The beta coefficient A stock's contribution to the market risk of a well-diversified portfolio is called risk. According to the Capital Asset Pricing Model (CAPM), this risk can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market. Based on your understanding of the beta coefficient, indicate whether each statement in the following table is true or false: Statement True False A stock that is more volatile than the market will have a beta of less than 1.0. Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market Beta measures the volatility in stock movements relative to the market. There are different ways of calculating the beta coefficient for a stock. Using the information given in the following table, calculate the beta coefficient of Stocki: Data 35.00% 32.00% Stock I's standard deviation Market's standard deviation Correlation between Stock i and the market Beta coefficient of Stock i: 0.65 To calculate the beta of another company, using regression analysis, you get the value of Ra as 0.27. Based on your calculation, which of the following interpretations is true? The percentage of variance in the company's stock explained by the market is lower than that of a typical stock. The percentage of variance in the company's stock explained by the market is higher than that of a typical stock.

Answers

Answer 1

Solution :

1. The relevant risk is considered as the "unknown unknowns" which may occur due to the risk in everyday life. In all risky investments, it is unavoidable. The contribution of the stock to the market risk in a well diversified portfolio is called as the relevant risk. Diversification is the main strategy for minimizing the relevant risk.

2.

Statement : A stock that is more volatile than the market will have a beta of less than 1.0.

---- False, as it will be more volatile with that of the market.

Statement : Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market

---- True as beta of the market is 1 and therefore, the stock beta is also 1.

Statement : Beta measures the volatility in stock movements relative to the market.

--- True. The beta measures all the volatility in the stock moments relative to the market.

3. We know that :

[tex]$\text{Beta= Correlation coefficient} \times \frac{\text{SD of stock}}{\text{SD of market}} $[/tex]

        [tex]$=0.65 \times \frac{35}{32}$[/tex]

        = 0.71

4.  The percentage of the variance in the stock of the company that is explained by the market is lower than that of the typical stock.


Related Questions

The income expenditure model predicts that if the marginal propensity to consume is 0.75 and the federal government increases spending by $100 billion, real GDP will increase by:_______
a) $100 billion.
b) $750 billion.
c) $400 billion.
d) $300 billion.

Answers

Answer:

Option c ($400 billion) is the correct answer.

Explanation:

According to the question,

Government expenditure,

G = 100

Marginal propensity to consume,

c = 0.75

Now,

The autonomous spending multiplier will be:

⇒ [tex]\Delta Y = \frac{1}{1-c}\times \Delta G[/tex]

By substituting the values, we get

           [tex]=\frac{1}{1-0.75}\times 100[/tex]

           [tex]=4\times 100[/tex]

           [tex]=400[/tex]  

The risk that cannot be diversified away is Group of answer choices unique risk and non-systematic risk. market and non-systematic risk. unique and idiosyncratic risk. systematic risk. firm-specific risk. g

Answers

Answer:

firm-specific risk.

Explanation:

Firm-specific risk can be regarded as unsystematic risk tht is associated with a specific investment in a particular firm, and as regards to theory of finance this is completely diversifiable.

Under this risk, It is possible for an investor to lower their risk through increament of the number of investments that they are having in their portfolio. As regards investor,

specific risk can be regarded as hazard which applies to a specific company.

It should be noted that The risk that cannot be diversified away is firm-specific risk.

Explain the nature of the exchange-rate risk for each of the following, from the perspective of the U.S. firm or person. In your answer, include whether each is a long or short position in foreign currency.
a. A small U.S. firm sold experimental computer components to a Japanese firm, and it will receive payment of 1 million yen in 60 days.
b. An American college student receives a birthday gift of Japanese government bonds worth 10 million yen, and the bonds mature in 60 days.
c. A U.S. firm must repay a yen loan, principal plus interest totaling 100 million yen, coming due in 60 days.

Answers

Answer:

a. U.S. firm has long position in yen since it has asset in yen.

b. An American student has long position in yen since it has asset of bonds in yen.

c.  U.S. firm has liability position in yen, therefore it is short position.

