our company sells its product for $80 per unit and has a variable cost of $40 per unit. total fixed costs equal $18,000. the breakeven in units is 450, and we expect to sell 550 units. what is the margin of safety in dollars? group of answer choices ($8,000) $4,000 ($4,000) $8,000

Answers

Answer 1

The margin of safety in dollars is calculated to be $8,000. Therefore, the answer choices $8,000 is the correct.

To calculate the margin of safety, we need to first calculate the total sales revenue and the breakeven sales revenue.

Breakeven sales revenue = Breakeven units x Selling price per unit

Breakeven sales revenue = 450 x $80 = $36,000

Total sales revenue = Expected sales units x Selling price per unit

Total sales revenue = 550 x $80 = $44,000

Margin of safety = Total sales revenue - Breakeven sales revenue

Margin of safety = $44,000 - $36,000 = $8,000

Therefore, it can be concluded that the margin of safety in dollars is $8,000.

Learn more about margin of safety :

https://brainly.com/question/30630586

#SPJ4


Related Questions

pick n shop inc. operates a chain of supermarkets. the company offers a bonus of $500 to its sales representatives if they can sell products worth $5,000 per month. it also offers bonuses and other benefits to its employees and managers. by offering such bonuses, pick n shop inc. is primarily trying to avoid a(n) .

Answers

By offering bonuses to its employees and managers, Pick n Shop Inc. is primarily trying to avoid a decrease in employee motivation and productivity.

By offering bonuses and benefits to its employees and managers, Pick n Shop Inc. is primarily trying to avoid a high employee turnover rate. When companies offer competitive compensation packages, including bonuses and benefits, it helps to attract and retain talented employees. This can lead to increased job satisfaction, higher employee morale, and improved productivity, all of which can ultimately benefit the company's bottom line.

By avoiding high employee turnover, the company can also avoid the costs associated with recruiting, hiring, and training new employees. Therefore, offering bonuses and benefits can be an effective strategy for retaining employees and maintaining a stable workforce.

Learn more about bonuses at:

brainly.com/question/27622487

#SPJ4

1) Consider the oil market characterized by:
P= $/gallon
Q=million gallons
10P= 8+2Q
P= 100-10Q
τ (tao) = $1/unit (gallons)
a)What is the tax burden on customers and producers?
b)What is the DWL due to this policy?

Answers

The tax burden on customers is $5/gallon, and the tax burden on producers is $4/gallon. The DWL due to this policy is 0.5 million gallons.

1. Solve the given equations to find equilibrium price and quantity without the tax:
10P = 8 + 2Q
P = 100 - 10Q
Substituting P in the first equation:
10(100 - 10Q) = 8 + 2Q
Solving for Q and P, we get Q = 9 million gallons and P = $10/gallon.

2. Calculate the price and quantity after applying the tax:
The new supply equation will be 10P = 8 + 2Q + 2τ (since the tax is per gallon)
10P = 8 + 2Q + 2
Substituting P = 100 - 10Q:
10(100 - 10Q) = 8 + 2Q + 2
Solving for Q and P, we get Q = 8.5 million gallons and P = $15/gallon.

3. Calculate tax burden on customers and producers:
Customers pay an additional $5/gallon (from $10 to $15), and producers receive $4 less/gallon (from $10 to $6, since $15 - $1 tax = $6).

4. Calculate the DWL due to this policy:
DWL = 0.5 * (9 - 8.5) * ($15 - $6 - $10)
DWL = 0.5 * 0.5 * ($1)
DWL = 0.5 million gallons.

To know more about equilibrium price click on below link:

https://brainly.com/question/28527601#

#SPJ11

The Supreme Court mandated that studios that owned theaters had to sell them to prevent monopoly. This is done because?

Answers

The Supreme Court mandated that studios that owned theaters had to sell them to prevent monopoly because it was believed that if studios owned theaters, they would have a stranglehold on the movie industry.

They will be controlling the production, distribution, and exhibition of films, which could lead to unfair practices, such as limiting access to independent filmmakers and limiting competition.

By forcing studios to sell their theaters, it allowed for more competition in the industry and prevented a single entity from having too much power and control.
The Supreme Court mandated that studios that owned theaters had to sell them to prevent monopoly. This was done because monopolies can lead to a lack of competition, resulting in higher prices and reduced choices for consumers. By requiring studios to sell their theaters, the court aimed to promote fair competition and protect consumer interests in the film industry.

Learn more about monopoly here: https://brainly.com/question/13113415

#SPJ11

The Supreme Court mandated that studios that owned theaters had to sell them to prevent a monopoly in the film industry. This was done to promote fair competition and prevent one company from having too much control over the production, distribution, and exhibition of films. By breaking up the studio-theater ownership, other independent theaters and film producers were able to have a chance to succeed and offer more diverse options to audiences.

Firstly, it aimed to promote fair competition and prevent anti-competitive practices that could stifle competition in the film industry. By divesting theaters from studios, it aimed to create a level playing field for independent theaters and prevent studios from engaging in anti-competitive behavior, such as favoring their own films over others. Additionally, the Court sought to protect consumer choice by ensuring that a variety of films from different studios could be exhibited in theaters, fostering diversity and innovation in the film industry. Overall, the goal was to prevent monopolistic practices and promote healthy competition in the film market.

learn more about Monopoly here:

https://brainly.com/question/4575038

#SPJ11

a check received from the offeror may be held uncashed by the broker until acceptance of the offer, provided the:

Answers

When a broker receives a check from an offeror, they may hold it uncashed until acceptance of the offer is received. The offeror is the person making the offer, while the broker is the middleman who facilitates the transaction. The acceptance refers to the recipient of the offer agreeing to the terms of the offer.

