Answer:
$20,000
Explanation:
Generally a graded vesting schedule lasts 6 years. After the first 2 years, the employee is entitled to 20% of accrued benefits (in this case contributions to her retirement plan). Then, the employee will be vested an additional 20% of the contribution benefits per year until the sixth year when 100% of the benefits are vested.
In this case, Jamie would be able to roll out $25,000 x 80% = $20,000
End of year % vested
2 20%
3 40%
4 60%
5 80%
6 100%
2. What is your class or form?
A. 1st Year (Form 1)
B. 2nd Year (Form 2)
C. 3rd Year (Form 3)
Answer:
2 nd year ( FORM 2)
Explanation:
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Kennywood Inc., a manufacturing firm, is able to produce 1,500 pairs of pants per hour, at maximum efficiency. There are three eight−hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 504,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 516,000. Assume the month has 30 days. What is the theoretical capacity for the month?
Answer:
1,080,000 units
Explanation:
Given the below information;
Theoretical capacity per hour = 1,500 units per hour
Hours per shift = 8 hours
Number of shift in each day = 3
Number of days per month = 30
Theoretical capacity for the month
= Theoretical capacity per hour × number of shift per day × hours per shift/day × number of days in a month
= 1,500 × 3 × 8 × 30
= 1,080,000 units
Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries.
Total spending for the federal government of Lilliput for the last fiscal year was $1.06 billion. The country collected $1.05 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance? In the last fiscal year, Lilliput was running:______.
a. a budget surplus.
b. a balanced budget.
c. a budget deficit.
Answer: budget deficit
Explanation:
From the question, we are informed that the total spending for the federal government of Lilliput for the last fiscal year was $1.06 billion and that the country collected $1.05 billion in taxes during this same fiscal year.
Since the expenditure of $1.06 billion is more than the revenue of $1.05 billion, this show that there was a budget deficit.
A project will reduce costs by $38,500 but increase depreciation by $18,300. What is the operating cash flow if the tax rate is 35 percent?
Answer:
$31,430
Explanation:
A project will reduce costs by $38,500
The project will have an increased depreciation of $18,300
The tax rate is 35%
= 35/100
= 0.35
Therefore, the operating cash flow can be calculated as follows
Operating cash flow= reduction in project cost×(1-tax rate)+(increase in the depreciation amount ×tax rate)
= $38,500×(1-0.35)+($18,300×0.35)
= $38,500×0.65+6,405
= $25,025+$6,405
= $31,430
Hence the operating cash flow is $31,430
When Isaiah Company has fixed costs of $137,750 and the contribution margin is $29, the break-even point is
Answer:
Break-even point in units= 4,750 units
Explanation:
Giving the following information:
When Isaiah Company has fixed costs of $137,750 and the contribution margin is $29
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 137,750 / 29
Break-even point in units= 4,750 units
Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 10,000 shares of $20 par value common stock for $240,000 cash. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $45,500. The stock has a $1 per share stated value. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $45,500. The stock has no stated value. A corporation issued 2,500 shares of $50 par value preferred stock for $170,500 cash.
Answer:
1.
DR Cash.................................................$240,000
CR Common Stock................................................... $200,000
Paid in Excess of Par- Common Stock.....................$40,000
Working
Common Stock = $20 * 10,000 = $200,000
Paid in Excess of Par- Common Stock = 240,000 - 200,000 = $40,000
2.
DR Promotion Expenses................................$45,500
CR Common Stock.........................................................$5,000
Paid in Excess of Par- Common Stock ........................$40,500
Working
Common stock = 5,000 * 1 = $5,000
Paid in Excess of Par- Common Stock = 45,500 - 5,000 = $40,500
3
DR Promotion Expenses..........................$45,500
CR Common Stock....................................................$45,500
4
DR Cash ...................................................$170,500
CR Preferred Stock .....................................................$125,000
CR Paid in Excess of Par - Preferred Stock ..............$45,500
Working
Preferred Stock = 50 * 2,500 = $125,000
Paid in Excess of Par - Preferred Stock = 170,500 - 125,000 = $45,500
You consider buying a share of stock at a price of $10. The stock is expected to pay a dividend of $1.00 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $12. The stock's beta is 1.0, rf is 16%, and E[rm] = 26%. What is the stock's abnormal return? rev: 03_30_2019_QC_CS-164617 Multiple Choice 4% 10% 6% 0%
Answer: 4%
Explanation:
Abnormal returns are the excess actual returns received over the expected return.
