The maximum price Joseph should be willing to pay for a share of the bank's stock is $30.85, rounded to 2 decimal places.
How to calculate maximum price?To calculate the maximum price Joseph should be willing to pay for a share of First National Bank's stock, we will use the Dividend Discount Model, which incorporates dividend income, required return, and stock price. Given the dividend of $6.17 and required return of 20.0%, we can find the maximum price as follows:
1. Write down the Dividend Discount Model formula: P = D / r
where P is the stock price, D is the dividend, and r is the required return.
2. Plug in the values given: D = $6.17, and r = 20.0% (0.20 as a decimal).
3. Calculate the maximum price: P = $6.17 / 0.20
4. Round the answer to 2 decimal places: P ≈ $30.85
Based on the information provided, the maximum price Joseph should be willing to pay for a share of First National Bank's stock is $30.85.
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Profitability Index A project has an initial cost of $45,000, expected net cash inflows of $10,000 per year for 12 years, and a cost of capital of 8%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
The project's profitability index is 1.67, which indicates that for every dollar invested, $1.67 in present value is anticipated to be generated. The project is okay because PI is higher than 1.
To calculate the profitability index (PI) of the project, we need to find the present value of all the expected cash inflows and divide it by the initial investment. Here's a step-by-step solution:
Construct a timeline of the project's cash flows:
bash
Copy code
0 1 2 12
|--------------|---------------|------------------|
-$45,000 $10,000 $10,000 $10,000
Calculate the present value (PV) of each cash flow using the formula:
PV = CF / (1 + r)^n
where CF is the cash flow, r is the discount rate (cost of capital), and n is the number of periods.
For the initial investment, n=0, so PV = -$45,000.
For the annual cash inflows, n=1 to n=12, so we can use a calculator or spreadsheet to find the PVs:
PV = $10,000 / (1 + 0.08)^n
PV(Year 1) = $9,259.26
PV(Year 2) = $8,564.25
PV(Year 3) = $7,924.41
PV(Year 4) = $7,334.78
PV(Year 5) = $6,791.72
PV(Year 6) = $6,291.87
PV(Year 7) = $5,831.18
PV(Year 8) = $5,406.87
PV(Year 9) = $5,016.44
PV(Year 10) = $4,657.59
PV(Year 11) = $4,328.28
PV(Year 12) = $4,026.68
Add up all the present values of the cash flows:
PV of cash inflows = $9,259.26 + $8,564.25 + $7,924.41 + $7,334.78 + $6,791.72 + $6,291.87 + $5,831.18 + $5,406.87 + $5,016.44 + $4,657.59 + $4,328.28 + $4,026.68
= $75,161.36
Calculate the project's PI by dividing the PV of cash inflows by the initial investment:
PI = PV of cash inflows / Initial investment
= $75,161.36 / $45,000
= 1.67 (rounded to two decimal places)
Therefore, the project's profitability index is 1.67, which means that the project is expected to generate $1.67 in present value for every $1 invested. Since PI is greater than 1, the project is acceptable.
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The breakeven share price for a call option is Select one: O a. When stock price equals cost of the option minus the exercise price. ob. When stock price equals strike price. oc When stock price equals cost of the option plus the exercise price. O d. You never breakeven with call options
The breakeven share price for a call option is when the stock price equals the cost of the option plus the exercise price. In this case, the correct answer is option c.
1. A call option gives the buyer the right, but not the obligation, to buy a stock at a specific price, called the exercise (or strike) price, within a certain time period.
2. The cost of the option is also known as the premium, which is the price the buyer pays to purchase the call option.
3. To break even on a call option, the stock price must rise enough to cover the cost of the option (premium) and the exercise price.
4. Therefore, the breakeven share price for a call option is when the stock price equals the cost of the option (premium) plus the exercise (strike) price.
oc. When the stock price equals the cost of the option plus the exercise price.
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what must management do under sox 404?
Answer:
Sarbanes-Oxley Act (SOX) Section 404 mandates that all publicly traded companies must establish internal controls and procedures for financial reporting and must document, test, and maintain those controls and procedures to ensure their effectiveness.