This process is often used in real estate transactions, where the buyer makes an offer to purchase the property, and the broker holds the deposit check until the seller accepts the offer. This allows for a more secure transaction and ensures that the funds are available when needed.

However, it is important to note that the specific terms of holding the check may vary depending on the agreement between the offeror, broker, and acceptance. In any case, it is important to have a clear and concise agreement between all parties involved to avoid any confusion or legal issues.

To know more about broker, visit https://brainly.com/question/17011472

#SPJ11

Consider a Zerobond (i.e., a bond that pays no coupon payment, meaning that the coupon rate on the bond is 0%) with a par value of $5,000 that will mature exactly 16 years from today. The current YTM a of this Zerobond is 7.35%. Two years ago, the YTM of the same Zerobond was 8.61%. Calculate the dollar price increase/decrease (2 decimal places) within the last two years. If the bond falls in price, enter your answer on D2L as a negative value (i.e., put a minus sign before your number with no space between the minus sign and the number). If the bond increases in price, record the dollar amount of the increase.

Answers

The Zerobond in question has a par value of $5,000 and will mature in 16 years, with a current yield to maturity of 7.35%. Two years ago, the YTM was 8.61%. To calculate the dollar price increase/decrease over the last two years, we need to use the bond price formula. The formula is:

Bond Price = Par Value / (1 + YTM)^n

where n is the number of years until maturity.

Using this formula, we can calculate the bond price two years ago and compare it to the current bond price:

Bond Price two years ago = $5,000 / (1 + 0.0861)^16 = $1,677.54


Current Bond Price = $5,000 / (1 + 0.0735)^16 = $3,469.89

To find the dollar price increase/decrease, we subtract the bond price two years ago from the current bond price:

$3,469.89 - $1,677.54 = $1,792.35

Since," the bond price increased over the last two years, we record the dollar amount of the increase, which is $1,792.35."

To know more about bond price refer here

https://brainly.com/question/15518377#

#SPJ11

the mental link customers make between a brand and its key product attributes is known as brand blank______. multiple choice question. equity loyalty asset association

Answers

The mental link customers make between a brand and its key product attributes is known as brand association. The correct option is D.

Brand association plays a crucial role in shaping consumers' perceptions, preferences, and purchasing behavior. It refers to the various attributes, benefits, and experiences that people associate with a particular brand.

These associations can be based on product features, quality, price, customer service, or any other factors that differentiate the brand from its competitors. A strong brand association can enhance brand equity, which is the overall value of the brand in the market.

This, in turn, can lead to increased customer loyalty, as customers are more likely to stay with a brand they have positive associations with. Developing and maintaining positive brand associations is an important aspect of brand management and marketing strategy.

To know more about brand, refer here:

https://brainly.com/question/31315956#

#SPJ11

COMPLETE QUESTION:

the mental link customers make between a brand and its key product attributes is known as brand ______.

a. equity

b. loyalty

c. asset

d. association

On January 1 2021 a company borrows 1 000 000 USD, agreeing to repay this sum in 20 equal end-of-year installments at 3% interest on the declining balance.
a.1 How large must the annual payments be?
a.2 Prepare the amortization table of the loan, showing every year’s installment, portion dedicated to expenses and the portion dedicated to redemption of the debt.
b. Perform the similar calculations under 10 equal end-of-year installments at 6% and compare the outcome to questions a.

Answers

a.1 The annual payments must be approximately $70,282.

To calculate the annual payments, we can use the formula for an annuity payment:

Payment = PV x (r(1+r)^n / ((1+r)^n - 1))

where PV is the present value of the loan, r is the interest rate per period, and n is the number of periods. In this case, PV is $1,000,000, r is 3%, and n is 20.

Using this formula, we get an annual payment of approximately $70,282.

a.2 Here is the amortization table for the loan:

Year Beginning Balance Payment Interest Principal Ending Balance

1 $1,000,000.00 $70,282 $30,000 $40,282 $959,717.72

2 $959,717.72 $70,282 $28,791 $41,491 $918,226.29

3 $918,226.29 $70,282 $27,495 $42,787 $875,439.16

... ... ... ... ... ...

20 $0.00 $70,282 $0.00 $70,282 $0.00

Each year, the payment stays the same but the amount of interest paid decreases while the amount of principal paid increases as the outstanding balance decreases.

b. If the company were to make 10 equal end-of-year installments at 6% interest, the annual payments would be approximately $135,579. This is a higher annual payment than in scenario a because the interest rate is higher and the loan is being repaid over a shorter period of time.

The total interest paid over the life of the loan would also be higher in scenario b compared to scenario a.

For more questions like Insurance click the link below:

https://brainly.com/question/27822778

#SPJ11

Suppose the risk-free rate is 3.53% and an analyst assumes a market risk premium of 5.32%. Firm A just paid a dividend of $1.36 per share. The analyst estimates the β of Firm A to be 1.34 and estimates the dividend growth rate to be 4.58% forever. Firm A has 300.00 million shares outstanding. Firm B just paid a dividend of $1.55 per share. The analyst estimates the β of Firm B to be 0.89 and believes that dividends will grow at 2.76% forever. Firm B has 197.00 million shares outstanding. What is the value of Firm A?
Round to: 2 decimal places.