The actual return can be calculated as;
= [tex]\frac{New Stock price + dividends - Old Stock Price}{Old stock price}[/tex]
= [tex]\frac{12 - 10 + 1}{10}[/tex]
= 30%
The expected return according to CAPM;
Expected return = Risk free rate + beta( market return - risk free rate)
= 16% + 1 ( 26% - 16%)
= 26%
Abnormal return = 30% - 26%
= 4%
Which of the following is NOT a benefit of a social media presence for a brand? Group of answer choices Social media allows companies to have a short-term focus. Social media allows marketers to establish a public voice and presence online. Social media can cost-effectively reinforce other communication activities. Social media can encourage companies to stay innovative and relevant. Social media can be used to build or tap into online communities.
Answer: Social media allows companies to have a short-term focus.
Explanation:
Social Media has made the world way more connected than it was before even with the advent of the Internet. As such, companies were able to leverage on this to improve their brand and popularity by being present on the various social media platforms.
With social media, companies have been able to marketers to establish a public voice and presence online, cost-effectively reinforce other communication activities, build online forums and communities as well as remain relevant in a fast changing world.
Companies having a short term focus as a result of social media is not a benefit of social media. A company should always think long term and even social media can help them achieve long term growth if long term marketing plans are integrated with social media marketing.
Suppose that the residents of Vegi-Topia spend all of their income on cauliflower, broccoli, and carrots. In 2013, they buy 50 heads of cauliflower for $2 each, 60 bunches of broccoli for $1.5 each, and 200 carrots for $0.10. In 2014, they buy 75 heads of cauliflower for $2 each, 70 bunches of broccoli for $1.50 each, and 500 carrots for $0.20 each. In 2015, they buy 80 heads of cauliflower for $3, 90 bunches of broccoli for $2, and 500 carrots for $0.25 each. If the base year is 2015, what is the inflation for 2014
Answer:
Inflation for 2014 is 11%
Explanation:
Inflation refers to a quantitative measure of the rate of an increase in the average price level of a selected basket of commodities in an economy over a specified period of time.
The inflation rate for 2014 can be calculated as follows:
Since 2015 is the base year, the it implies that the basket we are going to use contains 80 heads of cauliflower, 90 bunches of broccoli, and 500 carrots.
Therefore, cost of basket for each year can be determined as follows:
2013 cost of basket = ∑(Unit price in 2014 * Quantity in 2015) = ($2 * 80) + ($1.50 * 50) + ($0.10 * 500) = $285
2014 cost of basket = ∑(Unit price in 2014 * Quantity in 2015) = ($2 * 80) + ($1.50 * 50) + ($0.20 * 500) = $335
2015 cost of basket = ∑(Unit price in 2015 * Quantity in 2015) = ($3 * 80) + ($2 * 50) + ($0.25 * 500) = $465
The CPI for each year can be determined using the following for formula:
CPI of a year = Current period cost of basket / Base year cost of basket …………… (1)
As 2015 is the base year, using equation (1), we have:
2013 CPI = (2013 cost of basket / 2015 cost of basket) * 100 = $285 / $465 = 0.61 * 100 = 61
2014 CPI = (2014 cost of basket / 2015 cost of basket) * 100 = $335 / $465 = 0.72 * 100 = 72
2015 CPI = (2015 cost of basket / 2015 cost of basket) * 100 = $465 / $465 = 1 * 100 = 100
The inflation for a year can be determined as follows:
Inflation = (CPI in the current year - CPI in previous year) / CPI in the base year ..................... (2)
Using equation (2), we have:
Inflation for 2014 = (CPI in 2014 - CPI in 2013) / CPI in 2015 = (72 - 61) / 100 = 11 / 100 = 0.11, or 11%
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
Full question reads;
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
a. frequency
b. consumption
c. pressures
d. rules
Answer:
a. frequency
Explanation:
Indeed, no particular human project can last forever, so there is a need to ascertain the frequency of a project, detailing how often the project would be repeated so as to also determine what the project's lifespan will be.