Explanation:

a. The payment is to be received in next 60 days which means there is a risk of yen depreciation and then company will receive lower dollars. The company should hedge its exchange rate risk by selling yen now and buying dollars later.

b.  The gift received in the form of bonds will mature in 60 days. There is uncertainty in dollar rate, if dollar appreciates against yen then student will receive less yen.

c. The dollar rate is unpredictable for yen in next 60 days. If yen appreciate then dollar will depreciate against yen and therefore amount of loan repayment will increase.

Which of the following databases provides end-of-day daily prices and historical prices for U.S. Corporate, Treasury and Agency bonds and non-U.S. Corporate and Government bonds and covers over 80,000 issues daily?
A. FactSet Prices & Derived Analytics
B. SIX Telekurs Prices & Derived Analytics
C. TRACE Prices & Derived Analytics

Answers

Answer:

a. FactSet Prices & Derived Analytics

Explanation:

the answer to this question is option A. Factset prices and analytics gives financial data as well as analytic data to the global investment world. this company gets data directly from suppliers, these suppliers are usually third party data suppliers, other sources are form news channels, fro exchangers. it also provides analytic services to companies that want to track their portfolios.

The Cherrywood Fine Furniture Company finds itself with excess capacity in its plant and equipment for furniture manufacturing. This excess capacity will be useful in Group of answer choices

Answers

Answer: related diversification project

Explanation:

Related diversification simply means the scenario whereby a firm moves into a new industry which possesses vital similarities with the existing industry of the firm.

In this case, since Cherrywood Fine Furniture Company has excess capacity in its plant and equipment for furniture manufacturing, then this can be used for related diversification project.

Your client is employed by a large multinational corporation headquarteredin your city. She worked for the company in her native country for five years before being assigned to a U.S.-based position last year. she knows that her employer arranged for a visa for her, but he is unsure about what type of visa and doesn't have any of her paperwork. Your client is likely:__________A) an undocumented immigrantB) a foreign nationalC) a naturalized citizenD) a lawful permanent resident

Answers

Answer:

The correct options A) an undocumented immigrant.

Explanation:

Undocumented immigrants are foreign nationals who are in the United States without legal documentation.

These immigrants either entered the US without being screened as required by immigration processes, or they entered the country on a temporary visa and stayed over the visa's expiration date, rendering the visa invalid.

This implies that your client is likely an undocumented immigrant. Therefore, the correct options A) an undocumented immigrant.

Following the law is:______. a. unimportant as a standard of business behavior b. the maximum standard of behavior we expect from business c. an unrealistic expectation for business behavior d. the minimum standard of behavior we expect from business

Answers

Answer:

b. the maximum standard of behavior we expect from business

Explanation:

In the laws of business, it is expected according to the law that as much possible, we accept the maximum standard of behavior from any businesses. While doing a business, we all have to follow the business ethics and always follows the laws of the businesses. The behavior of business should be of maximum standard and should comply with the rules and ethics with the related businesses.

Thus the correct option is (b).

Rizio Co. purchases a machine for $9,600, terms 2/10, n/60, FOB shipping point. Rizio paid within the discount period and took the $192 discount. Transportation costs of $217 were paid by Rizio. The machine required mounting and power connections costing $664. Another $313 is paid to assemble the machine and $40 of materials are used to get it into operation. During installation, the machine was damaged and $245 worth of repairs were made.

Required:
Compute the cost recorded for this machine.

Answers

Answer:

$10,642

Explanation:

Computation to determine the cost recorded for this machine.

Amount included in the cost of equipment

Invoice price of machine $9,600

Less: Discount (9600 x 2%) ($192)

Net purchase price $9,408

($9,600-$192)

Freight charges $217

Mounting and power connections $664

Assembly $313

Materials used in adjusting $40

Total cost to be recorded $10,642

Therefore the cost recorded for this machine is $10,642

A court may pierce an LLC's veil if a.members treat the LLC like a separate organization. b.members keep their assests and the assets of the LLC separate. c.the LLC has too many members. d.members fail to provide adequate capital.

Answers

Answer:

d.members fail to provide adequate capital.

Explanation:

In the case when the court might have pierce an LLC veil so in that case the members could fail in order to give the enough capital as neither it is treated as the separate organization, nor its assets could keep as separate and also it has not so much members

So as per the given situation, the option d is correct

How do you feel when you buy a product that is overpriced?​

Answers

I feel kind of worried because you are paying to much and maybe if you need to pay rent for your house you won’t have enough money so I get worried to have that.

