The terms of trade must be higher (graphically to the right) of a nation's own production __________________

Answers

Answer 1

Answer: cost ratio

Explanation: The terms of trade must be higher (graphically to the right) of a nation's own production cost ratio. The production cost ratio allows small-scale manufacturers to determine their cost more accurately as well as control known cost parameters and is a method that can be adapted and applied to any business.

In a multi-product manufacturing firm, the production cost ratio is necessary for accurate compilation and allocation of production costs to each category of product especially when both the Production Time and the Production Runs are not the same and/or when fixed labor, overhead and other costs are drawn from the same pool. When the ratio is not applied results in a skewed allocation of production costs. This in turn can affect the business as it becomes difficult to ascertain the products whose production are more profitable to the business.


Related Questions

Fredo, Inc., purchased 10% of Sonny Enterprises for $1,000,000 on January 1, 2018. Sonny recognized a total of $340,000 net income during 2018, paid $24,000 of dividends to Fredo during 2018, and at December 31, 2018, the market value of the Sonny investment increased to $1,034,000. Required: Prepare the journal entries necessary to account for the Sonny investment, assuming that Fredo (1) lacks significant influence or (2) has significant influence over the operating and financial policies of the investee.
Required 1
Record the entry for investment in Sonny Enterprises.
Record the entry for cash dividend received.
Record the net unrealized holding gain or loss for an available-for-sale investment.
Required 2:
Record the entry for investment in Sonny Enterprises.
Record the revenue from Sonny Enterprise during 2018.
Record the receipt of dividend during 2018.

Answers

Answer and Explanation:

The Journal entry is shown below:-

As per requirement 1

1. Investment in Sonny Enterprises Dr, $1,000,000

            To Cash $1,000,000

(Being investment is recorded)

2. Cash Dr, $24,000

          To Dividend revenue $24,000

(Being cash dividend received is recorded)

3. Fair value adjustment Dr, $34,000

            To Unrealized holding gain or loss - OCI $34,000

(Being investment at fair value is recorded)

As per requirement 2

1. Investment in Sonny Enterprises Dr, $1,000,000

           To Cash $1,000,000

(Being investment is recorded)

2. Investment in Sonny Enterprises Dr, $34,000

        To Investment Income $34,000 ($340,000 × 10%)

(Being revenue from Sonny is recorded)

3. Cash Dr, $24,000

            To Investment in Sonny Enterprises $24,000

(Being the receipt of dividend is recorded)

The most powerful of the five competitive forces is usually: Select one: a. The competitive pressures that stem from ready availability b. The competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage c. The competitive pressures associated with the potential entry of new competitors d. The bargaining power and leverage that large customers are able to exercise

Answers

Answer:

b. The competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage.

Explanation:

The Porter’s five forces of competition is a framework developed by Michael E. Porter in 1979, it is used to measure and analyze an organization's competitiveness in a business environment.

The Porter's five forces of competition framework are:

1. The bargaining power of suppliers.

2. The bargaining power of customers.

3. Threat posed by substitute products.

4. Threats posed by new entrants.

5. Threats posed by existing rivals in the industry.

The most powerful of the five competitive forces is usually the competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage. When the amount of competitors (sellers), as well as the quantity of goods and services they provide are large, the lesser their competitive strengths or advantage in the market because the customers have a large pool of finished goods and services to choose from and vice-versa.

In the context of early advertising, the invention of the _____ made advertising via posters, handbills, and signs possible.

Answers

Answer:

The printing press.

Explanation:

The printing press and its form of works are known to be an early age form that have been used and still in use for advertising. Advertisements of this form are seen in form of newspapers or magazines and are sometimes included as brochures or fliers. Write ups used in the print media to grab the attention of the specific target audience comes under the purview of print advertising.

Newspapers readers and also other publications methods have a tendency to browse the print ads that they come across. Moves to purchase these products could possibly not be instantaneous, but it does settle down in their subconscious mind. Next time they see the product in the market, they are tempted to buy it.

On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 235,000 September 1, 2021 $ 342,000 December 31, 2021 $ 342,000 March 31, 2022 $ 342,000 September 30, 2022 $ 235,000 Kendall borrowed $764,000 on a construction loan at 7% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,570,000 in 7% bonds payable outstanding in 2021 and 2022. Average accumulated expenditures for 2021 was:

Answers

Answer:

Average accumulated expenditures for 2021 was: $349,000.

