n January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The only interest-bearing debt the company had outstanding during 2018 was long-term bonds with a book value of $11,600,000 and an effective interest rate of 11%. Construction expenditures incurred during 2018 were as follows: January 1 $ 660,000 March 1 696,000 July 31 576,000 September 30 760,000 December 31 460,000 Required: Calculate the amount of interest capitalized for 2018.

Answers

Answer 1

Answer:

$183,700

Explanation:

Calculation to determine the amount of interest capitalized for 2018.

First step is to calculate the Accumlated expenditure

Date Expenditure * Weight = Average

January 1 660000 * 12/12 =660,000

March 1 696000 * 10/12 = 580,000

July 31 576000 * 5/12 = 240,000

September 30 760000 * 3/12 =190,000

December 31 460000 * 0/12 = 0

Accumulated expenditure=660,000+580,000+240,000+190,000

Accumulated expenditure=$1,670,000

Now let determine the amount of interest capitalized for 2018

Interest capitalized for 2018=$1,670,000 * 11%

Interest capitalized for 2018=$183,700

Therefore the amount of interest capitalized for 2018 is $183,700


Related Questions

A project has an expected risky cash flow of $500 in year 3. The risk-free rate is 4%, the expected market rate of return is 14%, and the project's beta is 1.20. Calculate the certainty equivalent cash flow for year 3, CEQ3. (Assume CAPM holds.)

Answers

The certainty equivalent cash flow for year 3, CEQ3 is $360.33

The computation of the certainty equivalent cash flow for year 3 is as follows:

But before that, the cost of equity should be determined via using the Capital Asset Pricing Model (CAPM).

Cost of equity = Risk-free rate + beta × (expected market rate of return - risk-free rate)

= 4% + 1.20 × (14% - 4%)

= 16%

Now the certainty equivalent cash flow for year 3 is

= $500 ÷ (1+ 0.16)^3

= $360.33

Therefore we can conclude that the certainty equivalent cash flow for year 3, CEQ3 is $360.33

Learn more about the CAPM here: brainly.com/question/14531617

The seven main functions of marketing summarize what it takes to _____.

Answers

Explanation:

The seven functions of marketing are distribution, market research, setting prices, finance, product management, promotional channels and matching products to consumers

I guess this may help

Answer:

All of the above

Explanation:

just took it

Commercial banks, savings and loan associations, and credit unions: Group of answer choices deposit their excess funds with the U.S. Treasury. accept deposits and make loans. specialize solely in loaning money for home mortgages.

Answers

Answer:

accept deposits and make loans.

Explanation:

Credit union is a form of financial institution owned by members of the union. The union provides financial services similar to the services provided by commercial banks

A commercial bank is a financial institution that accepts deposits from customers, provide loans to customers and provide financial products t costumers. Only commercial banks. deposit their excess funds with the U.S. Treasury.

A  savings and loan associations is a financial institution that specializes in helping customers get residential mortgages.

The characteristic that these three financial institutions share is that they accept deposits and make loans

Training needs analysis

Answers

Answer:

is it a true or false question?

Abigail (Abby) Boxer, age 38, is a single mother (birthdate April 28, 1982) working as a civilian accountant for the U.S. Army. Her Social Security number is 676-73-3311 and she lives at 3456 S Career Avenue, Sioux Falls, SD 57107. Helen, Abby's 18-year-old daughter (Social Security number 676-73-3312 and birthdate April 16, 2002), is a dependent child living with her mother, and she does not qualify for the child tax credit due to her age but does qualify for the other dependent credit of $500. Abby received a Form W-2 from the U.S. Department of Defense.

Answers

Answer:

Step 1 of 4

Aby is a single mother with a dependent child. She files Form 1040A. The form is attached herewith.Some of the highlights are given below:

• Gross Income is calculated as follows.

• Adjusted gross income is same as gross income as there are no deductions for AGI. So, adjusted gross income is $42,730 (line 21).

• Standard deduction under Head of Households is $8,700 (line 24).

• She claims one personal and one dependent exemption. So, her total exemptions are (line 26).

Freya and her team resolved several problems and came up with some great techniques during their latest project. What should they do to help improve the performance of future projects?