Hope this helps :)

On January 1, Year 1, Jing Company purchased office equipment that cost $15,200 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1,300. The equipment had a five-year useful life and a $5,700 expected salvage value. Assume that Jing Company earned $17,400 cash revenue and incurred $11,000 in cash expenses in Year 3. The company uses the straight-line method. The office equipment was sold on December 31, Year 3 for $8,900. What is the company's net income (loss) for Year 3?
a. $4,752 and $12,672
b. $2,200 and $12,760
c. $2,851 and $16,151
d. $0 and $13,300

Answers

Answer:

$3,120

Explanation:

First and foremost, annual depreciation expense is determined using the below straight-line method formula:

annual depreciation=total cost of equipment-salvage value/useful life

total cost of equipment=purchase price+ transportation cost

total cost of equipment=$15,200+$1,300

total cost of equipment=$16,500

salvage value=$5,700

useful life =5 years

annual depreciation=($16,500-$5,700)/5

annual depreciation=$2,160

net income=cash revenue-cash expenses-annual depreciation+profit/(loss) on disposal

profit or(loss)=sales proceeds-book value

book value=cost-accumulated depreciation for 3 years

book value=$16,500-($2160*3)=$10,020

profit/(loss) on disposal=$8,900-$10,020=-$1,120

net income= $17,400-$11,000-$2,160-$1,120

net income=$3,120

Leahy Corp. sells $300,000 of bonds to private investors. The bonds are due in five years, have a 6% coupon rate, and interest is paid semiannually. The bonds were sold to yield 4%. Group of answer choices The bonds were sold at a discount, with annual interest expenses more than $18,000 The bonds were sold at a discount, with annual interest expenses less than $18,000 The bonds were sold at a premium, with annual interest expenses more than $18,000 The bonds were sold at a premium, with annual interest expenses less than $18,000 The bonds were sold at par, with annual interest expenses equal to $18,000

Answers

Answer:

The bonds were sold at a premium, with annual interest expenses less than $18,000

Explanation:

r = 4% per annum = 4%*6/12 = 2%

n = 5 years * 2 = 10

Present value of annuity factor = [1 - (1+r)^(-n)] / r

Present value of annuity = [1 - (1.02)^(-10)] / 0.02

Present value of annuity = 8.982585

Interest payment = $300,000*6%*6/12

Interest payment = $9,000

Present value factor = 1/(1+r)^n

Present value factor = 1 / (1.02)^10

Present value factor = 0.8203483

Face value = $300,000

Selling value of bond = [8.982585*9000] + [0.8203483*300,000]

Selling value of = 80,843.265 + 246,104.49

Selling value of = 326,948. (Amount that bond are sold for is greater than 300,000 i.e at a premium).

Coupon rate payment = $300,000*6%

Coupon rate payment = $18,000

1) Suppose that South Pangean debt is $100 million and the interest rate it pays on that debt is 4 percent. That means its interest payments must be $___million.
2) If South Pangean expenditures are $30 million without interest payments, that means its expenditures with interest payments are $___million.

Answers

Answer and Explanation:

The computation is shown below:

a. The interest payment is

= 4% of $100 million

= $4 million

b. The interest expense without interest payment is

= Expenditures incurred without interest payment + interest payment

= $30 million + $4 million

= $34 million

The same should be considered and relevant

The following adjusted trial balance is the result of the adjustments made at the end of the month of July for Ladonna Douglas Corporation.
Ladonna Douglas Corporation
ADJUSTED TRIAL BALANCE
July 31, 20--
ACCOUNT TITLE DEBIT CREDIT
Cash 34,750.00
Accounts Receivable 9,750.00
Office Supplies 2,525.00
Store Supplies 4,785.00
Machinery 10,750.00
Accumulated Depreciation 2,150.00
Accounts Payable 14,300.00
Notes Payable 11,500.00
Common Stock 33,725.00
Retained Earnings 20,000.00
Dividends 13,250.00
Service Revenue 41,500.00
Wages Expense 37,425.00
Rent Expense 3,000.00
Advertising Expense 2,750.00
Office Supplies Expense 1,465.00
Store Supplies Expense 2,150.00
Depreciation Expense 575.00
Totals 123,175.00 123,175.00
Required:
Utilize these adjusted values to perform the closing entries for Ladonna Douglas Corporation.

