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According to the CAPM, what is the market risk premium given an expected return on a security of 13.6%, a stock beta of 1.2, and a risk-free interest rate of 4%?
Answer:
8%
Explanation:
The expected return on security is 13.6%
The stock beta is 1.2
The risk free interest rate is 1.4
Therefore, using the CAMP , the market risk premium can be calculated as follows
13.6%= 4% + 1.2×MRP
13.6%-4%= 1.2MRP
9.6%=1.2MRP
MRP= 9.6/1.2
MRP= 8%
Hence the market risk premium is 8%
Based on the information given, it can be deduced that the advertisement was inappropriate, therefore Gidgits Galore will be held responsible. The correct option is false.
From the information given, it can be inferred that even though the product wasn't safe, the company advertised the product as being safe. This is wrong and therefore, the company will be held responsible.
Demand letter is when an individual requests payment for money owed for loss of or damage to property, back rent, repayment of a bad check or payment to compensate for defective goods, etc.
In conclusion, a demand letter is simply used to state a legal claim.
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Answer:
Replace existing equipment with newer, more efficient equipment. Although this option entails substantial up-front investment, you’re sure that you can more than make up the difference in lower production costs.
Explanation:
The action that is likely to have the highest initial cost in terms of its impact on other parts of the organization is to replace existing equipment with newer, more efficient equipment. Although this option entails substantial up-front investment, you’re sure that you can more than make up the difference in lower production costs. This because buying new equipment will require a big investment from the company at the beginning to cover its costs but this will later generate more productivity and lower production costs which will compensate the initial high cost.
The other options are not right because buying slightly lower-grade materials, including hardwood, aluminum, vinyl, and nylon can decrease the cost at the beginning but the company can have problems with the quality of the products which could be really costly. Also, lay off a portion of your workforce and then try to motivate everyone who’s left to work harder and this option also means selecting future hires from a lower-skill labor pool and paying lower wages will decrease labor costs at the beginning but can require a big investment later with the costs of the process to hire new people, compensations to the employees that were laid off and can also result on low quality job and productivity from lower-skill labor.
Answer:
The balance in the cash account at the end of the month will be $401.000
Explanation:
$0
+$ 344,000 bank loan
+$112,000 stock issued to stakeholders
-$54,000 purchase of inventory
+$25,000 sell
-$26,000 payment of dividends
-------------
$401,000 balance at the end of the month
see attached file for T-account
Answer:
Explanation:
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Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $325,000; Cash paid for rent, $37,000; Cash paid to employees for services rendered during the year, $117,000; Cash paid for utilities, $47,000. In addition, you determine that customers owed the company $57,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,700 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.
