Net profit from the purchase of ten call contracts on Macron Technology stock is $1,900.
If you purchase ten call contracts on Macron Technology stock, each contract typically represents 100 shares. Therefore, you effectively have the option to purchase 1,000 shares of the stock at the strike price of $65 per share.
The premium for the option contract is $2.10 per share, which means that you paid a total of $2.10 x 100 x 10 = $2,100 for the 10 option contracts.
If at expiration the stock is selling for $69 per share, your call options are worth:
$69 (market price - $65 (strike price) = $4 per share
Since each contract represents 100 shares, your options are worth $4 x 100 x 10 = $4,000.
To calculate your net profit, you need to subtract the initial premium paid from the value of the options at expiration:
Net profit = value of the options at expiration - initial premium
Net profit = $4,000 - $2,100
Net profit = $1,900
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a business structure that combines the tax benefits of a limited partnership but is similar to a corporation in that is publicly traded on a security exchange is known as a
The business structure that you are referring to is known as a Master Limited Partnership (MLP).
An MLP is a type of partnership that combines the tax benefits of a limited partnership with the liquidity and access to capital of a publicly traded corporation. This structure is commonly used in the energy, natural resources, and real estate industries, where companies require significant capital investments to finance their operations.
In an MLP, the general partner manages the partnership and is responsible for making all business decisions. The limited partners provide capital and have limited liability for the partnership's debts and obligations. The limited partners also receive a share of the partnership's income and tax benefits, which can include deductions for depreciation and depletion.
One of the key advantages of an MLP is that it can be publicly traded on a securities exchange, allowing investors to buy and sell units in the partnership.
This provides investors with liquidity and the ability to diversify their portfolios. Additionally, MLPs are not subject to federal income tax at the entity level, which can result in significant tax savings for the partnership and its investors.
Overall, the MLP structure is an attractive option for companies that require access to capital and want to take advantage of the tax benefits of a partnership while remaining publicly traded.
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Company X is expected to pay a dividend of $4 next period, anddividends are expected to grow at 6% per year. The required returnis 16%. What is the current price? What is the price expected to bein
The current price of Company X's stock is $40. Meanwhile, the price expected to be in year 4 is $50.50.
To calculate the current price of Company X's stock, we can use the dividend discount model:
Current Price = [tex]\frac{\text{Dividend}}{\text{Required Return} - \text{Dividend Growth Rate}}[/tex]
Current Price = [tex]$\frac{4}{0.16-0.06}$[/tex]
Current Price = $4 / 0.1
Current Price = $40
Therefore, the current price of Company X's stock is $40.
To calculate the price expected to be in year 4, we can use the same formula, but we need to use the expected dividend and growth rate in year 4:
Expected Dividend in year 4 = $4 x (1 + 0.06)⁴ = $4 x 1.262 = $5.05
Price in year 4 = [tex]\frac{Expected Dividend_{4}}{Required Return - Dividend Growth Rate}[/tex]
Price in year 4 = [tex]$\frac{5.05}{0.16 - 0.06}$[/tex]
Price in year 4 = $5.05 / 0.1
Price in year 4 = $50.50
Therefore, the price expected to be in year 4 is $50.50.
The complete question:
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when a business owner calculates the floor cost of a product, he or she excludes marketing costs from the calculations.group startstrue or false
True. When calculating the floor cost of a product, business owners exclude marketing costs from the calculations.
Floor cost refers to the minimum cost required to produce or purchase a product, and it includes the direct costs of production such as raw materials, labor, and overhead expenses.
Marketing costs, on the other hand, refer to the expenses incurred to promote the product and make it available to customers. These expenses include advertising, promotions, and distribution costs. Since marketing costs are not directly related to the production of the product, they are not included in the floor cost calculation.
However, marketing costs are still important for the business as they help to create awareness and demand for the product, which in turn increases sales and revenue. Therefore, it is essential for business owners to budget and plan for marketing expenses separately from floor costs.
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Question 11 of 20 -/1 View Policies Current Attempt in Progress When a firm has a period of mixed dividend growth followed by a period of no growth one can find the current price by calculating the present value of the mixed dividends and adding it to the presentvalue of the price at the point when it experiences no growth. True False Attempts: 0 of 1 used Submit Answer Save for Later
The statement is true because it is consistent with the dividend discount model (DDM) used to estimate the intrinsic value of a stock based on its future dividends.