Explanation:

Note: See the attached excel file for the calculation of the Average accumulated expenditures for 2021.

Average accumulated expenditures is calculated by adding the weighted average amount of each expenditure which is the product of the weight of each expenditure in a year and the amount of each expenditure. That is;

Weight of each expenditure = Number of relevant months the expenditure is used 2021 / 12 months

Weighted average amount of each expenditure = Weight of each expenditure * The amount of the expenditure

A corporate bond currently yields 8.5%. Municipal bonds with the same risk, maturity, and liquidity currently yield 5.5%. At what tax rate would investors be indifferent between the two bonds?

Answers

Answer: 35.29%

Explanation:

Municipal Bonds are attractive in that they give the tax benefit of being tax exempt whereas a corporate bond is liable for taxation. The tax rate that will therefore make an investor indifferent between the two bonds is the one that will equate the Corporate bond's yield net of tax to the yield on the Municipal bond.

5.5% = 8.5% * ( 1 - x)

5.5% = 8.5% - 0.085x

0.085x = 8.5% - 5.5%

0.085x = 3%

x = 35.29%

What is the value of a zero-coupon bond with a par value of $1,000 and a yield to maturity of 6.60%? The bond has 19 years to maturity.

Answers

Answer:

$296.90

Explanation:

For computing the value of the zero coupon bond we need to apply the present value formula i.e to be shown in the attachment below:

Given that,  

Future value = $1,000

Rate of interest = 6.60%

NPER = 19 years

PMT = $0

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the value of zero coupon bond is would be $296.90

A retired customer has an existing stock portfolio held in a cash account. He has heard that "leveraging" his portfolio can increase his return. The portfolio holds blue chip stocks that pay current dividends. He wants to transfer the positions to a margin account and use them as collateral to buy more stocks of the same blue chip companies. Which statement is TRUE

Answers

Answer: C. This is not an appropriate strategy because the customer's income will decline

Explanation:

A. The options for the question are:

This is an appropriate strategy that will increase the customer's income

B. This is not an appropriate strategy because the customer's tax liability will increase if the securities appreciate and are sold

C. This is not an appropriate strategy because the customer's income will decline

D. This is an appropriate strategy because the customer has the potential for larger capital gains

From the information that have been provided in the question, we can see that the customer needs income but based on the information that have been provided in the question, the interest that will be charged will eat up the dividend paid by the the stock.

Therefore, this is not an appropriate strategy because the customer's income will decline.

An investor holds a 10 year bond pays a coupon rate of 9%. The yeid to maturity of the bond is 10% . The bond is trading:

Answers

Answer:

the bond is trading at a discount

Explanation:

There is an inverse relationship between the yield and the price of the bond.

As the yield goes up, the price of the bond goes down and as the yield goes down, the price of the bond goes up.

The yield - 10%, is greater than the coupon rate - 9%, the price will be less than the par value, and we say that the bond is trading at a discount.

Chuck has $2,500 invested in a bank that pays 4% annually. The length of time it will take for his funds to double is closest to:

Answers

Answer:

The answer is 17.67 years.

Explanation:

Present value is $2,500

Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)

Interest rate is 4%

Number of years or periods to reach this $5,000 is unknown. So we are looking for this.

To compute this number of periods, lets use Financial calculator.

I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.

Therefore, the number of years to accumulate to $5,000 is 17.67 years

Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 10% per year. a. If r = 15% and DIV1 = $3, what is the value of a share?

Answers

Answer:

$12

Explanation:

The computation of the value of the share is shown below:

Value of the share is

= Dividend ÷ (Required rate of return - shrinking rate)

where,

The Dividend is $3

The Required rate of return is 15%

And the shrinking rate is 10%

Now placing these values to the above formula

= $3 ÷ (15% - (-10%)

= $3 ÷ 25%

= $12

This year Baldwin achieved an ROE of 5.9%. Suppose management takes measures that increase Asset turnover (Sales/Total Assets) next year. Assuming Sales, Profits, and financial leverage remain the same, what effect would you expect this action to have on Baldwin's ROE

Answers

Answer:

ROE will increase

Explanation:

This action will cause an increase in Baldwin's ROE

ROE is the same as return on Equity. The return on equity is equal to the net profit margin multiplied by asset turnover which is also multiplied by equity multiplier.

From the above, if asset turnover is being increased by measures taken by the management, the ROE will also have to increase too. Firms will have to be generating more sales per units of the assets that they own.