Answers

Answer:

Jul-31

Dr Service revenue $41,500

Dr Retained earnings $5,865

Cr Wages expense $37,425

Cr Rent expense $3,000

Cr Advertising expense $2,750

Cr Office supplies expense $1,465

Cr Store supplies expense $2,150

Cr Depreciation expense $575

Jul-31

Dr Retained earnings $13,250

Cr Dividends $13,250

( To close dividends)

Explanation:

Preparation of the closing entries for Ladonna Douglas Corporation

First step is to prepare the income statement

INCOME STATEMENT

Revenues:

Service revenue $41,500

Less Expenses:

Wages expense $37,425

Rent expense $3,000

Advertising expense $2,750

Office supplies expense $1,465

Store supplies expense $2,150

Depreciation expense $575

Total expenses (-$47,365)

Net Loss ($5,865)

($41,500-$47,365)

Now let Prepare the closing entries

Jul-31

Dr Service revenue $41,500

Dr Retained earnings $5,865

Cr Wages expense $37,425

Cr Rent expense $3,000

Cr Advertising expense $2,750

Cr Office supplies expense $1,465

Cr Store supplies expense $2,150

Cr Depreciation expense $575

( To close income summary)

Jul-31

Dr Retained earnings $13,250

Cr Dividends $13,250

( To close dividends)

The expenditure and income approaches to calculating GDP arrive at the same final number, but they calculate that number in different ways. To illustrate, consider the possible effects of the following transactions on GDP:

1. Daesun pays Awesome Foods Market $1,100 to cater his daughter's engagement party. He's attracted by Awesome Foods Market's guarantee that he'll be happy with the catering, or he'll get his money back.
2. Awesome Foods Market pays JoAnn's Catering $950 to cater the party.
3. JoAnn's Catering buys plasticware worth $200 from Kostko.

Required:
Compute contributions to GDP, using the expenditure approach.

Answers

Answer:

Only the amount spent by Manuel would be in included in the calculation of GDP

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.  

Consumption spending includes spending by households on goods and services. Consumption spending includes :  

spending on durables - e.g. laptop  

spending on nondurables - e.g. clothes, food

spending on services  - e.g. payment of hospital bill  

the purchase of a textbook by a student is an example of consumption spending on durable goods

Investment - It includes purchases of goods and services made by businesses in the production of goods and services

the airplane purchased by the airline would be used to provide services for airline customers. Also, the packing boxes bought by Amazon would be used in delivering goods to customers  

Government spending - It includes government consumption expenditure and gross investment.  The purchase of a new  limousine for the president is an example of consumption expenditure

Items not included in the calculation off GDP includes:  

1. services not rendered to oneself

2. Activities not reported to the government  

3. illegal activities

4. sale or purchase of used products

5. sale or purchase of intermediate products

On the basis of this information, what were total maintenance costs when the company experienced 23,000 machine hours of activity, total maintenance costs averaged $34.30 per hour. When activity jumped to 27,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $27.30.

a. On the basis of this information, the variable cost per machine hour was:___________
b. On the basis of this information, the fixed cost was:___________-
c. On the basis of this information, what were total maintenance costs when the company experienced 25,000 machine hours?

Answers

Answer:

Results are below.

Explanation:

First, we need to calculate the total cost for each activity level:

High activity level= 27,000*27.3= $737,100

Low activity level= 23,000*34.3= $788,900

Now, using the high-low method, we can determine the variable and fixed costs:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (788,900 - 737,100) / (27,000 - 23,000)

Variable cost per unit= $12.95 per machine-hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 788,900 - (12.95*27,000)

Fixed costs= $439,250

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 737,100 - (12.95*23,000)

Fixed costs= $439,250

Finally, for 25,000 hours:

Total cost= 439,250 + 12.95*2,5000

Total cost= $763,000

Income Statement, Direct and Indirect Cost Concepts, Service Company
Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled $11,450; the beginning inventory of materials was $1,050, and the ending inventory of materials was $950. Payments for direct labor during the month totaled $25,570. Overhead incurred was $18,130 (including rent, utilities, and insurance, as well as payments of $14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent $2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to $3,650 for the month. Revenues for May were $102,100.
Required:
1. What was the cost of materials used for packaging and mailing services during May?
2. What was the prime cost for May?
3. What was the conversion cost for May?
4. What was the total cost of services for May?5. Prepare an income statement for May.
6. Of the overhead incurred, is any of it direct? Indirect? Explain.