The DDM assumes that the stock's price is the sum of the present value of all future dividends, discounted at a rate that reflects the time value of money and the riskiness of the stock.
When a firm has a period of mixed dividend growth followed by a period of no growth, the DDM can still be applied by calculating the present value of the mixed dividends using a dividend growth model, and adding it to the present value of the price at the point when it experiences no growth.
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Conceptually, the cost of capital in Malaysia is likely to be____ than that of the U.S. and ____ than that of Japan.A. higher; higherB. lower; lowerC. lower; higherD. higher; lower
Conceptually, the cost of capital in Malaysia is likely to be c. lower than that of the U.S. and higher than that of Japan (Option C).
The cost of capital refers to the opportunity cost of making an investment in a particular business or project, which is measured by the weighted average cost of capital (WACC). Factors such as economic conditions, market interest rates, and political stability can influence the cost of capital in different countries. The U.S. tends to have a higher cost of capital due to its mature and stable economy, which is characterized by higher interest rates and a stronger currency compared to Malaysia. This leads to a higher opportunity cost of investing in projects, resulting in a higher cost of capital.
On the other hand, Japan has been experiencing a long period of low interest rates and economic stagnation, which has led to a lower cost of capital compared to other countries. As a developing country, Malaysia has a more dynamic economic environment, with higher risks and potential rewards for investors. This results in a cost of capital that is lower than the U.S. but higher than Japan. Conceptually, the cost of capital in Malaysia is likely to be c. lower than that of the U.S. and higher than that of Japan, the correct answer is c. lower, higher.
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(IRR with uneven cash flows) The Tiffin Barker Corporation is considering introducing a new currency verifier that has the ability to identify counterfeit dollar bills. The required rate of return on this project is 12 percent. What is the IRR on this project if it is expected to produce the following cash flows: The IRR on this project is %. (Round to two decimal places.) Initial outlay - $927,917 FCF in year 1 200,000 FCF in year 2 300,000 FCF in year 3 300,000 FCF in year 4 200,000 FCF in year 5 200,000 FCF in year 6 160,000 (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) Enter your answer in the answer box and then click Check Answer(IRR with uneven cash flows) The Tiffin Barker Corporation is considering introducing a new currency verifier that has the ability to identify counterfeit dollar bills. The required rate of return on this project is 12 percent. What is the IRR on this project if it is expected to produce the following cash flows: ? The IRR on this project is %. (Round to two decimal places.)
The IRR on this project is 16.17%.
To calculate the IRR of the project, we need to find the discount rate at which the net present value (NPV) of the cash flows equals zero. Using the given cash flows and the required rate of return of 12%, we can calculate the NPV of the project using the formula:
NPV = -Initial Outlay + (CF1 / (1+r)^1) + (CF2 / (1+r)^2) + ... + (CFn / (1+r)^n)
We can then use trial and error or an Excel function to find the discount rate that makes NPV equal to zero, which turns out to be 16.17%. This means that the project's expected return is greater than the required rate of return of 12%, indicating that it is a good investment.
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How much must be deposited at the end of each quarter for 7.5
years to accumulate to $27000.00 at 6.84% compounded monthly?
The amount that must be deposited at the end of each quarter for 7.5 years to accumulate to $27,000.00 at an interest rate of 6.84% compounded monthly is approximately $2,880.38.
How much must be deposited?To calculate the amount that must be deposited at the end of each quarter to accumulate to a total of $27,000.00 over 7.5 years at an interest rate of 6.84% compounded monthly, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the total amount accumulatedP = the principal amount (the deposit to be made at the end of each quarter)r = the annual interest rate (in decimal form)n = the number of times interest is compounded per yeart = the time period for which the interest is compounded (in years)In this case, the interest is compounded monthly, so n = 12 (12 months in a year), and the time period is 7.5 years.
Plugging in the given values:
A = $27,000.00
r = 6.84% or 0.0684 (in decimal form)
n = 12
t = 7.5 years
We can now solve for P:
27,000 = P(1 + 0.0684/12)^(12*7.5)
Dividing both sides by (1 + 0.0684/12)^(12*7.5), we get:
P = 27,000 / (1 + 0.0684/12)^(12*7.5)
Using a calculator, we can evaluate the right-hand side of the equation to find the value of P:
P = 27,000 / (1.005698763)^(90)
P ≈ $2,880.38
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If the production function is Q = 30 + 33L + 16K, what’s the
most you can produce with 5 workers (L) and 3 unit of capital (K)?
