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IrinaVladis [17]

3 years ago

6

Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of ho

lding the security is 13.80%. Assuming that both investments have equal risk and Ericâs investment time horizon is flexible, which of the following investment options will exhibit the lower price?
a. An investment that matures in four years
b. An investment that matures in five years

1 answer:

Scrat [10]3 years ago

7 0

Answer:

The second option which 5 years to maturity exhibited a lower price of

$523.95

Explanation:

In order to ascertain the option with lower, it is important we determine the price of each investment based on the fact the price of an investment opportunity today is the present value of its future cash flow is the maturity value of $1000 in both cases:

a.

PV=FV/(1+r)^n

PV=price of investment

FV=future value=$1000

r= 13.80%.

n=4 years

PV=$1000/(1+13.80%)^4

PV=$596.25

b.

PV=FV/(1+r)^n

PV=price of investment

FV=future value=$1000

r= 13.80%.

n=5 years

PV=$1000/(1+13.80%)^5

PV= $523.95

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Alex_Xolod [135]

The company's break even points in unit sales is 43,000 units.

Above the actual sales volume of 42,000 units is the break-even point.

<h3>What is Break Even point?</h3>

In economics, business, and particularly cost accounting, the break-even point is the point at which total cost and total income are equal, or "even."

Although opportunity costs have been paid and capital has received the risk-adjusted, projected return, there is no net loss or gain, and one has "broken even."
A graph with a function that represents the fixed costs is also helpful.
No matter how many units are manufactured, the fixed cost is always 1200, hence the fixed costs function is shown as a horizontal line (FC = 1200).
Any of the following will raise the break-even point: an increase in the quantity of fixed charges or expenses for the business.
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5 0

2 years ago

Luna Manufacturing uses a process costing-system. Luna uses the weighted average method . The following information pertains to

Goshia [24]

Answer:

conversion cost per equivalent unit: 10.47

Explanation:

Luna uses the weighted average method:

complete units + equivalent units ending WIP

Completed during the period 187,000

ending WIP 197,000 x 30% =<u> 59,100‬ </u>

Equivalent units 246,100‬

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cost per equivalent unit: cost / equivalent untis

2,576,400 / 246,100 = 10,4689 = 10.47

3 0

3 years ago

A company must invest in project 1 in order to invest in project 2. Which of the following constraints ensures that project 1 wi

pickupchik [31]

The correct answer is C

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3 years ago

Theresa spends 2 hours working instead of watching tv with her friends. The opportunity cost to her of working is.

Mazyrski [523]

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The definition of an opportunity is a positive state of affairs for an effective outcome. An instance of an opportunity is a lunch meeting with a probable organization.

This opportunity will let you observe positive paths which lead toward reaching your desires and goals. If we want what is first-rate for our careers then taking an opportunity is important. possibilities assists individuals to expand work-associated capabilities allowing them to achieve efficient paintings inside our community. each community-based totally and facility-based totally talent improvement, employment, and schooling options are available. Possibilities are first-rate motivators because they promote innovation, dedication, and power. Even in industries with which an entrepreneur is surprised, particular opportunities for fulfillment are what makes enterprise exciting. entrepreneurs and commercial enterprise-owners alike ought to look for extra possibilities.

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1 year ago

In order to compute equivalent units of production using the FIFO method of process costing, work for the period must be broken

Artist 52 [7]

Answer:

The correct option here is C) units in the beginning work in progress period which were completed , units which were started and completed, and units in ending work in progress.

Explanation:

FIFO ( First in first out ) method is used to take out the cost per unit when doing process costing, in this method it is assumed that the inventory which were not finished during the beginning of period would be first completed and then new shall be started.

To take out the equivalent cost per unit under the FIFO method we will add the units which were completed in the beginning plus units which were started and completed during the period and plus the units which are left in ending work in progress.

5 0

3 years ago