Stock W has a beta of 1.23, Stock X has a beta of 1.04, Stock Y has a beta of 0.24,and stock Z has a beta of -0.09.
If you have a portfolio which contains equal proportions of stocks X, Y & Z, what is the portfolio beta (to two decimal places) ?
The portfolio beta (to two decimal places) is 0.39. To calculate the portfolio beta with equal proportions of stocks X, Y, and Z, we'll follow these steps:
1. Determine the proportion of each stock in the portfolio. Since they are equal proportions, each stock will have a 1/3 or 0.33 share.
2. Multiply each stock's beta by its respective proportion.
3. Add the results from step 2 to get the portfolio beta.
Your answer: The portfolio beta with equal proportions of stocks X, Y, and Z is calculated as follows:
(1.04 * 0.33) + (0.24 * 0.33) + (-0.09 * 0.33) = 0.34 + 0.08 - 0.03 = 0.39
The portfolio beta (to two decimal places) is 0.39.
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Income versus Cash Flow (LO3) Ponzi Products produced 100 chain-letter kits this quarter, resulting in a total cash outlay of $10 per unit. It will sell 50 of the kits next quarter at a price of $11, and the other 50 kits in the third quarter at a price of $12. It takes a full quarter for Ponzi to collect its bills from its customers. (Ignore possible sales in earlier or later quarters.) (Negative amount should be indicated by a minus sign.) a. What is the net income for Ponzi next quarter? Net Income in second quarter s 550 b. What are the cash flows for the company this quarter?
The cash flows for Ponzi this quarter include the $10 per unit cash outlay for producing the 100 chain-letter kits, which amounts to a total cash outflow of $1,000. There are no cash inflows this quarter since no kits are being sold. So the cash flow for the company this quarter is a negative $1,000.
a. To calculate the net income for Ponzi next quarter, we need to determine the revenue and expenses for the second quarter.
Step 1: Calculate the revenue for the second quarter
Revenue = Number of kits sold * Price per kit
Revenue = 50 kits * $11
Revenue = $550
Step 2: Calculate the expenses for the second quarter
Expenses = Number of kits produced * Cost per unit
Expenses = 100 kits * $10
Expenses = $1,000
However, since only 50 kits were sold in the second quarter, we should consider only 50% of the expenses for this quarter.
Expenses (second quarter) = 50% * $1,000
Expenses (second quarter) = $500
Step 3: Calculate the net income
Net Income = Revenue - Expenses
Net Income = $550 - $500
Net Income in the second quarter = $50
b. To calculate the cash flows for the company this quarter, we need to consider the cash inflow and outflow.
Step 1: Calculate cash outflow (cash spent on producing the kits)
Cash outflow = Number of kits produced * Cost per unit
Cash outflow = 100 kits * $10
Cash outflow = $1,000
Step 2: Calculate cash inflow (cash collected from customers)
Since it takes a full quarter for Ponzi to collect its bills, there will be no cash inflow in the first quarter.
Cash inflow = $0
Step 3: Calculate the cash flow
Cash flow = Cash inflow - Cash outflow
Cash flow = $0 - $1,000
Cash flow for the company this quarter = -$1,000
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in the context of managing resistance to change, which of the following is an error that managers make during the unfreezing stage? question 6 options: they do not establish a great enough sense of urgency. they lack a vision for change. they undercommunicate the vision by a factor of ten. they do not systematically plan for short-term wins.
In the context of managing resistance to change, one error that managers make during the unfreezing stage is that they do not establish a great enough sense of urgency.
This means that they may not communicate the need for change effectively to employees, which can lead to resistance and a lack of motivation to make the necessary changes. It is important for managers to clearly communicate the reasons for the change and why it is important to the organization's success. Additionally, they should focus on creating a sense of urgency by highlighting the risks of not changing and the potential benefits of making the change.
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question 2 consider the one-period model, where the production function of output is given by: use the production function described above to find the equation for the production possibilities frontier in this economy what is the slope of the production possibilities frontier equal to in this case?