Enter as a value.
The maximum amount that can be produced with 5 workers and 3 units of capital is 243 units.
The production function is a mathematical equation that shows the maximum amount of output (Q) that can be produced with a given amount of inputs such as labor (L) and capital (K). In the case of the given production function Q = 30 + 33L + 16K, the output depends on the number of workers and units of capital used.
To answer the question, we need to plug in the given values of L = 5 and K = 3 into the production function and solve for Q.
Q = 30 + 33(5) + 16(3)
Q = 30 + 165 + 48
Q = 243
Therefore, the maximum amount that can be produced with 5 workers and 3 units of capital is 243 units.
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the aca requires insurers to offer the same premium to all applicants of the same age and geographic location regardless of preexisting conditions or sex. compared to insurance not written subject to these restrictions, the premiums for the aca compliant policies can be expected to be
Compared to insurance policies not written subject to these restrictions, the premiums for ACA-compliant policies can be expected to be D. Higher.
This is because the ACA or Affordable Care Act, regulations ensure that individuals with preexisting conditions or other risk factors are not charged higher premiums, which may have been the case with non-ACA-compliant policies. Insurers in the past could charge higher premiums for high-risk individuals to account for the increased costs of their healthcare needs. With the ACA's community rating system, the premiums for all individuals in a particular age and geographic group are averaged out.
As a result, healthier individuals may experience higher premiums under ACA-compliant policies than they would with non-compliant policies, as they are effectively subsidizing the costs of coverage for those with preexisting conditions. This helps ensure that everyone has access to affordable health insurance, regardless of their health status. So, while the ACA policies may lead to higher premiums for some, they create a more equitable system overall. Therefore, the correct option is D.
The question was incomplete, Find the full content below:
the ACA requires insurers to offer the same premium to all applicants of the same age and geographic location regardless of preexisting conditions or sex. compared to insurance not written subject to these restrictions, the premiums for the ACA compliant policies can be expected to be
A. Unable to determine
B. The same
C. Lower
D. Higher
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8. Why do we construct portfolio? Give some examples to explain how this works to reduce portfolio risk. (10 marks) I
A portfolio is a collection of investments, such as stocks, bonds, and other securities. Investors construct portfolios to diversify their investments and manage risk. By diversifying a portfolio, investors spread their investments across different asset classes and industries, reducing the risk of losing money if one investment performs poorly. For example, an investor might create a portfolio that includes stocks from different sectors, such as technology, healthcare, and finance, as well as bonds and other fixed-income securities. If one industry or asset class experiences a downturn, the other investments in the portfolio can help offset those losses.
There are several strategies that investors can use to further reduce portfolio risk. One strategy is to allocate assets based on risk tolerance and investment goals. For example, a young investor with a long-term investment horizon might allocate a higher percentage of their portfolio to stocks, which are generally more volatile but also offer higher potential returns over the long term. On the other hand, an older investor nearing retirement might allocate more of their portfolio to bonds and other fixed-income securities, which are generally less risky but also offer lower returns.
Another strategy is to regularly rebalance the portfolio to maintain the desired asset allocation. Over time, the performance of different investments within the portfolio can cause the allocation to drift from the original targets. Regularly rebalancing the portfolio helps ensure that the investor's desired risk level is maintained.
Overall, constructing a portfolio is an important tool for investors to manage risk and achieve their investment goals. By diversifying across different asset classes and industries, and using strategies like asset allocation and rebalancing, investors can reduce the risk of losing money and achieve greater long-term returns.
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ABC Plc , in its 2021 finance statements is reporting total equity of €1572, total non-current liabilities of €200, gross profit of €400 and operating profit of €88. What is the Return on Capital employed as a percentage?
a. 4.97%
b. 44%
c. 20.14%
d.25.45%
The Return on Capital Employed for ABC Plc in 2021 is 4.97%.
To calculate ROCE, we'll need to follow these steps:
1. Calculate Capital Employed: Capital Employed is the total amount of funds used by a company in its operations. It is calculated as Total Equity + Non-Current Liabilities. In this case, Total Equity is €1,572, and Non-Current Liabilities are €200. So, Capital Employed = €1,572 + €200 = €1,772.
2. Find the Operating Profit: Operating Profit is the profit earned from a company's core business operations. In this case, the Operating Profit is given as €88.