Answers

They should do identifying and documenting the lessons that are learned for improving out the performance of upcoming projects

The performance of the upcoming projects should depend upon the following information:

Return on investment.Cost of quality.Cost performance.Cycle time of the project.ProductivityPlanning the strategy, identifying it, analyzed it, and executed it.

These above factors should be for the performance

So in order to improve the performance of the upcoming projects. we should do the identification and documenting the lessons that are learned.

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Rank the following asserts of a commercial Bank in order of decreasing liquidity. (a) market loans. (b) Reserves with the bank of Ghana. (c) cash. (d) personal loans. (e) sales and repurchase agreements (repos). (f) mortgages. (g) Government bonds (of from one to five years to motuity)​

Answers

The rankings are as follows;

Cash.Ghana bank.Personal loan.Market loan.Sales and repurchase agreements.Mortgage.Government bonds.

We want to help the user to understand the term liquidity before giving the explanation with respect to ranking the following terms:

Liquidity means an asset or security that should be converted into cash without impacting the market price.

Here the most liquids are the ones that could be converted into cash in an easy manner but we have to rank in order of reducing the liquidity.

Cash = more liquid.Ghana bank along with reserves = less than liquid as cash.Personal loan = less liquid.Market loan = less liquid.Sale & repurchase agreements = less liquid.Mortgage = reduce liquidity. Government bonds.

We ranked according to high to low liquidity.

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Mavs Inc. wishes to determine its cost of common stock equity, rs. The market price, P0, of its common stock is $40.07 per share. The firm expects to pay a dividend, D1, of $4.20 at the end of the coming year, 2021. The dividends paid on the outstanding stock over the past 6 years (2015â2020) were as follows:

2015 $3.60
2016 3.65
2017 3.70
2018 3.85
2019 4.00
2020 4.10

What is the cost of common stock equity financing?

Answers

Answer:

13.12%

Explanation:

Using the Gordon growth rate model, the cost of common stock equity can be determined using the formula below:

cost of common equity=expected dividend/current market price+growth rate

expected dividend=dividend in a year's time=D1= $4.20

current market price=P0=$40.07

The growth rate of the dividend can be ascertained by using the future value below:

FV=PV*(1+g)^n

FV=2020 dividend=$4.10

PV=2015 dividend=$3.60

g=growth rate=unknown

n=numbr of years between 2015 and 2020=5(dividend has grown for only 5 years not 6 years)

$4.10=$3.60*(1+g)^5

$4.10/$3.60=(1+g)^5

$4.10/$3.60 can be rewritten thus($4.10/$3.60)^1

($4.10/$3.60)^1=(1+g)^5

divide indexes on both sides by 5

($4.10/$3.60)^(1/5)=1+g

g=($4.10/$3.60)^(1/5)-1

g=2.64%

cost of common equity=($4.20/$40.07)+2.64%

cost of common equity=13.12%

How does Spotify implement Salesforce?

Any answer is very appreciated^^!!​

Answers

Explanation:

With Salesforce, Spotify has continued to offer amazing customer service since its days as a small startup. The company started by using Desk.com for fast customer support and later migrated to an integrated Sales Cloud and Service Cloud system for a customised solution with 360-degree customer views and collaboration.

When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from: a. high-volume to low-volume products. b. low-volume to high-volume products. c. specialized to standardized products. d. standardized to specialized products.

Answers

Answer: A. high-volume to low-volume products

Explanation:

Batch-level costs refers to the expenses that are related to the group of products which cannot be traced back to an individual item. The cost of production are incurred for the production of a batch.

Activity-based costing refers to the method whereby overhead and indirect costs are assigned to the products and services.

When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from a high-volume to low-volume products.

Which of the following statements is true?

a. Overhead can be applied slowly as a job is worked on.
b. Overhead can be applied when the job is completed.
c. Overhead should be applied to any job not completed at year-end in order to properly value the work in process inventory.

Answers

Answer:

the answer should be

a. Overhead can be applied slowly as a job is worked on.

Answer:

A: overhead can be applied slowly as a job is worked on.

Explanation:

Im pretty sure i already learned that! so trust it!

hope it helps!

if its wrong report my answer!

