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sdas [7]
3 years ago
11

A manager is holding a $4.0 million bond portfolio with a modified duration of eight years. She would like to hedge the risk of

the portfolio by short-selling Treasury bonds. The modified duration of T-bonds is 10 years. How many dollars' worth of T-bonds should she sell to minimize the risk of her position
Business
1 answer:
Luda [366]3 years ago
8 0

Answer:

$3,200,000

Explanation:

Duration of bond portfolio (Dp) = 8

Value of bond portfolio (Vp) = 4,000,000

Duration of bonds (Df) = 10

T-bonds to be sold = Dp * Vp / Df

T-bonds to be sold = 8 * 4,000,000 / 10

T-bonds to be sold = $3,200,000

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an activity-based costing system blank . multiple select question. is used for external reporting may exclude some manufacturing
suter [353]

An activity-based costing system is uses numerous overhead cost pools. Thus, the last option is correct.

<h3>What is Activity based costing?</h3>

Activity based costing is the technique which is used to calculate the cost based on the activity. It is the prediction of the cost, in which overhead cost and indirect cost are assigned.

This approach allocates fixed and variable expenses, as well as overhead and indirect costs, to relevant goods and services, allowing a business to determine the true cost of a product, service, or activity.

Therefore, it can be concluded that the last option is correct.

Learn more about Activity based costing here:

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6 0
2 years ago
A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units t
LenKa [72]

Answer:

It is more profitable to sell the units as-is and produce new ones.

Explanation:

Giving the following information:

The company has 22,000 defective units that cost $6 per unit to manufacture.

Sell as-is:

Selling price= $2

Rework:

Additional cost= $4.5

Selling price= $8.5

If the units are sold as-is, the company will be able to build 22,000 replacement units for $6 each and sell them at the full price of $8.50 each.

<u>The original cost of the 22,000 units is a sunk cost, it will remain no matter the decision. </u>

Sell as-is:

Defective units= 22,000*3= 44,000

New units= 22,000*(8.5 - 6)= 55,000

Total income= $99,000

Rework:

Sales= 22,000*(8.5 - 4.5)= $88,000

It is more profitable to sell the units as-is and produce new ones.

3 0
3 years ago
The following account appears in the ledger prior to recognizing the jobs completed in January:
deff fn [24]

Answer:

Following are the solution to this question:

Explanation:

In point a:

Journal Entry :

Account                                      Dr                            Cr.

Goods completed              \$358,680

Processing work                                                 \$358,680

Complete total labour costs

= \$70,950 + \$82,770 + \$ 43,360 + \$ 161,600 \\\\ = \$ 358680

In point b:

Uncompleted jobs cost:

\text{Balance, January 1} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \   \$17,510\\\\\text{Direct materials} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \   \$142,360\\\\ \text{Direct labor } \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \             \$153,560\\\\\text{Factory overhead } \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \$80,720\\\\\text{Cost of Finished Goods Transferred} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ (\$  358680)\\\\\text{Cost of Unfinished Jobs on Aug 31} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \$ 35470\\\\

8 0
3 years ago
Multiple Choice experiencing inflation because disposable income exceeds personal income. experiencing expanding production capa
OLEGan [10]

Answer: Experiencing declining production capacity because net investment is negative

Explanation:

Investment in a country includes capital Expenditure such as buildings, roads, inventory and etcetera which contribute to the production capacity of the Nation.

Net Investment is calculated by subtracting Depreciation from the Gross Private Domestic Investment. When Net Investment is negative, it means that the Production capacity of the nation is weakened and declining because the Investment available is not able to produce as much.

In the country described, the Net Investment is,

= Gross Private Domestic Investment - Consumption of Fixed Capital (Depreciation)

= 46 - 52

= -$6 billion

The Net Investment for this Economy is negative showing a declining production capacity.

7 0
3 years ago
Pina Colada Furniture factors $670000 of receivables to Sheffield Factors, Inc. Sheffield Factors assesses a 2% service charge o
Reika [66]

Answer and Explanation:

The journal entry is shown below;

Cash $656,600

Factoring charges (2% of $670,000)  $13,400

            To Trade Receivables $670,000

(Being recording these receivables)

Here cash and factory charges is debited as it increased the assets and expense while the trade receivable is credited as decreased the assets

3 0
3 years ago
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