3. Calculate ROCE: To find the ROCE, we need to divide the Operating Profit by Capital Employed and multiply the result by 100 to express it as a percentage. In this case, ROCE = (€88 / €1,772) * 100.
4. Calculate the percentage: ROCE = (€88 / €1,772) * 100 = 4.97%
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Large-cap stocks had the nominal rates of return of 14.81 percent. The rate of inflation during the last year was 2.37 percent. What is the real rate of return for large-cap stocks?
Round the answer to two decimal places in percentage form.
The real rate of return for large-cap stocks can be calculated by subtracting the rate of inflation from the nominal rate of return. Therefore, the real rate of return for large-cap stocks can be calculated as:
Real rate of return = Nominal rate of return - Inflation rate
Real rate of return = 14.81% - 2.37%
Real rate of return = 12.44%
Hence, the real rate of return for large-cap stocks is 12.44% rounded to two decimal places in percentage form. This means that the large-cap stocks generated a return of 12.44% after adjusting for inflation during the last year.
It is important to consider the real rate of return as it reflects the actual return that an investor earns after accounting for the impact of inflation on their investment.
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A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's _organizational structure. (true or false)
The given statement "A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's organizational structure." is True.
Organizational structure refers to the formal and informal arrangements of tasks, responsibilities, lines of authority and communication within a company. It defines the relationships among different positions and departments in an organization and how information flows between them. A well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts. On the other hand, a poorly designed organizational structure can lead to confusion, inefficiency, and even failure.
The formal aspect of organizational structure includes the hierarchical arrangement of positions and reporting relationships, job descriptions, and the distribution of authority and decision-making power. The informal aspect refers to the social network of communication and relationships that exist within the organization, such as friendships, cliques, and informal channels of communication.
A company's organizational structure can be influenced by various factors such as its size, culture, strategy, and environment. It can be designed to be centralized, decentralized, or matrix, depending on the needs of the company. Ultimately, a well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts.
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The licensed practical nurse (LPN) is working in a surgical rehabilitation unit. Which
nursing task would be most appropriate for the LPN to implement?
1. Bathe the client who is incontinent of urine.
2. Document the amount of food the client eats.
3. Conduct the afternoon bingo game in the lobby.
4. Perform routine dressing changes on assigned clients.
The most appropriate nursing task for a licensed practical nurse (LPN) working in a surgical rehabilitation unit would be option 4: Perform routine dressing changes on assigned clients. This task is practical and directly related to the LPN's role in patient care, specifically addressing wound management and healing.
Dressing changes would fall within the scope of practice for an LPN. Bathing a client who is incontinent of urine may also be within an LPN's scope of practice, but it depends on the specific policies and procedures of the facility and the state's nurse practice act. Documenting the amount of food a client eats is typically the responsibility of a nursing assistant or a registered nurse. Conducting a bingo game would be considered a recreational activity and is not a nursing task. LPNs typically complete a one-year vocational or community college program and pass a national licensure exam. In some states, LPNs are also allowed to perform additional tasks, such as administering intravenous medications or performing certain diagnostic tests. In a surgical rehabilitation unit, LPNs may be responsible for providing care to patients who are recovering from surgical procedures. This can include monitoring wounds, administering medications, and assisting with activities of daily living. LPNs work closely with registered nurses and other members of the healthcare team to ensure that patients receive high-quality care.
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Perform routine dressing changes on assigned clients, would be the most appropriate nursing task for the licensed practical nurse (LPN) to implement in a surgical rehabilitation unit.
LPNs are licensed healthcare professionals who work under the supervision of registered nurses (RNs) and physicians to provide basic patient care. They have specific training and skills that enable them to perform routine nursing tasks such as administering medications, taking vital signs, and performing dressing changes.
Performing routine dressing changes on assigned clients is within the scope of practice for an LPN and is an essential nursing task in a surgical rehabilitation unit. Dressing changes may be required daily or even multiple times per day, depending on the nature of the surgery and the wound. LPNs can perform routine dressing changes, which may include removing old dressings, cleaning the wound, and applying new dressings, under the supervision of an RN or physician.
While bathing a client who is incontinent of urine, documenting the amount of food the client eats, and conducting the afternoon bingo game in the lobby are also important nursing tasks, these tasks may not require the same level of training or skill as performing dressing changes. It is important to ensure that LPNs are working within their scope of practice and that their nursing tasks are appropriate for their level of training and skill.