Martin Corporation’s (a C corporation) bookkeeper told the owner that she could not have all the tax information ready for the accountant immediately after the tax year end of June 30. She was having surgery and asked if the tax return could be postponed. The accountant’s answer should be:

Answers

Answer:

Yes, we can request an extension until the following April 15

Explanation:

In general, there is a room for automatic extension of 6 months for

a corporation to file its income tax return so far appropriate form (7004) has been filed by the corporation, and

estimated unpaid tax liability is been paid before date of the return is due. It should be noted that until tax year 2026, Until June 30 fiscal-year which is tax year 2026 there is duration of 7 months given to the corporation. Though there could be rovoking of the extension by The IRS at any time. tax return of Martin will be due under normall condition by September 15, but since extension comes in it will be due April 15.

Research on the increasing rate of teenage pregnancy with research methods

Answers

Answer:

Ghana constitute to record high rate of Ap.Recent national report shows that 11percent of adolescent age 15 to 19 had had a live birth of which 3 percent with first child and 14 percent has began childbearing

69.5% teenage people are pregnance

The direct method of reporting operating cash flows: ________
a. Separately lists cash receipts and payments.
b. Must be used by all companies.
c. Is used by most companies.
d. Is considered supplementary disclosure.
e. Is not recommended by the FASB, but is commonly used.

Answers

Answer:

e. Is not recommended by the FASB, but is commonly used.

Explanation:

A statement of cash flows is also known as cash flow statement and it is a financial statement which is used to illustrate how changes in income and various account of the balance sheet affect cash and cash equivalents.

The statement of cash flows is also used by financial experts or accountants to breakdown the cash-flow analysis into;

1. Cash-flow from investing activities: it represents the cash flow from investment such as proceeds from the sale of plant, equipments etc.

2. Cash-flow from financing activities: it represents the cash flow from debt or equity. Typically, it's the costs used in a financing a business.

3. Cash-flow from operating activities: it represents cash-flow and transactions from operational business activities such as employee salary, sales of goods etc.

Generally, the statement of cash flows provides financial information about an organization's operating profitability and how it use its operating cash flow.

Financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.

In Financial accounting, the direct method of reporting operating cash flows uses actual cash inflows and outflows from the operating activities of a company by generating data from the income statement (cash receipts and cash disbursements/payments).

However, the direct method of reporting operating cash flows is not recommended by the FASB, but it's commonly used.

This ultimately implies that, it's a recommended accounting method, but it's not an accounting standard required by the financial accounting standards board (FASB).

1) Tesla needs to order custom processor chipsfior their cars. The annual demand is
50,000. It cost $5000 to place an order. The chips must be stored in an environmentally friendly location and cost $50 per chip to store annually. The factory is open 360 days a
year. What is the optimal order quantity? What is the number of workdays in an order cycle?



2) The Lancaster Tesla dealer is open to the public for customers to come to the store and test drive a car. On any given Saturday customer arrive at a rate of 5 customer per hour. It takes 1 employee about 30 minutes to complete the test drive with a customer. Some customers take shorter, some take longer. There is expected to be a wait, but what is the average number of customers waiting for service? This will allow Tesla to build the correct size waiting room. Also how long do customers wait in line. This will allow Tesla to plan alternative activities that can take place during the wait. As a manager, what would you recommend Tesla do about the current system in order to improve customer service?

Answers

Tesla needs to identify the optimal order size for its product processor chipsfior, the correct order size can be determined by Economic order quantity.

EOQ  =  [tex]\sqrt{\frac{2*D*S}{H} }[/tex]

EOQ = 3162.28

Economic order quantity is the optimal quantity which is to be order in the business. This is inventory management technique.

The number of work days in order cycle are 50,000 / 3162 = 15.8

Tesla should extend its waiting room and allow more customers to wait in the room for they customer service issues. There can be feedback on the service provided so that there can be improvement.

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On December 31, Jacoby Company's Prepaid Rent account had a balance before adjustment of $6,000. Three months' rent was paid in advance on December 1, the first day of the lease term. The adjusting entry needed on December 31 is:

Answers

Answer:

Debit Rent Expense $2,000; credit Prepaid Rent $2,000.

