Given:
Benefit from first policy = $20 million
Probability to get $20 million = 30%
Benefit from Second policy = $40 million
Probability to get $20 million = 70%
Find:
Expected value of the benefits:
Computation of expected value of the benefits:
Expected value of the benefits = Expected benefit from first policy + Expected benefit from Second policy
Expected value of the benefits = ($20 million × 30%) + ($40 million × 70%)
Expected value of the benefits = ($6 million) + ($28 million)
Expected value of the benefits = $34 million
Therefore, the expected value of the benefits from policies is $34 million.
Answer:
Price Earning Ratio = Price/Earnings = we use the general formula.
$100/$10 = 10 times
Explanation:
Price Earning ratio is calculated using the current market price of share and earnings per share of the company. In the given question there is no relevance of interest rate as this is not the cost of equity.
Price Earning Ratio tells how much earnings are required to meet the cost of 1 share.
Another formula for P/E ratio = 1/Cost of Equity. Since 12% is not cost of equity this formula cannot be used.
Also earnings per share is given assumed it is after interest cost if any.
Answer:
ABC Daycare
Effect of Performing Plumbing Services on account on the Accounting Equation:
Assets (Accounts receivable) will increase by $565 and Equity (Retained Earnings) will equally increase by $565
Explanation:
a) Data and Analysis:
Accounts receivable $565 Service Revenue $565
The accounting equation that equals assets to liabilities and equity is always true at all times and with every correctly posted transaction. It implies that assets are financed through the contributions made by either the owners (equity) or the creditors (debts), or a combination of the two. This equation forms the basis for the double-entry system of financial accounting.
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