Answers

The value of Firm A is $7,217.46 million.

To calculate the value of Firm A, follow these steps:

1. Determine the required rate of return using the Capital Asset Pricing Model (CAPM): Required Rate of Return = Risk-free Rate + β * Market Risk Premium
  Required Rate of Return = 3.53% + 1.34 * 5.32%
  Required Rate of Return = 10.64%

2. Calculate the dividend growth rate for Firm A: 4.58%

3. Calculate the Gordon Growth Model (Dividend Discount Model) for Firm A:
  Stock Price = (Dividend * (1 + Dividend Growth Rate)) / (Required Rate of Return - Dividend Growth Rate)
  Stock Price = ($1.36 * (1 + 4.58%)) / (10.64% - 4.58%)
  Stock Price = $24.05

4. Multiply the stock price by the number of shares outstanding to find the value of Firm A:
  Firm A Value = Stock Price * Shares Outstanding
  Firm A Value = $24.05 * 300 million
  Firm A Value = $7,217.46 million

To know more about Capital Asset Pricing Model click on below link:

https://brainly.com/question/30076862#

#SPJ11

Question 3 of 7. The Procurement Integrity Act bans certain Government employees from accepting compensation from a contractor for 1 year after they served in a covered procurement-related position or made a procurement-related decision for their agency. The ban also applies to individuals who personally made decisions on behalf of the Government agency. What are three of these decision actions? I Award a contract, subcontract, modification of a contract or subcontract, or a task order or delivery order over $10 million O Establish overhead or other rates for a contractor on a contract or contracts valued over $10 million Approve a contract payment or payments under $5 million Pay or settle a claim over $10 million

Answers

The Procurement Integrity Act prohibits certain Government employees from receiving compensation from a contractor for one year after serving in a covered procurement-related position or making a procurement-related decision for their agency.

Three of these decision actions are: awarding a contract, subcontract, contract or subcontract modification, or task order or delivery order valued at more than $10 million, determining overhead or other rates for an employee on the contract or contracts valued at more than $10 million, and signing an agreement payment or payments less than $5 million. 

The ban also applies to individuals who personally made decisions on behalf of the Government agency.

To know more about Procurement Integrity Act ,refer to the link:

https://brainly.com/question/30772542#

#SPJ11

Bloomington Utility Company has modest ROE of 5%, while Bloomington Tech Co. has very high ROE of 10%. Both companies have a market capitalization rate (.e. required rate of return) of 7%. Based on this information, you would expect Bloomington Utility Company to have a dividend payout ratio than Bloomington Tech Co. O A. higher O B. lowed O C. the same OD. there is not enough information to know the relationship

Answers

Based on the information provided, you would expect Bloomington Utility Company to have a higher dividend payout ratio than Bloomington Tech Co.

Here's a step-by-step explanation:

1. Both companies have a market capitalization rate (i.e., required rate of return) of 7%.
2. Bloomington Utility Company has an ROE of 5%, while Bloomington Tech Co. has an ROE of 10%.
3. The dividend payout ratio is calculated as (1 - (required rate of return / ROE)).


4. For Bloomington Utility Company: (1 - (7% / 5%)) = (1 - 1.4) = -0.4. Since the payout ratio cannot be negative, it would be adjusted to 100%, meaning all earnings are paid out as dividends.
5. For Bloomington Tech Co: (1 - (7% / 10%)) = (1 - 0.7) = 0.3 or 30%.

Based on these calculations, Bloomington Utility Company has a higher dividend payout ratio than Bloomington Tech Co.

To know more about Bloomington Utility Company refer here:

https://brainly.com/question/11310567#

#SPJ11

rebecca is a marketing executive at an airline company. she has been asked to plan her company's online advertising budget on a monthly basis. she's chosen ads' performance planner to help accomplish this task. what are two advantages performance planner offers rebecca? (choose two.)

Answers

The advantages are c. Performance Planner forecasting is powered by billions of Goo gle searches conducted each week and d. Performance Planner leverages machine learning for forecasting.

A new forecasting tool called Performance Planner utilises machine learning to show the potential of Goo gle Ads campaigns. Each week, billions of queries are used to create Goo gle Search ad auctions. The forecasting engine is run by it. The Performance Planner determines the optimum campaign spending levels to promote incremental conversions.

Account history and machine learning are combined by Performance Planner to power forecasts. Since Rebecca has chosen Performance Planner in the aforementioned situation, it will be easier for her to perform searches as Performance Planner's predictions are based on the billions of Goo gle searches made each week. Additionally, Performance Planner uses machine learning to provide forecasts.

Complete Question:

Rebecca is a marketing executive at an airline company. She has been asked to plan her company’s online advertising budget on a monthly basis. She’s chosen Goo gle Ads’ Performance Planner to help accomplish this task. What are two advantages Performance Planner offers Rebecca?

a. Performance Planner will help her identify funds from other operational budgets to allocate to marketing.

b. Performance Planner integrates with other budgeting software, such as QuickBooks.

c. Performance Planner forecasting is powered by billions of Goo gle searches conducted each week.

d. Performance Planner leverages machine learning for forecasting.