Suppose purchasing power parity holds. If the price level in the United States is 100 dollars per good and the price level in Japan is 250 yen per good, then the nominal exchange rate is ________ yen per dollar.

Answers

Answer: 2.5 Yen

Explanation;

The Economic theory of Purchasing Power Parity when held, believes that prices of goods in different countries are the same if their exchange rates are taken into account.

For the above therefore it means that the price of the good is the same in both the US and Japan barring exchange rates.

Exchange rate is;

$100 = ¥250

$1 = 250/100

$1 = ¥2.5

Exchange rate is 2.5 yen per dollar.

Last year, you purchased a stock at a price of $78.00 a share. Over the course of the year, you received $2.70 per share in dividends and inflation averaged 3.2 percent. Today, you sold your shares for $82.20 a share. What is your approximate real rate of return on this investment?

Answers

Answer:

5.65%

Explanation:

Last year a stock of $78.00 was bought

During the period of one year $2.70 was received in dividend and inflation averaged 3.2%

Today the shares was sold for $82.20

The first step is to calculate the nominal return

= ($82.20-$78.00+$2.70)/$78.00

= 6.9/78

= 0.0885×100

= 8.85%

Therefore, the approximate real rate can be calculated as follows

= 8.85%-3.2%

= 5.65%

Hence the approximate real rate of return on this investment is 5.65%

Read Eye on Fiscal Stimulus. How big was the fiscal stimulus package of​ 2008-2009, how many jobs was it expected to​ create, and how large was the multiplier implied by that​ expectation? Did the stimulus​ work?

Answers

Answer:

1. $787 billion

2. 650,000; 1.6

3. did not​ meet; the multiplier was much smaller than 1.6

Explanation:

The fiscal stimulus package of 2008-2009 was​ $787 billion. This is because, the United States government wanted to increase spending in order to have sufficient economic growth. Thus, the fiscal stimulus was expected to create​ 650,000 JOBS, in which the multiplier implied by that expectation is​ 1.6.

However, the stimulus​ did fiscal stimulus did not work, as it DID NOT MEET the expectations of the Obama administration, simply because​ "the multiplier was much smaller than 1.6"

n January 1, 1987, three 100 par value bonds with 6% annual coupons will mature at the end of 1, 2, and 3 years, respectively. The redemption value of each bond is 100. You are given that the prices for these bonds on January 1, 1987 are: Maturity Date Price December 31, 1987 101.92 December 31, 1988 102.84 December 31, 1989 105.51 These prices are based on an interest rate of i in 1987, j in 1988, and k in 1989. Determine j.

Answers

Answer:

j = 4.52%

Explanation:

face value = $100, with 6% annual coupons

bond₁ matures in 1 year (December 31, 1987), market price $101.92

bond₂ matures in 2 years (December 31, 1988), market price $102.84

bond₃ matures in 3 years (December 31, 1989), market price $105.51

we must determine the market interest rate (j) for bond₂, and to do this we will use the approximate yield to maturity formula:

YTM = {coupon + [(face value - market price)/n]} / [(face value + market price)/2]

YTM = {6 + [(100 - 102.84)/2]} / [(100 + 102.84)/2] = 4.58 / 101.42 = 0.045158 = 4.52%

Since the bonds are sold at a premium, it means that the coupon rate is higher than the market rate.

A restaurant owner just found out that his pizza bistro is losing money. What is one possible explanation for this loss

Answers

Answer:

Explanation:

There could be multiple reasons as to why the pizza bistro is losing money.

Waste not being counted accurately.

Food being replaced for wrong orders and not being accounted for.

Theft.

Orders not being entered correctly.

To be effective, your goals must be balanced in the following areas:a. Career, Fun, Health, Relationship, Spiritualityb. Environmental, Spirituality, Organicc. Career, Financial, Health and Fitness, Relationships, Spirituality

Answers

Answer:

Career , Financial , Health and Fitness, Relationships, Spirituality

Explanation:

Goals are what one plan to achieve within a specified period of time. Goal could be short term , usually one year or long term goal, which is more than a year. People that want to succeed must set goals because setting goal gives direction. When people set goals, it gives them the opportunity to work harder towards achieving that goal and also provides benchmark for determining if one is actually succeeding or on the right path.

People set goals on daily basis. The question is; how effective are those goals. It therefore means that for a goal to be effective, it must touch or cover the following areas ; career, financial, health and fitness, relationships, spirituality.