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Strategic management focuses on integrating management, ________, and information systems to achieve organizational success.
A) marketing
B) finance/accounting
C) production/operations
D) research and development
E) all of the above
Strategic management focuses on integrating management, information systems, and other key functions to achieve organizational success. In this context, the correct answer is E) all of the above.
Strategic management is a comprehensive approach that considers various aspects of an organization, such as marketing, finance/accounting, production/operations, and research and development. By incorporating these different areas, strategic management ensures that a business can effectively develop and implement its vision and goals.
Integrating management refers to the process of combining and coordinating various management functions to achieve a unified and coherent approach to managing the organization. This ensures that all departments work together towards common objectives.
Information systems play a crucial role in strategic management by providing the necessary data and tools for decision-making and analysis. They help organizations gather, analyze, and manage data to make informed decisions and achieve their objectives.
To summarize, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success.
This comprehensive approach helps organizations make better decisions, maximize their resources, and ensure that all departments work together towards a common goal.
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Union Company is considering establishment of a zerobalance account. The firm currently maintains an average balance of $420,000 inits disbursement account. As compensation to the bank for maintaining the zerobalance account, the firm will have to pay a monthly fee of $1,000 and maintain a $300,000 non
The recommendation for Union Company is to maintain its current disbursement account.
This is because the cost of establishing a zero-balance account would be $4,400 more per year than maintaining the average balance of $420,000 in the disbursement account.
The opportunity cost of maintaining the $300,000 non-interest-earning deposit is calculated as follows:
Opportunity Cost = 12% x $300,000
Opportunity Cost = $36,000 per year
The total cost of the zero-balance account is calculated as follows:
Monthly fee = $1,000
Annual fee = $1,000 x 12 = $12,000
Opportunity Cost = $36,000 per year
Total cost = Annual fee + Opportunity Cost
Total cost = $12,000 + $36,000
Total cost = $48,000 per year
On the other hand, if the firm maintains an average balance of $420,000 in its disbursement account, it could earn interest income at a rate of 12% per year, as given in the question. The interest income is calculated as follows:
Interest Income = 12% x $420,000
Interest Income = $50,400 per year
Comparing the total cost of the zero-balance account and the interest income earned by maintaining the average balance, we can see that the total cost of the zero-balance account is $4,400 more per year than the interest income earned by maintaining the average balance. Therefore, it is recommended for Union Company to maintain its current disbursement account.
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Mannix Corporation stock currently sells for $110 per share. The market requires a return of 9 percent on the firm's stock. If the company maintains a constant 4 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?
The most recent dividend per share paid on the stock was $3.36.
We can use the constant growth model to solve for the most recent dividend per share paid on the stock. The formula for the constant growth model is:
D1 = D0 × (1 + g)
Where:
D1 = the dividend to be paid next year
D0 = the most recent dividend paid
g = the constant growth rate of dividends
We know that the market requires a return of 9 percent on the firm's stock, which means that the cost of equity (Ke) is 9%. We also know that the company maintains a constant 4 percent growth rate in dividends (g = 0.04).
Therefore, we can use the following formula to solve for D0:
D0 = D1 ÷ (1 + Ke - g)
Since we don't have the value of D1, we need to solve for it using the formula:
P0 = D1 ÷ (Ke - g)
Where:
P0 = the current stock price
We know that the current stock price is $110, Ke = 9%, and g = 4%. Plugging these values into the formula, we get:
$110 = D1 ÷ (0.09 - 0.04)
Solving for D1, we get:
D1 = $110 × (0.09 - 0.04) = $5.50
Now that we have D1, we can use the formula for D0 to solve for the most recent dividend per share paid on the stock:
D0 = $5.50 ÷ (1 + 0.09 - 0.04) = $3.36
Therefore, the most recent dividend per share was $3.36.
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abc company has the following current assets and current liabilities info on its balance sheet. how much net operating working capital does the firm have? cash $47 accounts payable $55 short-term investments 20 accruals 54 accounts receivable 65 notes payable 10 inventory 50 current assets $47 20 65 50 current liabilities $55 54 10
Answer: $53. Brainliest?
Explanation:
To calculate the net operating working capital (NOWC) of the firm, we need to subtract the non-operating current assets and liabilities from the operating current assets and liabilities.
The non-operating current assets are short-term investments and the non-operating current liabilities are notes payable.