Read more about Performance Planner on:

https://brainly.com/question/14521985

#SPJ4

The history of real estate development is punctuated with great success stories and great failures. It is a risky, volatile business. It is sometimes described as a business that has 100 questions. If you answer all 100 questions correctly, then you can make a great deal of return on an investment. If you answer 95 correctly, then you can make some money. A mere 90 correct brings you even, and any fewer correct ensures that you will lose money. In this case, the investors were all knowledgeable in their areas but threw caution to the wind and put up a great deal of money with no real understanding of the impact of their actions. When they first started, they had no real reason to believe that their project would succeed. They had picked a good location and found savvy investors who had the financial strength they needed. Yet they failed. Fortunately for them they found out about their project before they lost any more money. To be sure, the loss they suffered was large, but it could have been much larger. They could have been approved and started construction, only to find that the nearby retail center was failing because of a change in the direction of the highway that abuts the center. The team could have had money in the land and paid for the construction, only to find that they had no chance of recovering any of their investment. This case is fairly simple in that the sole reason for the failure of the project was the wetland issue. In reality, projects like this are subject to a plethora of issues that can make or break them. Competition, a change in the marketplace, or a change in the overall economy or in area buying habits can affect a project. The best way to proceed with investments of these types is to commit as little to a project as possible in the early stages, and then contribute more as the risk in the major issues declines or is satisfied. Otherwise, real estate development investment can be a deep hole for unwise investors to dump a great deal of funds.

Answers

In the given case, the real estate development project faced failure primarily due to the wetland issue.

Despite having a good location, savvy investors, and financial strength, the lack of understanding of the potential impact of their actions led to a significant loss. Real estate development is a risky, volatile business with numerous factors that can influence success, such as competition, market changes, and economic shifts.

To minimize risks, it is advisable to commit minimal resources in the early stages of a project and increase investments as major risks are mitigated or resolved. This approach helps prevent unwise investors from incurring substantial losses in real estate development.

For more such questions on real estate, click on:

https://brainly.com/question/29748788

#SPJ11

a pay-for-performance plan in which employees are paid according to their productivity is referred to as . multiple choice question. commission gainsharing profit sharing piece rate

Answers

Gain sharing, which is option number two, is the solution to this scenario.  a pay-for-performance plan in which employees are paid according to their productivity is referred to gain sharing.

What exactly is gain sharing?

Gainsharing seeks to boost corporate profitability by encouraging greater participation and employee success. Employees receive a financial share of the company's profit as a result of a performance enhancement they helped design. Gainsharing is a management strategy that a company uses to boost profits by inspiring people to enhance their performance through involvement and participation. Employees share in the cash benefit (improvement) when their performance increases. Gainsharing's mission is to increase performance and decrease waste (time, energy, and materials) by encouraging employees to work smarter as a team rather than harder.

To know about gainsharing visit:

https://brainly.com/question/29390201

#SPJ1

Question 1 (1 point) Just like others animals, human beings cannot choose against the laws of their own nature. O True False Question 2 (1 point) Solidarity is the Catholic term for what socialists mean by collectivization. O True O False

Answers

False. Solidarity is a term used within Catholic teaching to describe the spiritual and social bonds between members of the Church.

It is based on the understanding that, through the grace of God, all individuals are connected and have a responsibility to care for each other. Collectivization, on the other hand, is a term used by socialists to refer to the process of organizing and managing production, distribution, and consumption of goods and services by a central authority, such as a government.

It is a means to achieving greater economic equality and social justice. The two terms are distinct and not interchangeable.

Know more about Catholic teaching here

https://brainly.com/question/30343397#

#SPJ11

Chapter 7 Stock Evaluation 1- A firm has an expected dividend next year of $1.20 per share, a zero growth rate of dividends, and a required return of 10 percent. The value of a share of the firm's common stock is? 2- Tiger Company has an expected dividend next year of $5.60 per share, a growth rate of dividends of 10 percent, and a required return of 20 percent. The value of a share of Tiger Company's common stock is? 3- A stock just paid a dividend of Do=$1.50. The required rate of return is r= 10.1%, and the constant growth rate is g=4.0%.

Answers

1- Value of a share of the firm's common stock is $12. 2 - value of a share of Tiger Company's common stock is $56. 3-  the value of the stock is $25.65.

P = D / r Where P is the price of the share, D is the expected dividend next year and r is the required return. For a constant growth stock, the price of the share can be calculated using the Gordon growth model: P = D1 / (r - g)

Where P is the price of the share, D1 is the expected dividend next year, r is the required return and g is the growth rate of dividends. Using the given values, we have: P = $5.60 / (0.20 - 0.10) = $56

Therefore, the value of a share of Tiger Company's common stock is $56. 3- For a constant growth stock, the price of the share can be calculated using the Gordon growth model: P = D0 x (1 + g) / (r - g)

Where P is the price of the share, D0 is the most recent dividend, r is the required return and g is the growth rate of dividends. Using the given values, we have: P = $1.50 x (1 + 0.04) / (0.101 - 0.04) = $25.65

Therefore, the value of the stock is $25.65.

Know more about dividends here:

https://brainly.com/question/29510262

#SPJ11

an integral part of tqm (total quality management) is _____, which can be characterized as the commitment to making constant improvements in design, production, and delivery.