Answers

Answer:

Send It Packing

1. The cost of materials used for packaging and mailing services during May is $11,550.

2. The prime cost for May is $51,170 (direct materials and labor and direct overhead)

3. The conversion cost for May is $43,700 (labor and overhead)

4. The total cost of services for May is $55,250

5. Income Statement for the month of May

Service Revenues                       $102,100

Cost of services:

Cost of materials used $11,550

Cost direct labor used  25,570

Overhead incurred         18,130  $55,250

Gross profit                                 $46,850

Franchise fee            $5,105

Advertising expense  2,750

Administrative costs  3,650       $11,505

Net income                                $35,345

6. The overhead incurred has $14,050 direct and $4,080 indirect costs.  The direct cost was paid to the courier companies for delivery services.  The indirect costs were incurred for rent, utilities, and insurance.

Explanation:

a) Data and Calculations:

Beginning inventory of materials = $1,050

Purchases of materials =               $11,450

Materials available for use =        $12,500

Ending inventory of materials =       $950

Cost of materials used =              $11,550

Cost direct labor used =               25,570

Overhead incurred =                      18,130

Franchise fee (5% of $102,100)      5,105

Advertising expense =                   2,750

Administrative costs                      3,650

Dylan invested $4200 into a continuously compounded account with an interest rate of 2.4%. How much will she have in the account after 11 years

Answers

Answer:

$47,322.21

Explanation:

the formula for calculating future value when there is continuous compounding is : A x e^r x N

A= amount

e = 2.7182818

N = number of years

r = interest rate

42,000xe^0.024 x 11 = $47,322.21

Answer:

A≈5469

Explanation:

Use the formula for calculating compound interest A=P0ert where P0=4200, r=0.024, and t=11. Substitute the values into the formula and simplify.

A=4200e0.024⋅11

A=4200e0.264

A=4200(1.302)

A=5468.94

After 11 years, the balance in the account is A≈5469, rounded to the nearest dollar.  

E-Eyes Bank just issued some new preferred stock. The issue will pay a $9 annual dividend in perpetuity, beginning 6 years from now. If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today

Answers

Answer:

Explanation:

Calculation to determine future sales discounts

Using this formula

Value of Preferred Stock in year 5 =Annual Dividend/Required Rate

Let Plug in the formula

Value of Preferred Stock today =(6/6%)/(1+6%)^5

Value of Preferred Stock today =100/(1+6%)^5

=124.58

Worldwide Manufacturing produces a unique valve and has the capacity to produce 50,000 valves annually. Currently Worldwide produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. What is the most likely behavior of total manufacturing costs and unit manufacturing costs, given this change

Answers

Answer:

c) Total manufacturing costs will increase and unit manufacturing costs will also decrease.

Explanation:

Based on the information given the most likely behavior of total manufacturing costs and unit manufacturing costs, given this change is that TOTAL MANUFACTURING COSTS WILL INCREASE AND UNIT MANUFACTURING COSTS WILL DECREASE since Manufacturing cost consists of DIRECT MATERIALS, DIRECT LABOR, VARIABLE MANUFACTURING OVERHEAD and FIXED MANUFACTURING OVERHEAD in which direct materials, direct labor and variable manufacturing overhead are Variable expense which means that if the production increases from $40,000 to $45,000 the total manufacturing cost will as well INCREASE but due to the FIXED MANUFACTURING COST involved , the unit manufacturing cost will have to decrease.

Please identify what type of error the following sentence includes: While searching for employment, I travelled to Shanghai, China; Los Angeles, California, and London, England.
A. Dangling modifier.
B. Capitalization.
C. Semicolon.
D. Redundancy.
E. Parallel structure.

