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liberstina [14]
2 years ago
8

g A speculator buys a call option for $3, with an exercise price of $50. The stock is currently priced at $49, and rises to $55

on the expiration date. What is the stock price at which the speculator would break even
Business
1 answer:
azamat2 years ago
8 0

Answer:

$53

Explanation:

Call option is $3

Exercise price is $50

The stock is currently priced at $49

It rises to $55 on the expiration date

Therefore the cost price at which the speculator will break even can be calculated as follows

= ($50-$3)+($55-$49)

= $47 + $6

= $53

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A company is considering the purchase of new equipment for $57,000. The projected annual net cash flows are $23,400. The machine
lina2011 [118]

Answer:

Net Present Value = $3,304.069

Explanation:

<em>To determine whether or not the investment was right, we will need to determine the net present value of the investment (NPV). </em>

<em>The NPV is the difference between the present value PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite. </em>

NPV of an investment(NPV)

NPV = PV of Cash inflows - PV of cash outflow

The cash inflow is an annuity.

PV of annuity= A× 1 -(1+r)^(-n)/r

A- Annual cash flow ,- 23,400 r - discount rate - 8%, number of years- 3

Present Value of cash inflow =23,400 × (1- (1.08)^(-3)/0.08 = 60,304.06

Initial cost = 57,000

Net Present Value = 60,304.06 - 57,000 = 3,304.069

Net Present Value = $3,304.069

<em>Kindly note that a discount rate of 8% was used as it is the opportunity cost of capital for the investment.</em>

     

4 0
3 years ago
Robert must send an e-mail message to a client in Turkey. He is carefully selecting his words to ensure that his Turkish client,
Anastaziya [24]

Answer:

Message encoding.

Explanation:

Communication can be defined as the process of conveying information from one person or location to another. Communication can also be described as the transmission of messages through signs, pictorial representation, verbal means.

Encoding can be defined as the process in which an idea is transformed in a communicable message and then transmitted through various channels such as television, radio, internet.

Message encoding involves sending messages to the receiver in comprehensible words.

3 0
3 years ago
The statement of shareholders’ equity reports the transactions that cause changes in its shareholders’ equity account balances.
vazorg [7]

Answer:

B) the issuance of bonds.

Explanation:

Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.

As such, the sale of additional shares of stock, net income and declaration of dividend are typical reasons for changes in shareholder's equity however, the issuance of bonds is a liability (usually non-current).

6 0
3 years ago
The Intramural Sports Club reports sales revenue of $578,000. Inventory at both the beginning and end of the year totals $110,00
Genrish500 [490]

Answer:

$363,500

Explanation:

Gross profit = Revenue - Cost of Goods Sold.

In the case

Revenue = $578,000.

The Cost of Goods Sold: COGS

Inventory turn over = COGS/ Average turnover

Average turnover = Opening stock + closing stock/2

In this case Opening stock + Closing stock = $110,000

Average turnover = $110,000 /2 =$55,000

Therefore:

3.9 = COGS/$55,000

COGS = $55,000 x 3.9

COGS =$214,500

Gross profit =  $578,000 - $214,500

Gross profit = $363,500

3 0
2 years ago
Managers in businesses direct their activities toward earning money for their company and its owners, whereas managers in nonpro
ikadub [295]

Answer:

 b. generating some kind of social impact

Explanation:

Business ventures are established with a profit motive. The investor risks their resources, time, and efforts in the expectation of making profits.  The investor and his or her business manager employ their skills and experiences to ensure that the business is profitable.

Not-for-profit organizations are formed to provide a service to specific members, a section or entire society. They aim at improving the well being of the community by providing essential services. Not for profit organization offer free services or charge a minimum fee. They get funding from members or founders of the organization or may receive donations from institutions and the general public.

8 0
3 years ago
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