Answers

The integral section involving Total quality management is continuous improvement  which could be subjected to the commitment for making constant improvements in the production, design, and delivery of goods and services.

For the given condition and requirement improvement plays a valiant role to increase efficiency and helps in gradually reducing the cost. Hence, leading to a boost in customer satisfaction and services.

Total quality management refers to the reactive process which involves detecting and eliminating errors. It is designed to streamline the supply chain hence providing aid in ensuring customer service and satisfaction. Furthermore, this set of guidelines makes the employees more efficient in their work and expertise in customer satisfaction.

To learn more about Total quality management,

https://brainly.com/question/28347020

#SPJ4

continuous improvement, which might be applied to the commitment to make continual improvements in the manufacturing, design, and delivery of goods and services, is a crucial component of total quality management.

Continuous improvement is a fundamental aspect of Total Quality Management (TQM). It involves making incremental and ongoing improvements in all areas of a company's operations, including design, production, and delivery. The aim is to continuously identify areas for improvement, develop solutions, and implement changes to enhance the quality of products and services, increase efficiency, reduce costs, and improve customer satisfaction. Continuous improvement requires a company-wide commitment to quality, with all employees encouraged to identify opportunities for improvement and actively participate in the improvement process. By constantly striving to improve processes, TQM organizations can stay competitive, meet or exceed customer expectations, and achieve long-term success.

learn more about continuous improvement here:

https://brainly.com/question/30278032

#SPJ11

less expensive ssds typically implement less reliable _______________ memory technology in place of the more efficient _______________ technology to cut costs.

Answers

Less expensive SSDs typically implement less reliable Triple-Level Cell (TLC) memory technology in place of the more efficient Multi-Level Cell (MLC) technology to cut costs.

TLC memory stores three bits of data per memory cell, while MLC stores two bits per cell. This difference in data storage affects the reliability and performance of SSDs. Since TLC stores more bits per cell, it has a higher storage capacity but at the cost of lower endurance and performance. The additional bits per cell make it more challenging for the SSD controller to accurately read and write data, leading to a higher chance of errors and a reduced lifespan.

On the other hand, MLC technology provides better performance and reliability as it stores fewer bits per cell, reducing the complexity of data reading and writing. As a result, MLC-based SSDs have higher endurance, faster write speeds, and a longer lifespan compared to TLC-based SSDs. However, MLC technology is more expensive to manufacture, which is why it is not as commonly used in budget SSDs.

In summary, less expensive SSDs use TLC memory technology to lower production costs, but this comes with a trade-off in reliability and performance when compared to the more efficient MLC technology.

For more about Multi-Level Cell:

https://brainly.com/question/988729

#SPJ11

in the fab approach, attributes or facts relating to the product being sold or demonstrated are referred to as

Answers

The FAB (Features, Advantages, Benefits) approach, attributes or facts relating to the product being sold or demonstrated are referred to as "features." Features are the specific characteristics, properties, or functionalities of a product that describe what it can do or what it is made of.

They are tangible and measurable aspects of the product that can be objectively described. Features provide the foundation for the FAB approach, which involves highlighting the advantages and benefits of these features to potential customers. Advantages are the positive outcomes or improvements that a customer can derive from the features, while benefits are the personal or emotional values that customers can experience from those advantages. By effectively communicating the features, advantages, and benefits of a product, salespeople aim to create customer interest and motivation to make a purchase decision.

learn more about FAB (Features, Advantages, Benefits) here:

https://brainly.com/question/31131303

#SPJ11

Optival's stock is currently trading at $60 per share with a historical volatility of 20%. The risk-free rate is 4%. Consider a European call and put option on Optival's stock with an exercise price of $55 that expires in 2 years. Use excel or a similar program to determine the option price using the Black-Scholes formula. (a): What is the value the European call and put option on Optival's stock with a strike price of $60? (b): To the nearest cent, how much does the option value change for the following adjustments to the input values: A in Call Value A in Put Value 1 stock price by $1 to $61 1 strike price by $1 to $56 1 the rF by 1% to 5% 1 volatility by 1% to 21% 1 time to maturity by 1 yr (c): Why does the value of the call increase by less than $1 when the stock price increases by $1? (d): To the nearest percent and holding all else constant, how high would the risk-free rate need to be for a 1 year increase in time to maturity to have a negative impact on the value of a put? Why does the risk- free rate affect whether an increase in maturity has a positive or negative affect on the value of a put option?

Answers

(a) Using the Black-Scholes formula, the value of the European call option is $12.46 and the value of the European put option is $3.79 with a strike price of $55.

(b) For the call option, the value would increase by $0.38 if the stock price increased to $61, decrease by $0.27 if the strike price increased to $56, increase by $2.23 if the risk-free rate increased to 5%, increase by $1.23 if the volatility increased to 21%, and increase by $3.38 if the time to maturity increased by 1 year.

For the put option, the value would decrease by $0.16 if the stock price increased to $61, increase by $0.47 if the strike price increased to $56, increase by $0.91 if the risk-free rate increased to 5%, increase by $0.43 if the volatility increased to 21%, and increase by $1.62 if the time to maturity increased by 1 year.

(c) The value of the call option increases by less than $1 when the stock price increases by $1 because of the effect of delta, which measures the sensitivity of the option price to changes in the stock price. Delta is less than 1 for a call option, so the option price increases by less than the increase in the stock price.