Answers

Answer: C. Semicolon

Explanation:

The semicolon is used to link two independent clauses in a sentence. It can also be used for the introduction of a new sentence with words like therefore, however, etc.

In this question, the semicolon after China isn't appropriate, a comma will have been better in this regard. Therefore, the correct option is C.

The June 1 work in process inventory consisted of 4,100 units with $14,700 in materials cost and $12,300 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 36,600 units were started into production. The June 30 work in process inventory consisted of 9,400 units that were 100% complete with respect to materials and 50% complete with respect to conversion. 3. How many units were completed and transferred to finished goods during the period

Answers

Answer:

Units completed and transferred to finished goods during the period are:

= 31,300 units.

Explanation:

a) Data and Calculations:

                                                               Units   Materials    Conversion

Work in process inventory, June 1       4,100    $14,700        $12,300

Degree of completion of WIP                                100%               60%

Units started into production, June 36,600

Total units available in production   40,700

Work in process inventory, June 30  9,400        100%               50%

Units completed and transferred     31,300 (40,700 - 9,400)

What does the president consider to be the most important criterion when making political appointments to the bureaucracy?

Answers

Answer:

loyalty to the President

Explanation:

The President of the United States makes all the important political appointment of the bureaucracy to the Government offices. He does that appointing his favorite officials to the offices of the United States different federal agencies. One of the most important criteria that the President considers while appointing the bureaucracy officials is "loyalty to the President."

The President seeks those people who are loyal to him and follows every orders and advices of the President. The President keeps in mind that no one disobeys him and follows his order without any hesitations.

Thus the answer is "loyalty to the President."

Loco Pony Adventures rents clowns and ponies for children’s birthday parties. If the annual total cost of furnishing entertainment is given by TC = 0.5 Q 2 + 25 Q + 1,000, the average variable cost of catering to 30 birthday parties is:

Answers

Answer and Explanation:

The computation is shown below:

As we know that the variable cost is the cost that changed with the production

So the variable cost arise from TC should be

VC=0.5Q^2+25Q

= 0.5 × (30)^2+25 × 30

= 1200

And,  

AVC is

= VC ÷ Q

= 1200 ÷ 30

= 40

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 85,000 Total fixed manufacturing overhead cost $ 306,000 Variable manufacturing overhead per direct labor-hour $ 6.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 25 Total direct labor-hours 100 Direct materials $ 700 Direct labor cost $ 8,500 The total job cost for Job P951 is closest to:

Answers

Answer:

Total job cost  $10,160

Explanation:

The computation of the total job cost is shown below:

Predetermined fixed overhead rate

= total fixed manufacturing overhead expense ÷ total direct labor hours

= $306,000 ÷ $85000

= $3.60 Per hour

Now  

Particulars Cost

direct materials $700

Direct labor cost $8500

Fixed manufacturing overhead cost (100 × 3.60) $360

Variable manufacturing overhead cost (100 × 6.00) $600

Total job cost  $10,160

g if you deposit $2,000 into an account and it earns 6% interest, how much will you have in 11 years

Answers

Answer:

Amount earned = $3320

Explanation:

Given the following data;

Principal, P = $2,000

Interest rate, R = 6%

Time, T = 11 years

To find the simple interest;

S.I = PRT/100

S.I = (2000*6*11)/100

S.I = 20*6*11

S.I = $1320

Amount earned = Principal + S.I

Amount earned = 2000 + 1320

Amount earned = $3320

Darla posts notices in her neighborhood promising to pay $1,000 for the return of her missing Snowshoe Siamese cat. Two days later, Noelle finds the missing cat and returns it to Darla. What type of contract is this? a) A bilateral contract b) A subrogation contract c) An executory contract d) A unilateral contract e) This is not a valid contract

Answers

Answer: d) A unilateral contract

Explanation:

In a unilateral contract there is only one party to the contract that has to abide by the obligations specified and that is the offeror. The offeror offers to pay a certain amount of money if a certain thing is done. They will then pay the person that fulfills this service.

In this case, Darla is the offeror and she offers to pay anyone who can find her cat. When Noelle fulfills this service, Darla will then pay her what was promised. This is therefore a unilateral contract.