Explanation:

Assuming On December 31, the Company's Prepaid Rent account had a balance before adjustment of the amount of $6,000 which means that if the Three months' rent was paid in advance on December 1, The adjusting entry needed on December 31 is:

Debit Rent Expense $2,000

Credit Prepaid Rent $2,000.

($6000/3month)

(To record Rent Expense)

The following transactions occurred during July:
1. Received $900 cash for services provided to a customer during July.
2. Received $2,200 cash investment from Barbara Hanson, the owner of the business.
3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June.
4. Provided services to a customer on credit, $375.
5. Borrowed $6,000 from the bank by signing a promissory note.
6. Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?

Answers

Answer:

$1,275

Explanation:

Calculation to determine the amount of revenue for July

Using this formula

Revenue=Cash received for services provided+Services provided customer on credit

Let plug in the formula

Revenue=$900 + $375

Revenue = $1,275

Therefore the amount of revenue for July is $1,275

John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6 percent per year. What is the remaining balance (or value) of the mortgage after the payment of the fifth annual installment?

Answers

Answer:

$211,689. 53

Explanation:

Calculation to determine the remaining balance (or value) of the mortgage after the payment of the fifth annual installment

Step 1 is to compute PMT using Financial calculator

I = 6%

N = 20

PV = 250,000

FV = 0

PMT=?

Hence,

PMT = 21,796.14.

Now let determine the PV using Financial calculator

I = 6%

N = 15

PMT = 21,796.14

PV=?

Hence,

PV = $211,689. 53

Therefore the remaining balance (or value) of the mortgage after the payment of the fifth annual installment is $211,689. 53

How and When to accomplish all Assistant Manager responsibilities in a shift in a fast food restaurant.

Answers

Answer:

Researching new wholesale food suppliers and negotiating prices

Calculating future needs in kitchenware and equipment and placing orders, as needed

Managing and storing vendors’ contracts and invoices

Overseeing restaurant staff performance, ensuring quality dining

Explanation:

Responsibilities

Research new wholesale food suppliers and negotiate prices

Calculate future needs in kitchenware and equipment and place orders, as needed

Manage and store vendors’ contracts and invoices

Coordinate communication between front of the house and back of the house staff

Prepare shift schedules

Process payroll for all restaurant staff

Supervise kitchen and wait staff and provide assistance, as needed

Keep detailed records of daily, weekly and monthly costs and revenues

Arrange for new employees’ proper onboarding (scheduling trainings and ordering uniforms)

Monitor compliance with safety and hygiene regulations

Gather guests’ feedback and recommend improvements to our menus

Elderly woman purchases a table from a local furniture store for $5,000. She decides she does not want the table because of a defect. The woman successfully cancels the payment on the credit card for payment of the table, and continues to keep the table despite the store requesting to pick the table up from woman. What statement is true:

Answers

Answer:

She cannot keep the table

Explanation:

In the given scenario we will look at the different parties and wether they are satisfied with the transaction.

The buyer picked the table after which she complained about a defect and refused to pay. Because she refused to pay she cannot take ownership of the table so she has to return it.

The store did not receive payment for the table so they have the right to request for the table back from the elderly woman.

So she cannot keep the table.

The statement that is true is that she cannot keep the table

In the given scenario, we will look at the different parties and whether they are satisfied with the transaction.

Here, the buyer picked the table after which she complained about a defect and refused to pay. Because she refused to pay she cannot take ownership of the table so she has to return it.

Now, the store did not receive payment for the table so they have the right to request for the table back from the elderly woman.

In conclusion, the statement that is true is that she cannot keep the table

Read more about statement

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The rate at which revenue was generated​ (in millions of dollars per​ year) for a certain company for the years 2010 through 2016 can be approximated by ​f(t)=348e0.22t ​(10≤t≤​16), where t=10 corresponds to the start of the year 2010. Find and interpret ∫1016f(t)dt.