So, the operating current assets are:
cash = $47
accounts receivable = $65
inventory = $50
Total operating current assets = $47 + $65 + $50 = $162
The operating current liabilities are:
accounts payable = $55
accruals = $54
Total operating current liabilities = $55 + $54 = $109
Net operating working capital = Operating current assets - Operating current liabilities
= $162 - $109
= $53
Therefore, the firm has a net operating working capital of $53.
I purchased 100 IBM stock shares 5 years ago for $5.5 per share. I received the only dividend payment of $0.1 per share from IBM yesterday and the current IBM stock price is $7.0 per share. What is my average annual investment return from the IBM shares over the past 5 years (keep two decimal places such as 0.12)?
your average annual investment return from the IBM shares over the past 5 years is 4.69%.
To calculate your average annual investment return from the IBM shares, we need to use the following formula:
Average Annual Investment Return = [(Current Value of Investment / Initial Value of Investment)^(1/Number of Years) - 1] x 100%
Let's plug in the values we know:
Current Value of Investment = 100 shares x $7.0 per share = $700
Initial Value of Investment = 100 shares x $5.5 per share = $550
Number of Years = 5
Using the formula, we get:
Average Annual Investment Return = [($700 / $550)^(1/5) - 1] x 100%
= [1.27272727^(1/5) - 1] x 100%
= [1.04690118 - 1] x 100%
= 0.04690118 x 100%
= 4.69%
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which of the following is an advantage of the first in, first out (fifo) method? a. it results in lower tax liability. b. it reduces the risk of spoilage. c. record keeping is simple under this method. d. this method involves no complex calculations.
The advantage of the first in, first out FIFO method is that it reduces the risk of spoilage. Option B is correct.
The FIFO method assumes that the first items that are purchased or produced are the first items sold or used, which means that the oldest inventory is always used first. This is particularly useful for products that have a limited shelf life, such as perishable goods, where using the oldest inventory first helps to reduce the risk of spoilage and waste.
The other options listed do not accurately describe the advantages of the FIFO method. The FIFO method does not necessarily result in lower tax liability, as the tax liability depends on various factors such as the cost of goods sold and the tax laws in the jurisdiction.
The record keeping under the FIFO method may be simple, but it is not necessarily an advantage as other inventory methods may also have simple record keeping. Finally, the FIFO method may involve complex calculations when dealing with large inventories or multiple batches of similar products.
Hence, B. is the correct option.
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The treasurer of a major U.S. firm has $28 million to invest for three months. The interest rate in the United States is .28 percent per month. The interest rate in Great Britain is .32 percent per month. The spot exchange rate is £.628, and the three-month forward rate is £.631.
What would be the value of the investment if the money is invested in U.S and Great Britain? (Enter your answers in dollars, not in millions of dollars, and round your answers to 2 decimal places, e.g., 1,234,567.89.)
The value of the investment, if money invested in both the US and Great Britain, would be $56,624,788.01.
How we calculate the value of the investment?To calculate the value of the investment in the US, we can use the formula:
Value of investment = Principal x (1 + interest rate[tex])^t^i^m^e^[/tex]
Where the principal is $28 million, the interest rate is 0.28% per month, and the time is 3 months.
So the value of the investment in the US would be:
Value of investment in US = $28,000,000 x (1 + 0.0028[tex])^3[/tex]
= $28,236,924.96
To calculate the value of the investment in Great Britain, we first need to convert the principal into pounds using the spot exchange rate of £0.628 per dollar:
Principal in pounds = $28,000,000 x £0.628
= £17,584,000
Then we can use the formula:
Value of investment = Principal x (1 + interest rate[tex])^t^i^m^e[/tex] x forward exchange rate
Where the principal is £17,584,000, the interest rate is 0.32% per month, the time is 3 months, and the forward exchange rate is £0.631 per dollar.
So the value of the investment in Great Britain would be:
Value of investment in Great Britain = £17,584,000 x (1 + 0.0032[tex])^3[/tex] x £0.631
= $28,387,864.05
Therefore, the total value of the investment in both the US and Great Britain would be:
Total value of investment = Value of investment in US + Value of investment in Great Britain
= $28,236,924.96 + $28,387,864.05
= $56,624,788.01.
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which of the following is not a wrap-up closure activity that might be found on a checklist? question 53 options: getting delivery acceptance from the customer reassigning project team members closing accounts and seeing all bills are paid evaluation of team performance creating a final report
When it comes to wrap-up closure activities that might be found on a checklist, reassigning project team members is not one of them.The correct answer to this question is "reassigning project team members".
