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Bess [88]
3 years ago
5

You are bullish on Telecom stock. The current market price is $48 per share, and you have $9,600 of your own to invest. You borr

ow an additional $9,600 from your broker at an interest rate of 3.0% per year and invest $19,200 in the stock. a. What will be your rate of return if the price of Telecom stock goes up by 5% during the next year
Business
1 answer:
Gekata [30.6K]3 years ago
8 0

Answer: 7%

Explanation:

The following can be deduced.from the question:

Loan amount = $9,600

Equity = $9,600

Market price = $48 per share

Total investment = $19,200

Growth of Investment = 5%.

We then calculate value of the investment in a year. This.will be:

= 19,200 × 1.05

= $20,160

Interest on the loan would be:

= $9,600 * 0.03

= $288

Therefore, rate of return will be:

= (20,160 - 9,600 - 288)/9,600 - 1

= 0.07 = 7%

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Joplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable J-Sports logo.
motikmotik

Answer:

a.                         Joplin Industries Inc.

             Absorption Costing Income Statement

                  For the Month Ended June 30

Sales                                                                        $81,000,000

Less: Beginning inventory           $4,387,200          

Cost of goods manufactured       <u>$45,756,000</u>

Cost of goods sold                                                 <u>$50,143,200</u>

Gross Profit                                                              $30,856,800

Selling and Administrative Expenses                    <u>$13,122,000</u>

Operating Income                                                  <u>$17,734,800</u>

b.                           Joplin Industries Inc.

                 Variable Costing Income Statement

                      For the Month Ended June 30

Sales                                                                        $81,000,000

Variable cost of goods sold                                   <u>$40,500,000</u>

Manufacturing Margin                                            $40,500,000

Selling and Administrative Expenses                    <u>$12,150,000</u>

Contribution Margin                                                $28,350,000

<u>Fixed cost</u>

Manufacturing cost                   $8,856,000

Selling and Admin Expenses   <u>$972,000</u>

Total Fixed cost                                                         <u>$9,828,000</u>

Operating Income                                                     <u>$18,522,000</u>

4 0
3 years ago
Lisa is choosing between three alternatives: a) working at her job that pays 60 dollars; b) writing a term paper which she value
Mkey [24]

Answer:

c. 80 dollars.

Explanation:

Opportunity cost represents the next best alternative missed.  It is the forfeited benefits arising from choosing one option over the others. Opportunity cost is expressed as a value or the worth of the forgone alternative.

Lisa's opportunity cost is $ 80.  She has valued going out with her friend at $ 80, which is the highest value amongst her three choices. Since she can not engage in all the three activities at the same time, the next best alternative to writing her exam is the opportunity cost.

7 0
3 years ago
When developing baseline standards, it is vital to use industry best practices. Industry best practices standards enable one to
Trava [24]

Answer: True

Explanation: There is always that opportunity to perfect existing industry standards and several analysis would have already be done which saves you a great deal of financial stress and a possible loss.

7 0
3 years ago
A company has employed two workers A and B whose productivities are 20units and 15units respectively. The wage for A is k12 whil
Leni [432]

Answer:

no

Explanation:

In order to achieve optimal employment level, the ratio of productivity between employees must be equal to the ratio between their wages, e.g. an employee who is 25% more productive, should earn 25% more.

In this case, the productive ratio is 15:20 or 3:4, while the wage ratio is 8:12 or 2:3. Since the wage ratio is lower than the productivity ratio (2:3 < 3:4), the two employees are not optimally employed.

3 0
3 years ago
What is NOT affected by decisions of the federal Open Market Committee?
natka813 [3]

I believe the answer is: D. bond prices


Bond prices is determined by the mutual agreement between the company who issue the bond and the investors who bought them along with its value in the market. federal Open Market Committee only has the jurisdiction in United States Treasury securities and banking operation.

5 0
3 years ago
Read 2 more answers
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