Answers

The revenue of a company represents the income generated by the company within a time frame. The total revenue generated by the company from the start of 2010 to the start of 2016 is $39.16 billion

Given that:

[tex]f(t) = 348e^{0.22t}[/tex]  [tex]10 \le t \le 16[/tex]

First, we calculate the integral

[tex]\int\limits^{16}_{10} {f(t)} \, dt[/tex]

This is calculated as:

[tex]\int\limits^{16}_{10} {f(t)} \, dt = \int\limits^{16}_{10} {348e^{0.22t}} \, dt[/tex]

Remove the constant

[tex]\int\limits^{16}_{10} {f(t)} \, dt = 348\int\limits^{16}_{10} {e^{0.22t}} \, dt[/tex]

Now, integrate

[tex]\int\limits^{16}_{10} {f(t)} \, dt = 348 \times \frac{1}{0.22} (e^{0.22t})|\limits^{16}_{10}[/tex]

[tex]\int\limits^{16}_{10} {f(t)} \, dt = \frac{ 348}{0.22} (e^{0.22t})|\limits^{16}_{10}[/tex]

Expand

[tex]\int\limits^{16}_{10} {f(t)} \, dt = \frac{ 348}{0.22} (e^{0.22\times 16} -e^{0.22\times 10} )[/tex]

[tex]\int\limits^{16}_{10} {f(t)} \, dt = \frac{ 348}{0.22} (e^{3.52} -e^{2.2} )[/tex]

[tex]\int\limits^{16}_{10} {f(t)} \, dt = \frac{ 348}{0.22} \times 24.759[/tex]

[tex]\int\limits^{16}_{10} {f(t)} \, dt = 39164.2[/tex]

From the question

[tex]t = 10[/tex] represents the start of 2010.

This means that

[tex]t = 16[/tex] represents the start of 2016.

So, the interpretation is:

The total revenue from the start of 2010 to the start of 2016 is $39.16 billion

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An individual taxpayer reports the following items for the current year: Ordinary income from Partnership A, operating a movie theater in which the taxpayer materially participates $70,000 Net loss from Partnership B, operating an equipment rental business in which the taxpayer does not materially participate (9,000) Rental income from building rented to a third party 7,000 Short-term capital gain from sale of stock 4,000 What is the taxpayer’s adjusted gross income for the year?

Answers

Answer:

$74,000

Explanation:

Calculation to determine the taxpayer’s adjusted gross income for the year

Taxpayer’s adjusted gross income=Net loss from Partnership B+Capital gain from sale of stock

Let plug in the formula

Taxpayer’s adjusted gross income=$70,000+ $4,000

Taxpayer’s adjusted gross income=$74,000

Therefore the taxpayer’s adjusted gross income for the year is $74,000

Calculate gross profit for the following situation: National Storage Company had sales of $1,000,000, sales discounts of $2,500, sales returns and allowances of $15,000, and a cost of goods sold of $525,000.

Answers

Answer:

$475,500

Explanation:

Sales is $1,000The discountscount is $2500

Sales return and allowances are $15,000

The cost of goods sold is $525,000

Therefore the gross profit can be calculated as follows

= 1,000,000-2,500-15,000-525,000

= 457,500

Hence the gross profit is $475,500

most expensive startup option is usually A. starting a business from scratch B. buying a franchise C. buying an established business D. renting a building​

Answers

C. buying an established business

If you look at it it kind of depends on the business and their success rates.

A particular forecasting model was used to forecast a six-month period. Here are the forecasts and actual demands that resulted: FORECAST ACTUAL April 244 344 May 318 468 June 393 493 July 343 293 August 368 268 September 443 568 a. Find the tracking signal for each month.

Answers

Answer:

MONTH    TRACKING SIGNAL

April                    1

May                    2

June                   3

July                     3

August                2

September         3

Explanation:

Given the data in the question;

   A              B                C              D          E            F                   G

Month     Forecast     Actual      Error     |Error|     RSFE          MAD

                                                                              cumulative

                                                    C-D       |C-D|       of D          

April             244         344          100        100        100            100.00

May              318          468          150       150         250           125.00

June             393         493          100       100         350           116.67

July               343         293         -50        50          300           100.00

August          368         268        -100      100          200           100.00

September   443         568        125        125          325            104.17

the tracking signal for each  month will be;

Tracking Signal =  

Running Sum of Forecast Errors (RSFE) / Mean Absolute Deviation (MAD)

so substitute

Month of APRIL;

Tracking signal = 100 / 100.00  = 1

Month of MAY;

Tracking signal = 250 / 125.00  = 2

Month of JUNE;

Tracking signal = 350 / 116.67 = 2.9999 ≈ 3

Month of JULY;