On December 31, 2020, Lipton, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest annually on December 31, and will mature on December 31, 2020 The following schedule was prepared by the accountant for 2020 Annual Interest Period Interest to Interest be paid Expense Amortization Unamortized Amount $75,000 51.750 Bond Carrying Value $2,925,000 2,948,250 1 $240,000 $263,250 $23,250 On the basis of the above information, answer the following questions What is the stated interest rate for this bond issue? Stated interest rate SHOW LIST OF ACCOUNTS What is the market interest rate for this bond issun? Market interest rate 5 What is the market interest rate for this bond issue? Market interest rate % SHOW LIST OF ACCOUNTS What was the selling price of the bonds as a percentage of the face value? (Round answer to 1 decimal place, e.g. 52.7.) Selling price SHOW LIST OF ACCOUNTS tudy Prepare the journal entry to record the sale of the bond issue on December 31, 2020. (Credit account titles are autofnatically indented wh manually.) Debit Date Account Titles and Explanation Dec 31, 2020 Credit SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and amortization of discount on December 31, 2021. (Credit account titles an entered. Do not indent manually.) Account Titles and Explanation Debit Dec 31, 2021 Date Credit ly SHOW LIST OF ACCOUNTS

Answers

Answer:

Lipton, Inc.

1. Stated interest = Annual interest/Face value of bonds * 100

= $240,000/$3,000,000 * 100

= 8%

2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100

= $263,250/$2,925,000 * 100

= 9%

3. The selling price of the bonds as a percentage of the face value

= $2,925,000/$3,000,000 * 100

= 97,5%

4. Journal Entries:

Date                Account Titles and Explanation    Debit          Credit

Dec 31, 2020 Cash                                           $2,925,000

                       Bonds Discounts                              75,000

                       Bonds Payable                                               $3,000,000

To record the issuance of the bonds at a discount.

5.   Journal Entries:

Date                Account Titles and Explanation    Debit          Credit

Dec 31, 2021  Interest Expense                         $263,250

                      Amortization of bond discounts                      $23,250

                      Cash                                                               $240,000

To record the payment of interest and amortization of discount.

Explanation:

a) Data and Calculations:

December 31, 2020

Face value of issued bonds = $3,000,000

Interest payment = December 31 annually

Unamortized Amount = $75,000

Price of issued bonds = $2,925,000 ($3,000,000 - $75,000)

Discount on bonds =           $75,000 ($3,000,000 - $2,925,000)

Schedule:

2020 Annual Interest Interest Expense Amortization Bond Carrying Value

                                                                                                $2,925,000

1            $240,000           $263,250           $23,250               2,948,250

1. Stated interest = Annual interest/Face value of bonds * 100

= $240,000/$3,000,000 * 100

= 8%

2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100

= $263,250/$2,925,000 * 100

= 9%

3. The selling price of the bonds as a percentage of the face value

= $2,925,000/$3,000,000 * 100

= 97,5%

Analysis:

December 31, 2020:

Cash $2,925,000 Bonds Discounts $75,000 Bonds Payable $3,000,000

December 31, 2021:

Interest Expense $263,250 Amortization of bond discounts $23,250 Cash $240,000

If the cost method is used to account for an investment in common stock, dividends received should be recorded only when 20% or more of the stock is owned. debited to the Stock Investments account. credited to the Dividend Revenue account. credited to the Stock Investments account.

Answers

Answer: credited to the Dividend Revenue account.

Explanation:

If a company is using the cost method is used to account for an investment in common stock, then that common stock should be treated as an asset. This means that dividends that come from that company will be seen as revenue so this would be recorded in the dividend revenue account.

It will be accounted for in the cashflow statement of the company as either investing cashflow or operating. This would depend on if the company is using IFRS or U.S. GAAP.

If a bank has a required reserve ratio of 25 percent and there is $10,000 in deposits, what is the maximum amount of loans that can be made by this bank

Answers

Answer: $40,000

Explanation:

Based on the information given in the question, the maximum amount of loans that can be made by this bank will be calculated as:

= Deposit × 1/Reserve ratio

= $10000 × 1/25%

= $10000 × 1/0.25

= $10000 × 4

= $40000

Therefore, the maximum increase in money supply is $40000.

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