Answer:
Expected Return =8.75% Standard deviation =6.375%
Explanation:
Overall expected return
We calculated the return for all the possibilities normal, boom, recession
boom+normal+recession
(final stock price-initial stock price+dividend)/initial stock price*prop
=[(48-40+2.80)/40*1/3]+[(43-40+1.8)/40*1/3]+[(34-4+0.90)/40*1/3]
=0.09+0.04-0.0425
=0.875/8.75%
expected holding period standard deviation
(overall expected return-return of scenario)^2*prop
(8,75-9)^2*1/3+(8,75-4)^2*1/3+(8,75+4.25)^2*1/3
=0.006387/0.6387%
Total assets: $3,450
Total liabilities and equity: $3,450
Explanation:
Cash: $2635
Equipment: $815
Total assets: $3,450
Accounts Payable: $185
Owner's Equity: $3,450 - $185 = $3,265
Total liabilities and equity: $3,450
Answer:
$1,700
Explanation:
Although the minimum equity to open a long margin account is $2,000. However, this does not apply if the securities in the account are paid fully.
It will amount to potential loss if a customer is asked to deposit more than 100% when buying. Since the customer wants to buy 1,700 of stock, it means that 100% or $1,700 (100 shares × $17) must be deposited.
Answer:
$36,000 increase
Explanation:
For computing the increase or decrease in income, first we have to determine the net cash outflow which is shown below:
Net cash outflow = Purchase of new spotter truck - sale value of old truck
= $120,000 - $31,000
= $89,000
Now the increase or decrease would be
= Variable manufacturing cost for five years - net cash outflow
= $25,000 × 5 years - $89,000
= $125,000 - $89,000
= $36,000 increase
Answer:
B. $2,554.37
Explanation:
In this question we use the Future value formula which is shown below:
Future value = Present value × (1 + rate)^number of years
where,
Present value = $2,400
Rate = 0.625 ÷ 12 = 0.0052083333
Number of years = 1 month × 12 months = 12
So, the future value
= $2,400 × (1 + 0.0052083333
)^12
= $,2,400 × 1.0643218146
= $2,554.37