For example, a road construction project may take into account how often the road would be used, which provides insight into the frequency of road repairs and the overall lifetime of the car.
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
Fly High Co. is expanding and expects operating cash flows of $65,000 a year for four years as a result. This expansion requires $105,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $7,000 of net working capital, which will be recovered at the end of the project. What is the net present value of this expansion project at a required rate of return of 15 percent
Answer:
The net present value of this expansion project is $77,575.87.
Explanation:
The Net Present Value of the Expansion can be calculated as follows
($112,000) CFj
$65,000 CFj
$65,000 CFj
$65,000 CFj
$72,000 CFj
I/YR 15%
Shift NPV $77,575.87
The term crowding-out effect refers to a situation in which a government _______________ results in ______________ interest rates, causing ______________ in private spending on investment and consumer durables.
Answer: Deficit; higher; a decrease
Explanation:
The term crowding-out effect refers to a situation in which a government deficit results in higher interest rates, causing a decrease in private spending on investment and consumer durables.
The Crowding-out effect is what happens when a Government increases its spending past its revenues and gets a budget deficit. In other to balance its books therefore it will borrow heavily.
If the Government is such a large one like the American Government or the British Government, the borrowing might be so large that it will have the effect of reducing the amount of loanable funds in the market thereby increasing the interest rates due to a reduced supply of loanable funds.
As there are now increased interest rates, it will be more expensive for companies to borrow to spend on investment or for consumers to spend on durables. It will have the effect of crowding out the private sector.
Chaz and Dolly enter into a contract under which Chaz agrees to provide maintenance services for Dolly's Ski Resort. Duties under the contract may not be transferred if
Answer: d. any of the choices.
Explanation:
Chaz is not to transfer the duties to a third party if Dolly got into the agreement with Chaz for any of the following;
If Dolly places special trust in the ability of Chaz to perform the maintenance then that trust should not be broken by transferring the duties to a third party. Dolly went into that contract because they trusted in the abilities of Chaz.If Dolly went into the contract due to the personal skills or talents of Chaz, the duties against would be non-transferable. Chaz's skills were the reason the contract was signed, if these skills are not to be used then the contract will be baseless. By signing with Chaz, Dolly expects a certain level of performance. If the performance that will be made by a third contracting party is materially different from the one that Dolly would have expected from Chez, the duties will not be transferable.richard has two investment opportunities. He can invest in the sunglasses company or the umbrella company. if he diversifies his investment by putting 50% of his money into each company, what is the expected return and standard deviation of his portfolio
Answer:
Some information was missing, so i looked it up:
State of Prob. of the state Sunglasses Umbrella
the economy of the economy Company Corporation
Sunny .50 25% 0%
Rainy .50 0% 25%
expected returns:
Sunglasses Company = 0.5 x 25% = 12.5%
Umbrella Corporation = 0.5 x 25% = 12.5%,
so the expected return of the portfolio = (12.5% x 0.50) + (12.5% x 0.50) = 12.5%
standard deviation:
Sunglasses Company = √{[(0% - 12.5%)² + (25% - 12.5%)²] / 2} = √156.25 = 12.5%
Umbrella Corporation = √{[(0% - 12.5%)² + (25% - 12.5%)²] / 2} = √156.25 = 12.5%
so the standard deviation of the portfolio = 12.5%
The Mono firm in __________ is renowned for its philosophy of designing cutlery and other utensils that are so sophisticated and elegant as to be "timeless."
