [17]

Answer:

Wilbur cannot rescind the contract based on his unilateral mistake.

Explanation:

Lets suppose that I made an offer of $1000 which you accepted to buy my car on a phone call for $1000 and later in the same day a person offered me more money for the same car and I sold the car to him. You went to court and I said that I mistakenly made an offer of $1000 which means that every person who revoke the clauses will make lame excuses in the court. If this act is permitted then the law gives the people free hand whatever they desire to do with the contract. So for this reason this act was considered unethical and the court said that the mistakes that are unilateral are not be rescind.

5 0

3 years ago

Estee Lauder Co.now sells most of its flagship products directly online. This choice, made around 2000, resulted in substantial

mario62 [17]

Answer: Vertical Supply Channel Conflict

Estee Lauder Co.now sells most of its flagship products directly online. This choice, made around 2000, resulted in substantial __________ with the various high-end retailers.

Horizontal supply chain conflict.

Vertical supply chain conflict.

Vertical channel dissonance.

Contract re-negotiations.

Explanation:

Vertical Supply Channel Conflict occurs between members of different supply channel levels. For example, between a manufacturer and a wholesaler or between a wholesaler and a retailer.

This is the type of conflict that arose from Estee Lauder's decision to sell online directly to customers.

Horizontal Supply Channel Conflict occurs between members of the same channel level. An example is two retailers selling the same brand in the same shopping mall.

6 0

3 years ago

The two main sources of stockholders' equity are a.net income retained in the business and dividends paid b.investments by stock

Lady_Fox [76]

Answer:C - investments by stockholders and net income retained in the business

Explanation: Stakeholders equity are the investments made by investors into the business plus any profit retained by the business.

Stakeholders equity can also be said to be the gross profit less all liabilities for a specified period. This also includes assets that the company owns.

It does not include dividend issued for the period as dividend is also a liability to the company.

7 0

3 years ago

White Company manufactures furniture. Assume the following information: Manufacturing overhead is allocated based on machine hou

Lorico [155]

Answer:

overhead rate: 15

applied overhead 30,000

underapplicatio for 1,000

Explanation:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

The manufacturing overhead rate is determinate by dividingthe total expected cost by a cost driver. In this case, the machine hours.

estimated cost 150,000

expected machine hours 10,000

predeterminate overhead rate = 150,000/10,000 = 15

Next, to allocate cost, we multiply the actual value fo the cost driver by the rate

actual machine hours x MO rate

2,000 x 15 = 30,000 applied overhead.

Last, we compare with the actual overhead to determinate over or underapplied overhead:

applied - actual

30,000 - 31,000 = -1,000

Thew overhead was underapplied, as the cost were for 31,000 but we only recognize 30,000

3 0

3 years ago