(d) The risk-free rate would need to be greater than the volatility for a 1 year increase in time to maturity to have a negative impact on the value of a put option. This is because a higher risk-free rate increases the present value of the strike price, which reduces the value of the put option.

As time to maturity increases, the value of a put option generally increases, but if the risk-free rate is high enough, the increase in the present value of the strike price can offset the increase in the time value of the option.

For more questions like Stock click the link below:

https://brainly.com/question/31476517?

#SPJ11

highly automated batch processes that can reduce the cost of making similar groups of products are called . group of answer choices flexible manufacturing systems. functional layouts. make-to-stock. adjacent processes.

Answers

Highly automated batch processes that can reduce the cost of making similar groups of products are called flexible manufacturing systems.

A flexible manufacturing system (FMS) is a manufacturing technique that can quickly adjust to changes in the nature and volume of the product being produced. It is possible to set up machines and computerized systems to produce a range of parts and adapt production levels.

Efficiency and production cost reduction are key factors in the business development process, and a flexible manufacturing system (FMS) can help with both. A make-to-order strategy that allows customized items and maintains minimal inventories can also include flexible manufacturing as a crucial element.

Learn more about flexible manufacturing systems:

brainly.com/question/31450345

#SPJ4

criteria for reevaluating internal business processes using the balanced scorecard include all of the following except: group of answer choices asset utilization improvements. improvements in employee morale. increases in employee skills. changes in turnover rates.

Answers

The criteria for re-evaluating internal business processes using the balanced scorecard include improvements in employee morale, increases in employee skills, changes in turnover rates, but do not include asset utilization improvements.

The balanced scorecard is a strategic management tool that helps organizations track their performance against objectives in several areas, including financial, customer, internal business processes, and learning and growth.

Therefore, reevaluating internal business processes using the balanced scorecard involves measuring the effectiveness of the organization's internal operations, including employee performance and turnover rates, which are essential factors for achieving long-term success.

While asset utilization is an important aspect of financial performance, it is not directly related to internal business processes, and therefore is not a criterion for reevaluating them using the balanced scorecard.

To know more about turnover rates refer here

https://brainly.com/question/28018869#

#SPJ11

- Can technical and fundamental analysis be used together? Explain why or why not in a few sentences.

Answers

Yes, technical and fundamental analysis can be used together. By using both analyses, investors can make well-informed decisions based on both company performance and market trends.

Can technical and fundamental analysis be used together?

Yes, technical and fundamental analysis can be used together. Combining both methods allows for a comprehensive understanding of the market, as fundamental analysis evaluates the financial health and value of a company, while technical analysis focuses on price movements and trends to predict future price patterns. By using both analyses, investors can make well-informed decisions based on both company performance and market trends.  

Fundamental analysis looks at a company's financial and economic factors, while technical analysis examines charts and patterns to identify market trends. However, it's important to use both approaches cautiously and consider other factors such as market sentiment and external events.

To know more about technical and fundamental analysis.

visit:

https://brainly.com/question/31412886

#SPJ11

What is the difference between a flexible spending account (FSA) and a health savings account (HSA)? FSA contribution is made from pretax dollars; an HSA contribution is made from after-tax dollars. H

Answers

An FSA is less flexible and held by the employer, withdrawals are prohibited, and contributions cannot be carried over to the following year. These are the main distinctions between HSAs and FSAs.

What distinguishes a health savings account from a flexible spending account?

Flexible spending accounts (FSAs) and health savings accounts (HSAs) differ most significantly in that an HSA is controlled by a person and permits contributions to roll over, whereas FSAs are employer-owned and have less flexibility options.

How do an MSA and an HSA differ from one another?

Medical Savings Accounts are only accessible to Medicare beneficiaries with high deductibles, whereas Health Savings Accounts are only accessible to those with high deductibles on private insurance plans.

To know more about  HSAs visit:-

https://brainly.com/question/26270016

#SPJ1

stock price cycles or patterns tend to self-destruct as soon as investors recognize them through: multiple choice stock market regulation by the securities and exchange commission (sec). price fixing by the specialists on the new york stock exchange. trading by investors. the actions of corporate treasurers.

Answers

The SEC plays a crucial role in maintaining market integrity and preventing fraudulent activities that could potentially harm investors.

As soon as investors recognize patterns or cycles that could be manipulated or exploited, the SEC steps in to regulate and prevent self-destructive behavior. This helps ensure that the market remains fair and transparent for all participants. While trading by investors and the actions of corporate treasurers may also impact stock price cycles, market regulation by the SEC is the most effective way to prevent self-destructive behavior in the market. Price fixing by specialists on the New York Stock Exchange is illegal and would also be regulated by the SEC.

Read more about investors here:https://brainly.com/question/29547577

#SPJ11

Is now a good time to attempt market timing?
As we approach the elections (though this year's aren't Presidential), what is an example of a political risk that may impact the investment world in today’s marketplace? (Please try to keep this one Civil!) By the way, political doesn't have to JUST be our country ... as there are many international pieces moving on the chessboard!
If you had the opportunity, are there any real-world companies you could/would suggest using options on in the short term?

Answers

Attempting market timing is a complex strategy that requires a deep understanding of the market and various economic indicators. It is generally not recommended for novice investors or those without a significant amount of experience and knowledge.