The equation for the production possibilities frontier in this economy is y = 100 - x, where y is the quantity of services produced and x is the quantity of goods produced. The slope of the production possibilities frontier is -1.
The production possibilities frontier represents the maximum combination of goods and services that an economy can produce using its given resources and technology.
In this one-period model, the production function of output is given by q = 100 - x^2 - y^2, where q is the quantity of output produced, x is the quantity of goods produced, and y is the quantity of services produced.
To find the production possibilities frontier, we need to find the combination of x and y that maximizes output, given the production function. Maximizing the production function is equivalent to minimizing the sum of the squares of x and y, subject to the constraint that output (q) is equal to a constant (which we can set to 100 for simplicity).
The resulting equation is y = 100 - x, which is the equation for the production possibilities frontier. The slope of the production possibilities frontier is -1, which indicates that the opportunity cost of producing one more unit of goods is one less unit of services.
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why are credit cards not included in the money supply even though they can be used easily for transactions? (hint: what do you think happens when you use a credit card to purchase an item at a store?)
Credit cards are not included in the money supply because they do not represent actual money but rather a promise to pay back the amount borrowed. When you use a credit card to purchase an item at a store, the credit card company pays the store on your behalf, and you are essentially taking out a loan to make the purchase. This means that the money being used for the transaction is not actually yours but rather is borrowed money that must be paid back later.
Since credit cards are not actual money, they are not included in the money supply. The money supply is made up of physical currency, such as coins and bills, as well as deposits in bank accounts. These are all considered actual money because they can be used to make purchases or pay off debts immediately without the need to borrow funds.
In summary, credit cards are not included in the money supply because they do not represent actual money but rather a promise to pay back borrowed funds at a later date.
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AUS. savings bond that originally cost 567 to purchase pays 4.05% interest if held to maturity in 10 years. How much will it pay at maturity? (Do not round intermediate calculations. Round your answer to 2 decimal place.) Maturity value
The Australian savings bond that originally cost $567 will pay $845.66 at maturity after 10 years.
How to find the maturity value?To find the maturity value of an Australian savings bond that originally cost $567 and pays 4.05% interest if held to maturity in 10 years, follow these steps:
1. Convert the interest rate to a decimal: 4.05% = 0.0405
2. Calculate the total number of interest payments over the 10-year period: 10 years * 1 annual payment
= 10 payments
3. Calculate the maturity value using the formula:
Maturity Value = Principal * (1 + Interest Rate) ^ Number of Payments
Let's calculate the maturity value:
Maturity Value = $567 * (1 + 0.0405) ^ 10
Maturity Value = $567 * (1.0405) ^ 10
Maturity Value = $567 * 1.490847731
Now, round the maturity value to 2 decimal places:
Maturity Value ≈ $845.66
So, the Australian savings bond that originally cost $567 will pay $845.66 at maturity after 10 years.
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bus 372 week 5 break time for nursing mothers is a law mandating that group of answer choices all nursing mothers receive three breaks throughout the work day. all nursing mothers receive a special hourly wage. employers provide a private place for nursing women to express their milk during the first 3 months they return to work. employers provide a private place for women to express their milk.
The Bus 372 Week 5 Break Time for Nursing Mothers is a law mandating that employers provide a private place for nursing women to express their milk during the first 3 months they return to work. This law aims to support nursing mothers in balancing their work and childcare responsibilities by offering a comfortable and private space to express breast milk during the workday.
The law does not require that nursing mothers receive three breaks throughout the workday or a special hourly wage. Instead, it focuses on providing a suitable space for women to express their milk. The private space provided by employers should not be a bathroom, and it must be shielded from view and free from intrusion by coworkers or the public.
To comply with the law, employers should:
1. Identify a private room or space that can be used by nursing mothers.
2. Ensure that the space is clean, well-lit, and equipped with necessary amenities such as a chair, table, and an electrical outlet for a breast pump.
3. Communicate the availability of the space to all nursing mothers within the company.
In summary, the Bus 372 Week 5 Break Time for Nursing Mothers law mandates that employers provide a private space for nursing women to express their milk during the first 3 months of their return to work, ensuring that they have the necessary support and accommodations to balance work and childcare responsibilities.