A sole proprietor owned an office building with a cost of $300,000 and accumulated depreciation of $40,000, using modified accelerated cost recovery system (MACRS) straight-line depreciation. In the current year, she sold the building for $320,000. What is the unrecaptured Section 1250 gain from this sale, if any

Answers

Answer:

The Correct Answer:

$40,000

Explanation:

IRC Section 1250 requires that excess depreciation (actual depreciation in excess of straight-line depreciation) be recaptured as ordinary income. Since the property has sold for more than the adjusted basis ($300,000 − $40,000 = $260,000 adjusted basis), the initial gains are recaptured based on the original purchase price of $300,000.

This makes the first $40,000 of the profit subject to the unrecaptured Section 1250 gain while the remaining $20,000 is considered regular long-term capital gains.

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 145 units per hour. In the month of July, the company operated the production line for a total of 265 hours and produced 30,400 units of output.What was its capacity utilization rate for the month?

Answers

Answer:

79.1%

Explanation:

Hoosier manufacturing operates a production shop that is modelled to have the lowest unit of production

The output rate is 145 units per hour

In the month of July the company operated the production line for 265 hours

30,400 units of output were produced

Therefore, the capacity utilization rate can be calculated as follows

= 30,400 units/265 hours ×145

= 30,400/38,425

= 0.791×100

= 79.1%

Hence the capacity utilization rate for the month is 79.1%

In the consensus case, what is Amazon's enterprise value on the valuation date using the exit multiple terminal value

Answers

Answer:

The exit multiple expect that the market different premise is a reasonable strategy for esteeming a business. The estimation of the business is gotten by duplicating money related measurements, for example, EBITDA or EBIT by a factor that is basic to practically identical organizations that were as of late procured. A fitting scope of products can be created by taking a gander at late equivalent acquisitions in the open market.  

The various acquired is then increased by the anticipated EBIT or EBITDA in year N (last year of projection period) to give the future incentive toward the finish of year N. The future value (otherwise called terminal value) is then limited by a factor equivalent to the quantity of years in the projection time frame.  

The worth got is then added to the current estimation of the free incomes to acquire the suggested venture esteem. For repetitive organizations where profit vacillate as per varieties in the economy, we utilize the normal EBITDA or EBIT over the span of the particular recurrent as opposed to the sum in year N in the projection time frame.  

This implies an industry different is applied as opposed to applying a current numerous to consider the recurrent varieties of profit. On the off chance that investigators utilized a current numerous, the valuation would be influenced by financial cycles.

A Enterprise Value (EV) to Revenue Multiple is used to value a business by dividing its enterprise value by its annual revenue. The formula to calculate the Enterprise Value (EV) to Revenue Multiple is EV/Revenue

EV = Enterprise Value

EV can be denoted as (Equity Value + All Debt + Preferred Shares) – (Cash and Equivalents)

While Revenue = Total Annual Revenue

This can be calculated when we have a share price, shares outstanding, debt, and cash or its equivalence.

When a job analyst watches employees directly or reviews films of workers on the job, which analysis method is being used?

Answers

Answer:

Observation method

Explanation:

Through observation, this analyst collects data by watching the employees directly. This is participatory because the analyst has to involve himself in the work environment where this employees are in other to collect data. This method would allow the analyst to have more reliable insights. He would get data based on what the employees do rather than what the Employees tell him that they do.

ABC is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Container Corporation purchased computer equipment, installation and training for a total cost of $144,000 on March 15, 2021. Estimated standalone fair values of the equipment, installation and training are $90,000, $60,000 and $30,000 respectively. The journal entry to record the transaction on March 15, 2021 will include a

Answers

Answer:

ABC

Journal Entries:

Debit Cash or Accounts Receivable (Container Corporation) $144,000

Credit Sales Revenue $72,000

Credit Installation Revenue $48,000

Credit Training Revenue $24,000

To record the sale of goods and services worth $144,000.

Explanation:

a) Data and Calculations:

Performance Obligations and Contract Price:

Computer equipment = $90,000/$180,000 x $144,000 = $72,000

Installation = $60,000 x 0.80 = $48,000

Training = $30,000 x 0.80 = $24,000

Total purchase costs = $144,000

b) The performance obligations and the consideration prices are allocated accordingly based on their separate consideration values.

Compare and contrast the following forms of business organization: sole proprietorship,general partnership,limited liability company,and corporation as to ease of formation,liability of owners,management,and tax implications.