Answer:
Germany
Explanation:
In simple words, Mono A came to both the industry in 1959. Continuously simplified utensils, which broken from all standards, was persuaded of its revolutionary value and were to be a beloved, enduring style classic.Karl Oskar Blase, whom, like Raacke, scolded just at Hochschule für Gestaltung in stockholm, has created the design, advertising and contact. It's the origin storey of Mono. Originally, Mono A was scarcely marketed at all.
Your client in the 25% federal income tax bracket lives in a state where his earnings place him in the 6% bracket for state income tax purposes. If he were to purchase a 4% bond issued by a political subdivision of another state, his total tax-equivalent yield would be
Answer:
Slightly more than 5.33%.
Explanation:
In case when the municipal bond owned by an individual i.e. issued is not for interest free tax rate but also it is non tax on that particular state
So here the tax-equivalent yield is
= Purchase bond percentage ÷ (1 - tax rate)
= 0.04 ÷ (1 - 0.25)
= 5.33%
Hence, his total tax-equivalent yield is 5.33% i.e. calculated by applying the above formula
Sheridan Company has several outdated computers that cost a total of $18200 and could be sold as scrap for $6200. They could be updated for an additional $3000 and sold. If Sheridan updates the computers and sells them, net income will increase by $9000. What amount would be considered sunk costs
Answer:
$18200
Explanation:
Sunk cost is cost that has already been incurred and cannot be recovered. It should not be considered when making future decisions.
The computers costs $18200. This amount has already been incurred and it cannot be recovered.
An increase in the rate of expected inflation will Group of answer choices shift the demand for loanable funds to the left (down). shift the supply of loanable funds to the left (down). shift demand and supply for loanable funds to the right (up), decreasing interest rates. shift demand and supply for loanable funds to the right (up), increasing interest rates.
Answer:
shift demand and supply for loanable funds to the right (up), increasing interest rates.
Explanation:
According to the Fisher hypothesis when there is an increase in the expected inflation there is an equal increase in nominal interest rates.
As interest rates rise demand and supply for loanable funds will rise. This is illustrated in the attached diagram. Interest rate moves from i0 to i1.
Inflation is a reduction in the purchasing power of money. When inflation increases money regulation agencies reduce supply of money as a way to reduce price increase. This in turn reduces the amount of loanable funds commercial banks have to give out
A practice, favored by unions, which contractually binds employers to hire only workers who are already members of the union is called a(n):
Answer:
The correct answer is: Closed Shop.
Explanation:
To begin with, the name of "Closed Shop" refers to a type of practice well known as "pre-entry closed shop" too that unions favored with the only purpose to obligate the companies to contract workers who are already members of the union itself so in that situation both the company and the union tend to have an agreement of maintaining certain salary price for the workers so they are not in a continous fight. Moreover, this practice allow the workers to be employed by the company only if they are members of the union and as long as they are members of it.
A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:
The question is incomplete as it is missing the options. The complete question is,
A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:
a. Debit to Cash of $45,000 and a Credit to Account Receivable of $45,000
b. Debit to Cash of $46,800 and a Credit to Account Receivable of $46,800
c. Debit to Cash of $45,000 and a Credit to Notes Payable of $45,000
d. Debit to Cash of $45,000, a Debit to Factoring Fee Expense of $1800, and Credit to Account Receivable of $43,200
e. Debit to Cash of $43,2000, a Debit to Factoring Fee Expense of $1,800, and Credit to Account Receivable of $45,000
Answer:
The correct answer is option e.
Explanation:
Factoring accounts receivables means selling the claims on accounts receivables to a third party in exchange of cash. Such factoring is done to receive payment for these accounts receivables instantly and selling the claims to some other company. The factoring company charges a certain portion of accounts receivable as fee and only provides cash after deducting this percentage. This fee is an expense for a company using factoring service and is debited.
So the general entry to record factoring would be,
Cash 43200 Dr
Factoring fee 1800 Dr
Accounts receivables 45000 Cr
Cash = 0.96 * 45000 = 43200
Factoring fee = 45000 * 0.04 = 1800
You recently purchased a stock that is expected to earn 19 percent in a booming economy, 14 percent in a normal economy, and lose 3 percent in a recessionary economy. There is 21 percent probability of a boom, 70 percent chance of a normal economy, and 9 percent chance of a recession. What is your expected rate of return on this stock?