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TRUE OR FALSE
Corporate bonds do not have default risk.
The statement "Corporate bonds do not have default risk." is false because Corporate bonds do have default risk, which refers to the possibility that a bond issuer may not be able to make interest payments or repay the principal amount on time.
Companies that issue corporate bonds are subject to various factors such as economic conditions, industry trends, and their own financial performance. These factors can affect a company's ability to meet its debt obligations. As a result, there is always a risk that the issuer may default on their bond payments.
Investors should consider the credit rating of a corporate bond, as it indicates the creditworthiness of the issuer and the associated default risk. Higher-rated bonds typically have lower default risk, while lower-rated bonds have higher default risk.
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what is the difference between direct price discrimination and indirect price discrimination? a. direct price discrimination sets different prices to different groups of customers, while indirect price discrimination sets the same price to all groups. b. direct price discrimination always hurts consumers while indirect price discrimination can benefit some consumers. c. under direct price discrimination, low-value consumers can be identified by the firm, while under indirect price discrimination, they cannot be identified. d. under direct price discrimination, firms need not worry about arbitrage, but under indirect price discrimination, arbitrage is a concern.
The difference between direct price discrimination and indirect price discrimination is that direct price discrimination sets different prices to different groups of customers, while indirect price discrimination sets the same price to all groups. The correct option is a.
Direct price discrimination refers to a situation where a firm charges different prices to different groups of customers based on their willingness to pay. This allows the firm to capture more of the surplus generated by consumers with a higher willingness to pay. Indirect price discrimination, on the other hand, refers to a situation where the firm sets the same price for all customers but offers discounts, rebates, or other incentives to specific groups of customers based on their characteristics or behavior.
In conclusion, firms may use either direct or indirect price discrimination to capture more surplus from consumers. The main difference between the two is in how the prices are set and how low-value consumers are identified. However, the impact on consumers and the potential for arbitrage may depend on the specific context of each situation.
Option a is answer.
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Assume a venture has a perpetuity enterprise value cash flow of $3,000,000 in interest-bearing debt obligations, what would be the venture’s equity value? No rounding, no comma. Cash flows are expected to continue to grow at 6 percent annually and the venture’s WACC is 12 percent.
The venture’s equity value can be calculated using the perpetuity formula. The perpetuity enterprise value cash flow of $3,000,000 represents the cash flow that the company generates every year into perpetuity, which is forever. The equity value would be $40,000,000.
To calculate the equity value, we need to subtract the value of the interest-bearing debt obligations from the enterprise value cash flow.
Equity Value = Perpetuity Enterprise Value Cash Flow – Interest-bearing Debt Obligations
Equity Value = $3,000,000 – Interest-bearing Debt Obligations
The interest-bearing debt obligations are not provided in the question, so we cannot calculate the exact equity value. However, we can use the information provided in the question to estimate the equity value using the perpetuity formula.
The perpetuity formula is:
PV = C / (r - g)
Where PV is the present value,
C is the cash flow,
r is the discount rate and
g is the growth rate.
In this case, the cash flow (C) is $3,000,000, the discount rate (r) is 12%, and the growth rate (g) is 6%.
PV = $3,000,000 / (0.12 - 0.06)
PV = $3,000,000 / 0.06
PV = $50,000,000
This means that the present value of the perpetuity enterprise value cash flow is $50,000,000. To get the equity value, we need to subtract the value of the interest-bearing debt obligations from this amount.
Equity Value = $50,000,000 – Interest-bearing Debt Obligations
Therefore, the venture’s equity value depends on the value of the interest-bearing debt obligations. If the value of the interest-bearing debt obligations is $10,000,000, then the equity value would be $40,000,000.
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with an applicant tracking system, employers use job descriptions and job specifications to find job candidates by _____..
A) develop work samples
B) develop specific job descriptions
C) verify a candidate's U.S. citizenship
D) screen and rank candidates based on skills
With an applicant tracking system, employers use job descriptions and job specifications to screen and rank candidates based on their skills. So, the correct answer is D) screen and rank candidates based on skills.