In terms of political risks that could impact the investment world, there are numerous examples both domestically and internationally. These risks could include changes in government policies, geopolitical tensions, regulatory shifts, and more. It's important to stay informed and aware of these risks when making investment decisions.

It's important to conduct thorough research and analysis before making any investment decisions, and to consult with a financial advisor if necessary.

For more such questions on market timing, click on:

https://brainly.com/question/15125169

#SPJ11

A(n) _____ interview is a special type of clinical interview designed not only to assess a problem demanding urgent attention, but also to provide immediate intervention for the problem.
A) protracted
B) informal
C) crisis
D) abbreviated

Answers

The (C) crisis interview is a special type of clinical interview designed not only to assess a problem demanding urgent attention, but also to provide immediate intervention for the problem.

The purpose of a crisis interview is to provide immediate assistance and support to the person in crisis, while also gathering information about the nature and severity of the problem. Crisis interviews are often conducted in emergency or high-stress situations, such as when a person is experiencing a mental health crisis, a medical emergency, or a traumatic event. The interviewer uses a range of techniques to assess the person's immediate needs, identify potential risks or threats, and provide appropriate interventions or referrals to other services or resources. Overall, the goal of a crisis interview is to help the person stabilize and cope with the immediate crisis, while also developing a plan for follow-up care and support. The interview may involve a variety of techniques, such as active listening, empathy, validation, problem-solving, and crisis intervention strategies, depending on the nature and severity of the problem.

Learn more about traumatic here:

https://brainly.com/question/943079

#SPJ11

A crisis interview is a special type of clinical interview designed not only to assess a problem demanding urgent attention, but also to provide immediate intervention for the problem. The correct answer is C) crisis.

The goal of a crisis interview is to offer immediate support and aid to the individual who is in need while also learning more about the nature and seriousness of the issue. In emergency or high-stress situations, such as when a person is going through a mental health crisis, a medical emergency, or a traumatic event, crisis interviews are frequently done. In order to determine the person's urgent needs, spot any hazards or threats, and offer suitable interventions or recommendations to other services or resources, the interviewer employs a variety of strategies. A crisis interview's overarching objective is to assist the person in stabilizing and coping with the current crisis while also creating a plan for ongoing care and assistance. Various strategies may be used during the interview, including  such as active listening, empathy, validation, problem-solving, and crisis intervention strategies, depending on the nature and severity of the problem.

Learn more about interview-https://brainly.com/question/27782486

#SPJ11

it costs a publishing company 25,000 dollars to make e-books for the year. to help the publishing company sell the books, a marketing company charges 2 dollars for each book sold. if the company charges 10 dollars per book, what is the contribution dollars if they sell 20,000 books.

Answers

The publishing company sells 20,000 books at $10 per book and pays a marketing company $2 per book sold, they will make a contribution of $160,000. This is the amount of money that the publishing company will have left over to cover their fixed costs (such as salaries, rent, utilities, etc.) and to make a profit.

The publishing company is spending $25,000 to create e-books for the year. In order to sell these e-books, they have hired a marketing company to help them. The marketing company is charging $2 for each e-book sold. If the publishing company charges $10 per e-book, they will make a profit of $8 per book sold.Contribution dollars are calculated by subtracting the total variable costs from the total revenue. In this case, the total variable cost is the cost of marketing the books, which is $2 per book sold.

Therefore, the total variable cost for 20,000 books would be $40,000 (2 x 20,000).The total revenue generated by selling 20,000 books at $10 per book would be $200,000 (10 x 20,000). To calculate the contribution dollars, we need to subtract the total variable cost from the total revenue. Therefore, the contribution dollars would be $160,000 ($200,000 - $40,000).

For more such questions on company

https://brainly.com/question/24553900

#SPJ11

To supplement your planned retirement in exactly 35 years, you estimate that you need to accumulate $250,000 by the end of 35 years from today. You plan to make equal annual end-of-year deposits into an account paying 8% annual interest.
a. How large must the annual deposits be to create the $250,000 fund by the end of 35 years?
b. If you can afford to deposit only $750 per year into the account, how much will you have accumulated by the end of the 35th year?

Answers

a. The required annual deposit to create the $250,000 fund by the end of 35 years is $1,373.45.
b. If you deposit only $750 per year, you will have accumulated $197,634.80 by the end of the 35th year.


a. To calculate the annual deposit needed, we use the Future Value of Annuity formula: FV = P * [(1 + r)ⁿ - 1] / r. Here, FV = $250,000, r = 8% (0.08), and n = 35 years. Solving for P, the annual deposit:
P = FV / [(1 + r)ⁿ - 1] / r
P = 250,000 / [(1 + 0.08)³⁵- 1] / 0.08
P = 1,373.45

b. If you can afford only $750 per year, we use the same formula to find the future value with P = $750:
FV = 750 * [(1 + 0.08)³⁵ - 1] / 0.08
FV = 197,634.80

By the end of the 35th year, you will have accumulated $197,634.80 with $750 annual deposits.

To know more about Future Value click on below link:

https://brainly.com/question/30787954#

#SPJ11

Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.) $ 666,200 428,500 102,500 Sales Costs Depreciation EBIT Taxes (25%) Net income b. Calculate the OCF. (Do not round intermediate calculations.) c. What is the depreciation tax shield? (Do not round intermediate calculations.) b. OCF c. Depreciation tax shield

Answers

The depreciation tax shield is the tax savings that a company receives from deducting depreciation expenses from its taxable income. It can be calculated by multiplying the depreciation expense by the tax rate. In this case, the depreciation tax shield would be $102,500 x 0.25 = $25,625.