Wrap-up closure activities are those tasks that are performed at the end of a project or task to ensure that all loose ends are tied up and the project is complete. These activities can include getting delivery acceptance from the customer, closing accounts and ensuring all bills are paid, evaluating team performance, and creating a final report. Getting delivery acceptance from the customer is an important step in the closure process as it ensures that the customer is satisfied with the work that has been completed and that there are no outstanding issues that need to be addressed.
Closing accounts and ensuring all bills are paid is also crucial to ensure that all financial obligations have been met and that the project has been completed within the allocated budget.Evaluating team performance is important to identify any areas for improvement in future projects and to recognize team members for their contributions.
Creating a final report is also important to document the project and its outcomes for future reference.Reassigning project team members, on the other hand, is not a wrap-up closure activity. This would typically be done earlier in the project if there are any changes in team members or responsibilities. It is not a task that would be done specifically as part of the closure process.The correct answer to this question is "reassigning project team members".
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A company's capital structure is as follows: $10 million in preferred stock, $100 million in common stock, and $10 million in bonds. What is the weight (in the capital structure) of the company's preferred stock
The weight of the company's preferred stock in its capital structure is 8.33%. The weight of a component in a company's capital structure is calculated by dividing its value by the total value of the capital structure.
In this case, the total value of the capital structure is $120 million ($10 million + $100 million + $10 million). Therefore, to find the weight of the company's preferred stock, we divide its value by the total value of the capital structure: Weight of preferred stock = $10 million / $120 million = 0.0833 or 8.33%
Therefore, the weight of the company's preferred stock in its capital structure is 8.33%. This means that the preferred stock represents 8.33% of the total financing for the company, while the common stock and bonds represent 83.33% and 8.33%, respectively.
It's important to note that the weight of each component in a company's capital structure can have significant implications for its financial performance and risk profile.
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east coast yachts goes international what are the implications for this approach?how can the company hedge its exchange rate risk? what are the implications for this approach?
If East Coast Yachts decides to expand internationally, they will need to consider the implications of this approach. One of the main implications is the exposure to exchange rate risk. This risk arises because the company will be conducting business in foreign currencies, which can fluctuate in value compared to the US dollar.
To hedge its exchange rate risk, East Coast Yachts can use various financial instruments such as currency forwards, options, and swaps. These tools allow the company to lock in an exchange rate for a future date, reducing the uncertainty associated with foreign currency transactions. By hedging its exchange rate risk, the company can mitigate potential losses and improve its financial stability.
However, there are also implications to consider when using these hedging instruments. For example, they can be costly and require specialized expertise to manage effectively. Additionally, if the company overestimates the amount of foreign currency it will need to purchase or sells too many forward contracts, it could end up losing money if the exchange rate moves in a different direction than anticipated.
Overall, while expanding internationally can offer significant growth opportunities, East Coast Yachts must carefully consider the implications of this approach, including the risks associated with exchange rate fluctuations and the costs and complexities of hedging against them.
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summary of the article
Internet banking and ATMs applications; in the context of the
multi-currencies economy.
Nidal Rashid Sabri
The article discusses the importance of internet banking and ATM applications in a multi-currency economy. The author argues that these technologies provide convenience and cost-effectiveness for consumers and businesses dealing with different currencies. The article also highlights the challenges of implementing such systems, including security and regulatory concerns.
In summary, the article emphasizes the benefits and challenges of using internet banking and ATM applications in a multi-currency economy.
While these technologies can provide convenience and cost-effectiveness, they also require careful consideration of security and regulatory issues.
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Exchange rates are influenced by all of the following EXCEPT:
A. political risks
B. purchasing power of the foreign country
C. purchasing power of the home currency
D. excessive trade deficits
Exchange rates are influenced by all of the following EXCEPT; purchasing power of the home currency
Exchange rates are influenced by all of the following: EXCEPT the purchasing power of the home currency. Factors that influence exchange rates include:
A. Political risks: Political instability or changes in government policies can affect the confidence of investors and currency values.
B. Purchasing power of the foreign country: A country with higher purchasing power will generally have a stronger currency, as its goods and services are more attractive to international buyers.
D. Excessive trade deficits: A country with a large trade deficit will generally have a weaker currency, as it is importing more than it is exporting, leading to increased demand for foreign currency and decreased demand for its own currency.
