Answer:
Risk and Return
1. Joe is an average investor. His financial advisor gave him options of investing in stock A, with a σ of 12%, and stock B, with a σ of 9%. Both stocks have the same expected return of 16%. Joe can pick only one stock and decides to invest in stock B.
Good Financial Decision?
Yes
No
2. Marcie works for an educational technology firm that recently launched its employee stock option plan (ESOP). Marcie allocated all her investments in the ESOP.
Good Financial Decision?
Yes
No
3. rin wants to invest in a hedge fund that has had a very strong performance track record. The hedge fund has given its investors a return of over 60% for the past five years. Although Erin is tempted to put her money in the fund, she decides to conduct due diligence on the hedge fund’s assets, because she is aware that past performance is no guarantee of future results.
Good Financial Decision?
Yes
No
Explanation:
1. Joe's decision to invest in stock B is a good financial decision. Since both investments have the same returns, the decision on which investment to take shifts to the standard deviation of the returns, which specifies the variability of the returns. Invariably, the investment with less standard deviation should win the vote. Therefore, Joe's decision is a good financial decision because investment in B has a standard deviation of 9% unlike A's 12%.
2. Putting all eggs in one market as Marcie had done by allocating all her investments in the ESOP is not a good financial decision, theoretically. It is always best to spread the risks, though higher-yielding investments (returns) bear higher risks.
3. The decision of Erin to conduct due diligence on the hedge fund's assets, despite its past performance is a good financial decision. Due diligence reveals some behind-the-scene information that are instrumental in making sound business decisions. Who are the present managers of the fund? What systems are in place in the entity to guarantee similar future performance, all things being equal? What market's sentiments and information are available for consideration? These questions, and many others can be answered through a due diligence. Surely, "past performance is no guarantee of future results."
Explanation:
According to the accounting cost method , the reissuance of the treasury stock would be credited to the additional paid in capital which represents the remaining amount i.e deduct $120,000 from the $190,000
And, the net income for the year 6 is
= Increase in assets - Increase in liabilities - Increase in capital stock - Increase in additional paid in capital + Dividend payment
= $356,000 - $108,000 - $240,000 - $24,000 + $52,000
= $36,000
Answer:
117,000 adjusted COGS
Explanation:
35,000 + 136,000 = 48,000 + COGS
COGS = 123,000 before adjustment
overapplied overhead for 6,000
This means the applied is higher than actual expenses, the cost is 6,000 lower we must decrease the COGS
123,000 - 6,000 = 117,000 adjusted COGS
Purrrr you look cute gurllll as you should
If they had to go another center for the service the approach is direct