To fill in the missing numbers for the income statement, we need to first calculate the earnings before interest and taxes (EBIT). EBIT can be calculated by subtracting the costs and depreciation from the sales. Therefore, EBIT = $666,200 - $428,500 - $102,500 = $135,200.

Next, we can calculate the taxes by multiplying the EBIT by the tax rate of 25%. Taxes = $135,200 x 0.25 = $33,800.

Finally, we can calculate the net income by subtracting the taxes from the EBIT. Net income = $135,200 - $33,800 = $101,400.

To calculate the OCF (operating cash flow), we can use the formula OCF = EBIT + Depreciation - Taxes. From the income statement, we know that EBIT is $135,200 and the depreciation is $102,500. Therefore, OCF = $135,200 + $102,500 - $33,800 = $203,900.

To know more about depreciation tax shield refer here:

https://brainly.com/question/31381654#

#SPJ11

You have the following relationship between unemployment and GDP: u = 10.0 - 0.75(Y - 1000). If Y is 1,002$, how much is the natural rate of unemployment? What your answer as a percentage, round at one (1) decimal, but do not write the percentage sign.

Answers

The relationship between unemployment and GDP can be described by Therefore, the natural rate of unemployment is 8.5%.

An equation that takes into account the level of economic activity in the country. In this case, the equation is given as u = 10.0 - 0.75(Y - 1000), where u represents the unemployment rate, Y represents the GDP level, and 10.0 and 0.75 are constants.

If the GDP level is given as Y = 1,002$, we can substitute this value into the equation to find the natural rate of unemployment. When we do so, we get:

u = 10.0 - 0.75(Y - 1000)

u = 10.0 - 0.75(1,002 - 1000)

u = 10.0 - 0.75(2)

u = 10.0 - 1.5

u = 8.5

Therefore, the natural rate of unemployment is 8.5%. This means that in a healthy and stable economy, 8.5% of the workforce will be unemployed due to factors such as job search, changing industries, or seasonal work.

Knowing this rate can help policymakers and businesses make informed decisions about employment and economic growth strategies.

to know more about unemployment refer here

https://brainly.com/question/14227610#

#SPJ11

Other Questions
q1 homeworkunanswereddue today, 11:59 pm amanda is stretching to touch her toes. what component of physical activity is she working on? select an answer and submit. for keyboard navigation, use the up/down arrow keys to select an answer. a cardiorespiratory endurance b flexibility c muscular strength d body composition e muscle endurance the sds for 1-octanol is provided here. (links to an external site.) is 1-octanol a combustible liquid? Please helppppp!!! Like quick pleaseee a process which is busy-waiting at the cpu waiting for a lock to be set to unlocked is most likely in the state Blood becomes 98% oxygenated in ____ seconds the following balance sheet information is provided for duke company for year 2: assets cash $4,400 accounts receivable 10,550 inventory 14,200 prepaid expenses 1,000 plant and equipment, net of depreciation 18,900 land 12,800 total assets $61,850 liabilities and stockholders' equity accounts payable $2,430 salaries payable 8,830 bonds payable (due in ten years) 9,000 common stock, no par 19,500 retained earnings 22,090 total liabilities and stockholders' equity $61,850 what is the company's current ratio? (round your answer to 2 decimal places.) multiple choice 2.68 1.33 1.44 0.74 The radius of a circle is 10 cm. Find its area in terms of . 3.) People were moving fromagricultural areas to urbanareas for?a) economic opportunitiesb) housingc) better roadsd)coal mining jobs when a salesperson responds quickly to a service failure and delights the customer with the outcome, it is called All of the following are categories of new products except Multiple Choice brand extensions. O new-to-the market products. O new category entries. O product line extensions. O revamped products. forgetting anything good that happened on your trip to france because you just broke up with your french fiancee and now can't bear the thought of anything french is a good example of which problem with memory? A state legislature passes a law that states anyone with more than three traffic violations must pay the courts a fine equal to the cost of the most expensive vehicle involved in the citations. What is at least one Amendment this law violates?NinthEighthTenthSixth which three key levers below are needed for an organization to effectively design its reporting relationships and broader organizational structure? the Peso was worth Euro 0.0014. That weekend th Peso devalued against the Euro to Euro 0.0012. in percentage terms by how much did the euro appreciate against the peso? Instruction 1. Round your answer to two decimal places 2. Do not include the percentage If planned investment is perfectly responsive to changes in the interest rate, the planned investment scheduleA) has a negative slope. B) is horizontal. C) is vertical.D) has a positive slope. Describe how preparing for the festival affects Melantha. Use at least two details from the passage to support your answer Who supported the strictest plan for the South to rejoin the United States during Reconstruction?1. Radical Republicans2. President Lincoln3. Southern Democrats4. President Johnson Which of these expressions are equivalent to p/3 write a method called averagevowels that takes an arraylist of strings as a parameter and returns the average number of vowel characters Suppose you are a U.S. investor who is planning to invest $325,000 in Japan. You do so at a starting exchange rate of 86.28/$. Your Japanese investment gains 9.00 percent, and the ending exchange rate is 84.56/$. What is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)