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assume that the physical property of a business is valued at $50,000. the company's commercial property policy contains a coinsurance clause with a stated percentage of 80 percent. the company insures the property for $30,000 (75 percent of the specified minimum). the company incurs a fire loss of $20,000. how much of the loss will the insurance company pay for?
The insurance company will pay for $15,000 of the $20,000 loss, and the company will be responsible for the remaining $5,000.
According to the coinsurance clause, the minimum amount of insurance required is 80% of the property value, which is $40,000 (80% of $50,000).
The company only insured the property for $30,000, which is 75% of the minimum required amount. Therefore, the company is underinsured by $10,000 ($40,000 - $30,000).
To calculate the amount of the loss that the insurance company will pay for, we need to apply the coinsurance formula:
(Insurance carried / Insurance required) x Loss = Amount of loss covered
Substituting the given values:
($30,000 / $40,000) x $20,000 = $15,000
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Bond rating changes impact not only the ____________ of the bonds, but also the ____________ that the company or municipality would have to pay if it issued new bonds.
Question 4 options: 1) PE ratios; underwriting fees 2) Expense ratios; underwriting fees 3) Current prices; interest rate 4) None of the options listed
Differentiate between a) normal and non-normal cash
flows b) independent and mutually exclusive projects
Hi, I'd be happy to help you differentiate between a) normal and non-normal cash flows and b) independent and mutually exclusive projects.
a) Normal and Non-Normal Cash Flows:
Normal cash flows are characterized by an initial cash outflow (investment) followed by a series of cash inflows (returns) over the life of the project. These cash flows typically follow a predictable pattern, with no change in the direction of cash flow (i.e., from negative to positive or vice versa) after the initial investment.
Non-normal cash flows, on the other hand, exhibit irregular patterns, with changes in the direction of cash flow (from negative to positive or vice versa) occurring multiple times throughout the project's duration. This can occur due to factors such as additional investments, unplanned expenses, or irregular revenue streams.
b) Independent and Mutually Exclusive Projects:
Independent projects are those that can be undertaken simultaneously without affecting the cash flows or the decision-making process of any other project. The acceptance or rejection of one independent project does not impact the feasibility or desirability of any other project.
These projects can be analyzed individually, and their net present value (NPV) or internal rate of return (IRR) can be compared to make investment decisions.
Mutually exclusive projects are those in which the acceptance of one project implies the rejection of another, as the projects compete for the same resources (e.g., capital, labor, or market share). In this case, it is necessary to compare and evaluate the projects based on criteria such as NPV, IRR, or profitability index to determine which project offers the highest value to the organization.
In summary, normal cash flows have a predictable pattern with one initial outflow, while non-normal cash flows exhibit irregular patterns. Independent projects can be undertaken simultaneously without affecting others, whereas mutually exclusive projects compete for resources and only one can be chosen.
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Company B paid dividend in 2021 of 1,7 USD, in line with the expected dividend growth of 5% each year. Company C has announced it expects to pay a 2,1 dividend to common shareholders in 2022, and its cost of equity (CAPM) is of 8.9%. (Company´s C paid dividend in 2020 of 2). Both companies are from the automotive sector where the expected rate of return of the market is of 6%. a. Which company has the most expensive share price? b. Would you rather buy stocks of Company B or C considering that Company B stock is trading at 27 and Company C stock at 99
a. Company C has the most expensive share price.
b. I would recommend buying stocks of Company B.
To compare the companies, we'll use the Dividend Discount Model (DDM) to estimate the intrinsic value of their shares.
For Company B:
1. Calculate the expected dividend for 2022: 1.7 USD * (1 + 0.05) = 1.785 USD
2. Estimate the stock value using DDM: P = D / (r - g), where P = stock price, D = dividend, r = required rate of return, and g = growth rate.
3. Using market rate of return as r (6%), P = 1.785 / (0.06 - 0.05) = 178.5 USD.
For Company C:
1. Expected dividend for 2022: 2.1 USD
2. Estimate the stock value using DDM: P = D / (r - g), using Company C's cost of equity (CAPM) as r (8.9%).
3. Assuming the same growth rate (5%) as Company B, P = 2.1 / (0.089 - 0.05) = 50.6 USD.
Company B's intrinsic value (178.5 USD) is higher than its trading price (27 USD), making it a better investment compared to Company C with a trading price of 99 USD and an intrinsic value of 50.6 USD.
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