Tracking signal = 300 / 100.00 = 3

Month of AUGUST;

Tracking signal = 200 / 100 = 2

Month of SEPTEMBER;  

Tracking signal = 325 / 104.17 = 3.11 ≈ 3

Therefore,

MONTH    TRACKING SIGNAL

April                    1

May                    2

June                   3

July                     3

August                2

September         3

The Zeller Corporation's stockholders' equity accounts have the following balances as of December 31, 2016:

Common stock, $10 par (30,000 shares issued and outstanding) $300,000
Additional paid-in capital 2,000,000
Retained earnings 5,700,000
Total stockholders' equity $8,000,000

Refer to above table. On January 2, 2017, the board of directors of Zeller declared a 5% stock dividend to be distributed on January 31, 2017. The market price per share of Zeller's common stock was $30 on January 2 and $32 on January 31. As a result of this stock dividend, the retained earnings account should be decreased by :___________

Answers

Answer:

The Zeller Corporation

As a result of this stock dividend, the retained earnings account should be decreased by :___________

$15,000.

Explanation:

a) Data and Calculations:

The Zeller Corporation's stockholders' equity accounts have the following balances as of December 31, 2016:

Common stock, $10 par (30,000 shares issued and outstanding) $300,000

Additional paid-in capital 2,000,000

Retained earnings 5,700,000

Total stockholders' equity $8,000,000

Analysis:

January 2, 2017: Stock dividend $15,000 (30,000 * 5% = 1,500 shares * $10) Stock dividend distributable $15,000

January 31, 2017: Retained Earnings $15,000 Stock Dividend $15,000

Stock dividend distributable $15,000 Common stock $15,000

If the State of California raised the average state consumer sales tax rate from 9.25 percent to 15 percent, then this sales tax will have its heavist impact on and raise the marginal cost curves for California businesses.

a. True
b. False

Answers

Answer: False

Explanation:

Consumer sales tax is not charged to businesses but rather to the customers through a business. The tax would therefore increase the prices of goods and services for consumers and not the businesses.

The businesses would therefore not see their marginal cost curves increase. They could still be affected however, by Californians demanding less goods and services because it is now more expensive for them on account of the new sales tax.

Integrity Accounting Firm provides various financial services to organizations. Integrity has decided to price its jobs at the total variable costs of the job plus 14.3 percent. The job for a medium-sized dance club client included the following costs:

Direct materials $20,000
Direct labor (partners and staff accountants) 150,000
Depreciation (using straight-line method) on
Integrity’s office building 50,000

Required:
Calculate the price charged by The J. Escobar Law Firm to the dance club.

Answers

Answer:

$194,310

Explanation:

The price charged by The J. Escobar Law Firm to the dance club is as follows:

Direct Materials                           $20,000

Direct Labour                              $150,000

Total Variable Cost of Jobs       $170,000

14.3% Mark up on TVC               $24,310

The price charged ro the club $194,310

Bob and Alice enter a contract that is within the statute of frauds. Now, Bob wants to get out of the contract on the basis that it is unenforceable pursuant to the statute of frauds. In response, Alice produces a writing that she says evidences the contract. In order for this writing to support the claim that the contract is enforceable against Bob, it must have been signed by:

Answers

Answer:

The writing must be signed by Bob himself, or his representative or any person who has the authority to act for him.  

Explanation:

Statute of frauds is defined as a provision that only allows certain transactions will be valid only when they are in writing.

Such transactions include sale of land, transactions that are above $500, and transactions that will last over a year.

In the given scenario Bob wants to pull out of the contract because it is not enforceable according to the statue of frauds.

Alice produces a writing that she says evidences the contract.

However for this to be enforceable it must be signed by Bob himself, or his representative or any person who has the authority to act for him.  

If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 1 decimal place.)

Answers

Answer:

-1.9%.

Explanation:

The computation of the abnormal change in the stock price of ford should be given below:

Given that

The return on the market is 8%.

So, the forecast monthly return for Ford is

= 0.10% + (1.1 × 8%)

= 8.9%.

And, the Ford’s actual return was 7%,

So,

the abnormal return be

= 7% - 8.9%

= -1.9%.

Other Questions
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