Answers

Answer:

Find the explanation below.

Explanation:

1. Sole Proprietorship is owned by a single person or a married couple.

a. Ease of formation: This business is very easy to form because owners are not required to have legal documentation for the business to begin operation.

b. Liability of Owners: Owners are personally liable for the success or failure of the business. This means that they bear the cost of whatever debt or losses that are incurred in the business and can be sued for it.

c. Management: The owner makes all the management decisions that could affect the business. He sets the time when his business can be run as well as the prices for his products.

d. Tax Implications: They fill out Schedule C where they calculate the profit and loss from their business. They declare their income in Standard Form 1040 and they are subject to Self-employment tax.

2. General Partnership is a business agreement between to or more owners.

a. Ease of Formation: It is quite easy to start this business because little or no legal documentation is required to kick-start the business.

b. Liability: All partners are liable for debts and losses incurred in the business.

c. Management Decisions: The management decisions are made by the general partners. This affords them a measure of flexibility.

d. Tax implications: Income tax is not paid rather, a separate tax return form is filed.

3. Limited Liability Company: These business entities are run by two or more business partners.

a. Ease of Formation: It is relatively easy to form because it is governed by state rules and regulations which must be adhered to by the business owners.

b. Liability: There is a limited liability as just the business assets can be withheld when there is a legal battle. Personal assets of partners can not be withheld.

c. Management Decisions: There could be a member-managed LLC where members make decisions in the business or a manager-managed LLC one or two non-members are employed to manage the business and make business decisions therein.

d. Taxation: Taxation is done once and profits realized are passed through to the personal income taxes of the members.

4. Corporations are set up by a group of businesspeople.

a. Ease of Formation: They are not easy to form as proper documentation which is governed by state laws must be adhered to.

b. Liability: There is a limited liability as shareholders are not held accountable for the debts and losses of the corporation.

c. Management: There are directors of the corporation who are elected by the shareholders, They make decisions for the corporation. Business officers are also appointed.

d. Tax Implications: There are lots of taxation requirements for which the corporation might seek advice from a taxation advisor to prevent double taxation.

For each of the following cases determine the ending balance in the inventory account. a. Jill’s Dress Shop had a beginning balance in its inventory account of $44,500. During the accounting period, Jill’s purchased $88,500 of inventory, returned $5,900 of inventory, and obtained $840 of purchases discounts. Jill’s incurred $1,180 of transportation-in cost and $690 of transportation-out cost. Salaries of sales personnel amounted to $35,500. Administrative expenses amounted to $40,100. Cost of goods sold amounted to $91,300.b. Ken’s Bait Shop had a beginning balance in its inventory account of $8,000. During the accounting period Ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. Sales discounts amounted to $640. Ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. Selling and administrative cost amounted to $12,300. Cost of goods sold amounted to $33,900.

Answers

Answer:

a) Jill's

beginning inventory = $44,500

purchases  = $88,500 - $5,900 - $840 = $81,760

transportation in expenses = $1,180

total inventory costs = $127,440

cost of goods sold = $91,300

ending inventory = $127,440 - $91,300 = $36,140

b) Ken's

beginning inventory = $8,000

purchases = $36,900 - $1,200 - $360 = $38,460

transportation in expenses = $900

total inventory costs = $47,360

cost of goods sold = $33,900

ending inventory = $47,360 - $33,900 = $13,460

A customer opens a new margin account with the following position:

Long: 1,000 XYZ Cmn
Mkt Value: $20,000
Debit: $10,000

If the market value rises to $22,000, how much SMA is created?

Answers

Answer:

$1,000

Explanation:

The above means that for every $1 increase in the market value in a long margin account, the SMA increases by $0.50

If the market value rises to $22,000, the account will show

Long market value - Debit = Equity % SMA

$22,000 - $10,000 = $12,000

Against $22,00 of market value, 50% can be borrowed or $11,000. Since the debit is $10,000, an additional $1,000 can be borrowed . This is the SMA

When recording journal entries for production costs using a standard cost accounting system, the debit to Work in Process Inventory account is for the ______ amount.

Answers

Answer: Actual amount

Explanation:

Standard Costing deviates from traditional accounting in that it is not based on historical costs of a good. In standard cost accounting, the actual costs are put in place of standard costs and then the variance between the two will be recorded and used for analysis.

The debit to the Work in Process Inventory account under a standard cost accounting system will be the actual amount.