Answer:
r = 0.1352 or 13.52%
Explanation:
The expected rate of return or r is the average return that is expected from the stock. It is the expected rate of profit or loss that an investor can anticipate on an investment whose returns are known or anticipated.
The expected rate of return of can be calculated as follows,
r = pA * rA + pB * rB + ... + pN * rN
Where,
pA, pB and so on represents the probability of an event or state to occur rA, rB and so on are the return in different events or states
r = 0.21 * 0.19 + 0.7 * 0.14 + 0.09 * -0.03
r = 0.1352 or 13.52%
Graham Motors manufactures specialty tractors. It has two divisions: a Treactor Division and a Tire Division. The Tractor Division can use the tires produced by the Tire Division. The market price per tire is $75. The Tire Division has the following costs per tire:Direct material cost per tire: $15Conversion costs per tire: $3 (Assume the $3 includes only the variable portion of conversion costs.)Fixed manufacturing overhead cost for the year is expected to total $116,000. The Tire Division expects to manufacture 58,000 tires this year. The fixed manufacturing overhead per tire is $2 ($116,000 divided by 58,000 tires).Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Graham Motors has a negotiated transfer price policy, what is the lowest acceptable transfer price? What is the highest acceptable transfer price?• The lowest acceptable transfer price is $_______, the Tire Division's ______________.• The highest acceptable transfer price is $_______, the Tire Division's _____________.
Answer:
The LOWEST acceptable transfer price is $18 the Tire Division's variable cost per tire.
The HIGHEST acceptable transfer price is $75the Tire Division's market price.
Explanation:
Calculation for the lowest acceptable transfer price and the highest acceptable transfer price
Variable Cost per tire:
Direct Material $15
Conversion cost $3
=$18 per tire
The LOWEST acceptable transfer price is $18 Tire division variable cost per tire
Based on the information we were told that the market price per tire is $75 which means that the HIGHEST transfer price is $75 tire division market price.
Therefore If Graham Motors has a negotiated transfer price policy The LOWEST acceptable transfer price is $18 the Tire Division's variable cost per tire While The HIGHEST acceptable transfer price is $75 the Tire Division's market price.
The optimum capital structure Question 4 options: a) Provides the lowest cost of capital b) Has the best mix of debt, preferred stock, and common equity c) Can change over time as market and firm conditions change d) All of these apply
Answer:
d) All of these apply.
Explanation:
An optimum capital structure can be defined as a financial instrument used by firms to determine the best mix of debt and equity financing that maximizes its market value, as well as minimizes its cost of capital such as operations and expansion. It minimizes the weighted average cost of capital (WACC) of a firm to the least most possible value.
Generally, the optimum capital structure used by a firm to maximize its market value;
a) Provides the lowest cost of capital.
b) Has the best mix of debt, preferred stock, and common equity.
c) Can change over time as market and firm conditions change.
Importance of strategic planning
Answer:Strategic planning is the process of documenting and establishing a direction of your small business
Explanation: The strategic plan gives you a place to record your mission, vision, and values, as well as your long-term goals and the action plans you'll use to reach them.
Predatory pricing is considered an anti-competitive practice, and is considered illegal under competition laws. Which of the following best describes predatory pricing?
A. Predatory pricing requires one company to aquire the assets of another.
B. One business chooses to put another out of business by pricing its product below the level another competing business must be at to make a profit.
C. Predatory pricing occurs when a firm colludes with one or more firms to fix prices or output.
D. Predatory pricing is when a business sends someone out to change the price of another company's product so it is higher than its own.
Answer:
B
Explanation:
Predatory pricing is when a company sets the price of its goods or services too low with the aim of eliminating the competition. Predatory pricing is illegal and it violates antitrust law.
Predatory pricing occurs when a firm colludes with one or more firms to fix prices or output. This is an example of collusion and they usually occur in an oligopoly
Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?
