Answer:
D. $0.93
Explanation:
Upmove (U) = High price/current price
= 42/40
= 1.05
Down move (D) = Low price/current price
= 37/40
= 0.925
Risk neutral probability for up move
q = (e^(risk free rate*time)-D)/(U-D)
= (e^(0.02*1)-0.925)/(1.05-0.925)
= 0.76161
Put option payoff at high price (payoff H)
= Max(Strike price-High price,0)
= Max(41-42,0)
= Max(-1,0)
= 0
Put option payoff at low price (Payoff L)
= Max(Strike price-low price,0)
= Max(41-37,0)
= Max(4,0)
= 4
Price of Put option = e^(-r*t)*(q*Payoff H+(1-q)*Payoff L)
= e^(-0.02*1)*(0.761611*0+(1-0.761611)*4)
= 0.93
Therefore, The value of each option using a one-period binomial model is 0.93
Simple returns focus on accounting for net operating income, not cash flow. The simple method of revenue focuses on cash flow rather than accounting for net operating income.
A simple rate of return is calculated by subtracting the initial value of the investment from the current value and dividing it by the initial value. To output as%, multiply the result by 100.
Under the simple rate of return method, a dollar you receive 10 years later is considered to be worth the $ 1 you receive today. Therefore, the simple yield method can be misleading if the alternative cash flow patterns under consideration are different.
Learn more about cash flows at
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<em>Your question is incomplete. please read below to find the full content.</em>
The Simple Rate Of Return Focuses On Accounting Net Operating Income Rather Than On Cash Flows.
A) TRUE
B) FALSE
<span>Senior management is responsible for generating the high level project roadmap for the organization. This roadmap should include the voice of the customer and the voice of the field in order to prioritize features and functionality that best serve those interests in the market. This roadmap should include specific shortterm goals as well as longterm directions.</span>
Answer:
Indirect manufacturing cost= $22100
Explanation:
We are provided with the following information:
Direct materials $ 6.20
Direct labor $ 3.10
Variable manufacturing overhead $ 1.35
Fixed manufacturing overhead $ 14,000
Sales commissions $ 1.50
Variable administrative expense $ 0.40
Fixed selling and administrative expense $ 4,500
6,000 units are produced
Indirect manufacturing cost= variable overhead + fixed manufacturing overhead= 1,35*6000+14000= $22100