Ballpark has shares of par common stock outstanding. Ballpark announces a stock split of for1. What is the effect of the​ split?

Answers

Answer:

The answer is 'it increases the number of shares outstanding'

Explanation:

Stock split increases the number of shares outstanding. It causes dilution of earnings per share.

For example, ABC Inc. has 50,000 shares outstanding and it announces a stock split of 3-for- 1.

This means that any shareholder that has 1 will exchange that 1 share for 3 shares. So at the end of the stock split the total number of shares outstanding will be 150,000 shares (50,000 x 3)

Jordan is the marketing head of Hastings Comprehensive Systems. He usually strives for long-term improvement rather than short-term profit, regardless of the economic environment. In the context of Deming's 14 points of quality, this is an example of

Answers

Answer:

Create constancy of purpose

Explanation:

Deming 14 points of quality are recommended management strategy to transform business effectiveness.

Deming postulated that by increasing quality one is able to reduce cost and increase efficiency of a business.

The first of his 14 points is to create a constancy of purpose. This is achieved by striving for long-term improvement rather than short-term profit, as is done by Jordan in the given scenario.

The 14 points of Deming are given below:

Create a constancy of purpose

Adopt the new philosophy

Stop depending on inspections

Using a single supplier for one item

Improve constantly and forever

Use training on the job

Implement leadership

Eliminate fear

Breakdown barriers between departments

Get rid of unclear slogans

Eliminate management by objectives

Remove barriers to pride of workmanship

Implement education and self improvement

Make transformation everyone's job

Requirement 3. If Radig Travel expects each helicopter to​ make, on​ average, 1,200 ​round-trips in the coming​ year, what should its estimated operating budget for the helicopter fleet​ be? Radig Travel's estimated operating budget for all 8 helicopters in the fleet combined should b

Answers

Answer:

the first part of the question is missing:

"Radig Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 8 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000

Round-trips in the year incurs an average operating cost of $300 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $250 per round-trip.

Using the high-low method, estimate the annual operating costs:"

variable costs per trip (per helicopter) =  ($500,000 - $300,000) / (2,000 - 1,000) = $200,000 / 1,000 = $200 per trip

fixed costs = $500,000 - (2,000 x $200) = $500,000 - $400,000 = $100,000

the estimated operating budget per helicopter = $100,000 + (1,200 x $200) = $100,000 + $240,000 = $340,000

operating budget for the whole fleet (8 helicopters) = 8 x $340,000 = $2,720,000

The current price of a certain non-dividend-paying stock is $120.00. The future 2 pri ce is characterized by the following probability distribution:
EVENT PROBABILITY FUTURE PRICE P RETURN R
A 0.18 $180 ?
B 0.09 $108 ?
C 0.3 $90 ?
D 0.25 $81 ?
E ? $225
Calculate [i] the expected future price, [ii] the return in each of the five events, and [iii] Calculate l the expected return. Recall that for a stock which does not pay dividends, return is just ain divided by the initial price. Expected return can be calculated in two ways:
[a]: You could calculate the return to be realized in each of the five events, and then calculate the expected value of the return, or,
[b]: You could calculate the expected price first, and then use the possible fact that:
E(R) = E(P)/Po - 1

Answers

Answer:

Non-Dividend-Paying Stock

i) Calculation of the expected future price:

EVENT   PROBABILITY   FUTURE PRICE P   RETURN R

A                 0.18                      $180                   $32.40

B                 0.09                     $108                     $9.72

C                 0.3                        $90                   $27.00

D                0.25                       $81                   $20.25

E                 0.18                    $225                   $40.50

Total           1.0                 $129.87                 $129.87

Future price = the expected returns = $129.87

ii) Calculation of the return in each of the five events:

EVENT   PROBABILITY   FUTURE PRICE P   RETURN R

A                 0.18                      $180                   $32.40

B                 0.09                     $108                     $9.72

C                 0.3                        $90                   $27.00

D                0.25                       $81                   $20.25

E                 0.18                    $225                   $40.50

iii) Calculation of the expected return:

EVENT   PROBABILITY   FUTURE PRICE P   RETURN R

A                 0.18                      $180                   $32.40

B                 0.09                     $108                     $9.72

C                 0.3                        $90                   $27.00

D                0.25                       $81                   $20.25

E                 0.18                    $225                   $40.50

Total           1.0                                                 $129.87

Explanation:

a) Data & Calculations:

EVENT   PROBABILITY   FUTURE PRICE P   RETURN R

A                 0.18                      $180                      ?