A. Debit Assets $203,000; credit Common Stock $203,000.
B. Debit Cash and Land, $203,000; credit Common Stock $203,000.
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
D. Debit Common Stock $203,000; credit cash $71,000; credit Land $132,000.
E. Debit Common Stock $203,000; credit Assets $203,000.
Answer: C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
From the question, we are informed that Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting.
The journal entries will RR Consulting make to record this transaction will be:
Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Answer:
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
Recognize the Assets of Cash at $71,000, the Assets of Land at $132,000 and an Equity element - Common Stock at $203,000.
The journal entry will be as follows :
Cash $71,000 (debit)
Land $132,000 (debit)
Common Stock $203,000 (credit)
Craig's Car Wash Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback?
WACC: 10.00%
Year : Cash flows
0 : -$900
1 : $500
2 : $500
3 : $500
Answer:
Discounted payback period= 2 years 1 month
Explanation:
The discounted payback period is the estimated length of time in years it takes the present value of net cash inflow from a project to equate the net cash the initial cost
To work out the discounted payback period, we will compute present value of the cash inflow and then determine how long it will take for the sum to be equal to the initial cost. This is done as follows:
Year Cash flow DF Present value
0 900 × 1 = 900
1 500 × 1.1^(-1) = 454.55
2 500 × 1.1^(-2) = 413.22
2 500 × 1.1^(-3) = 375.66
Total PV for 2 years = 454.55 + 413.22 = 867.77
Balance of cash flow remaining to equal 900 = 900 -867.77 = 32.23
Discounted payback period = 32.23 /375.66 × 12 months
= 2 years 1 month
Discounted payback period= 2 years 1 month
Sonny's BBQ Company recently issued $85 par value preferred stock that pays an annual dividend of $9. Analysts estimate that the stock has a beta of 1.01. The current T-bill rate is 2.4%. The S&P 500's expected return is 12.1%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?
Answer:
Intrinsic value=$73.77
Explanation:
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.
According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
Price = D/Kp
D- Dividend payable
Kp- cost of preferred stock
So will need to work out the cost of equity using CAPM
The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
This model is considered superior to DVM. Hence, we will use the CAPM
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 2.4%, Rm- 12.1% β- 1.01
E(r) = 2.4% + 1.23×(12.1- 2.4)% = 12.20 %
Cost of preferred stock= 12.20 %
Using the dividend valuation model
Intrinsic value = 9/0.1220=73.77
Intrinsic value=$73.77
"A broker-dealer who acted as financial advisor to a municipality in structuring a new issue now wishes to act as underwriter in a negotiated offering. Which statement is TRUE?"
Answer:
B. The financial advisor is prohibited from acting as the underwriter
Explanation:
As per the rule of the Municipal Securities Rulemaking Board, the financial advisor cannot be the underwriter.
The financial advisor for a municipality is paying the advisory fee for assisting the structure of the municipality in order to the issuance of the new bond so that the less interest cost to be paid.
But in the case of the underwriter, it contains high rate of interest as it is very easiest way for selling
So through this, the conflict arises between these two parties
Therefore option B is correct
Assume that the hourly cost to operate a commercial airplane follows the normal distribution with a mean of $5,793 per hour and a standard deviation of $439. What is the operating cost for the lowest 2% of the airplanes?
Answer:
x1 = 4891.294
Explanation:
given data
mean μ = $5,793
standard deviation σ = $439
solution
we know here that
P(x < x1 ) = 0.02 .................1
so
[tex]P(\frac{x-\mu }{\sigma } < \frac{x1-\mu }{\sigma }) = 0.02[/tex]
so
[tex]P(z < \frac{x1-\mu }{\sigma }) = 0.02[/tex]
[tex]\frac{x1-\mu }{\sigma }[/tex] = invNorm(0.02)
so
x1 = μ + σ × invNorm(0.02) .....................2
we use here table for invNorm(0.02) and put value in eq 2
x1 = 5793 + 439 × (-2.054 )
x1 = 4891.294