B                0.09                      $108                      ?

C                 0.3                        $90                      ?

D                0.25                       $81                      ?

E                  ?                        $225

If stock A does not pay dividend, it will attract capital appreciation which compensates for the unpaid dividends since the company has increased assets over liabilities.  When the assets grow more than the liabilities from the reinvestment of the profits, the net value of the business which is the equity increases.  This capital growth belongs to the stockholders and  is distributable to them in the form of the future price of the stock, which appreciates with the capital growth.

Other Questions
Which rights listed in John Lockes Two Treatises of Civil Government did Thomas Jefferson include when writing the Declaration of Independence? Select all that apply. a. happiness b. property c. liberty d. life -36 4/9 - (-10 2/9) -(18 2/9) The molecules in Tyler are composed of carbon and other atoms that share one or more electrons between two atoms, forming what is known as a(n) _____ bond. Tyler needs to get the windows in his new home cleaned. The cleaning company needs to know the total number of window panes before it can tell him how much the job will cost. There are 12 windows, each with four window panes across and four window panes down. Tyler can find the total number of window panes by multiplying the number of windows by the number of panes in each window. The total number of window panes is an expression with a whole-number exponent. Write an expression with exponents to find the total number of panes in 12 windows. A brick is resting on a smooth wooden board that is at a 30 angle. What is one way to overcome the static friction that is holding the brick in place? A compound (C_9H_9BrO_2) gives the following NMR data. Draw the structure of the compound.'1^H-NMR: 1.39 ppm, t(3H); 4.38 ppm, q(2H); 7.57 ppm, d(2H); 7.90 ppm, d(2H)13^C-NMR: 165.73; 131.56; 131.01; 129.84; 127.81; 61.18; 14.18You do not have to consider stereo chemistry.You do not have to explicitly draw H atoms.Do not include lone pairs in your answer. A hypothesis test is the following: a. a descriptive technique that allows researchers to describe a populationb. an inferential technique that uses information about a population to make predictions about a samplec. a descriptive technique that allows researchers to describe a sampled. an inferential technique that uses the data from a sample to draw inferences about a population How does the spontaneity of the process below depend on temperature? PCl5(g)+H2O(g)POCl3(g)+2HCl(g) H=126 kJ mol1, S=146 J K1mol In the Mosher and associates Study from 2005, the vast majority of the participants Question 16 options: A experienced Gender Dysphoria B experienced prejudice because of sexual orientationC reported feelings of disapproval of others who were gay D reported only heterosexual behavior Select the correct answer.What method best describes the rhetoric John F. Kennedy uses in this speech to convince people that Germany is undergoing a revolutionarymoment? Match the description to the term.1. requires a receiver of actionindefinite pronoun2. introduces adjective clausespronominal adjective3. who, whose, whom, which, whatadjective phrase4. indicates an unspecified person or thingtransitive verb5. a word which is both a pronoun and an adjectiveinterrogative pronouns6. used for subjects and subject complementsinterjection7. prepositional phrase acting as adjectiverelative pronoun8. prepositional phrase acting as adverbconjunctionnominative case9. word punctuated like a sentence, showing strong feelinga word which links words, phrases, or clauses of the same10.typeadverb phraseNEXT QUESTIONASY TO UTID How did Native Americans' language differ from Europeans? Which one of the following frequencies of a wave in the air can be heard as an audible sound by human ear 4.What is the tone at the beginning of the poem and how does it change in the poem of ballad of Birmingham ? In your own words what does pre-written mean? Who is the narrator of this story in two kinds There are 9 classes of 25 students each, 4 teachers, and two times as many chaperones as teachers.Each bus holds a total of 45 people.What is the least number of buses needed for the field trip? Which is incorrect descriptions of the genetic event initiated by the HIV reverse transcriptase (RT) upon the HIV infection? a. RT catalyzes initial synthesis of ssDNA using viral genomic RNA as the template. b. The first RNA template is degraded after ssDNA synthesis. c. The whole process is completed after synthesis of dsDNA. d. tRNAs are adopted as the first primers. e. None of these Firms that tend to focus on conducting e-business with other businesses are referred to as having a B2B model.A. TrueB. False You have learned at work that todays successful companies at all levels have one thing in common: they are heavily committed to marketing and strongly ________.