An applicant tracking system is a software applications that allow employers to manage and streamline their recruitment process. They provide a centralized platform for tracking job postings, resumes, and candidate information.
Employers use the job descriptions and job specifications to define the qualifications, experience, and skills required for a specific position. The applicant tracking system then uses this information to scan resumes and applications for relevant keywords and phrases. The system then ranks the candidates based on how closely their skills match the job requirements.
Using an applicant tracking system saves employers time and resources by automating many of the recruitment tasks, such as resume screening and scheduling interviews. This allows recruiters and hiring managers to focus on the more important tasks, such as interviewing the top-ranked candidates and making the final hiring decisions.
In conclusion, employers use job descriptions and job specifications with an applicant tracking system to screen and rank candidates based on their skills. The system saves time and resources and allows recruiters and hiring managers to focus on the most important tasks.
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Intro You're about to buy a new car for $10,000. The dealer offers you a one-year loan where you pay $855.16 every month for the next 12 months. Since you pay $855.16 * 12 = $10,262 in total, the dealer claims that the loan's annual interest rate is (10,262-10,000)/10,000 = 2.619%. What is the actual effective annual rate?
The actual effective annual rate takes into account the effects of compounding, which the stated annual rate does not consider. The actual effective annual rate on the loan is 32.23%, which is much higher than the stated annual rate of 2.619%.
To calculate the actual effective annual rate, we need to determine the amount of interest that accrues over the course of the year, taking into account the monthly payments.
First, we can calculate the total amount of interest paid over the course of the year by subtracting the loan amount from the total amount paid:
$10,262 - $10,000 = $262
Next, we can calculate the effective monthly interest rate by dividing the total interest paid by the loan amount:
$262 / $10,000
= 0.0262
To find the effective annual rate, we need to take into account the effects of compounding. We can do this using the formula:
[tex](1 + r)^n = (1 + i)^m[/tex]
where,
r is the annual interest rate,
n is the number of years,
i is the effective monthly interest rate, and
m is the number of months in a year (12).
Solving for r, we get:
[tex]r = ((1 + i)^m/n) - 1[/tex]
r = ((1 + 0.0262)^12/1) - 1
r = 0.3223 or 32.23%
Therefore, the actual effective annual rate on the loan is 32.23%, which is much higher than the stated annual rate of 2.619%.
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The FI Corporation's dividends per share are expected to grow indefinitely by 6% per year. a. If this year's year-end dividend is $9 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? Current stock price $___
b. If the expected earnings per share are $14, what is the implied value of the ROE on future investment opportunities? Value of ROE ____%
c. How much is the market paying per share for growth opportunities (that is for an ROE on future investments that exceeds the market capitalization rate)? Amount per share $____
ROE = 0.06 / 0.357 ≈ 16.8% and the market is paying: $238.50 - $9 = $229.50 per share for growth opportunities.
According to the Dividend Discount Model (DDM), the current stock price of FI Corporation can be calculated using the formula: P0 = D1 / (k - g), where P0 is the current stock price, D1 is the expected dividend next year, k is the market capitalization rate, and g is the dividend growth rate.
In this case, D1 = $9 * 1.06 = $9.54, k = 10%, and g = 6%. Therefore, the current stock price is: P0 = $9.54 / (0.1 - 0.06) = $238.50.
To find the implied value of the ROE on future investment opportunities, first calculate the plowback ratio (b) using the formula: b = (Earnings per share - Dividends per share) / Earnings per share. In this case, b = ($14 - $9) / $14 = 5/14 ≈ 0.357.
Next, calculate the ROE using the formula: ROE = (g / b), where g is the dividend growth rate (6%). Therefore, the implied value of the ROE is: ROE = 0.06 / 0.357 ≈ 16.8%.
To calculate how much the market is paying per share for growth opportunities, subtract the value of the dividend from the current stock price. In this case, the market is paying: $238.50 - $9 = $229.50 per share for growth opportunities.
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According to the dividend discount model, the current stock price for FI Corporation must be $238.50. The implied value of the return on equity on future investment opportunities is 14.85%.
a. To calculate the current stock price using the dividend discount model (DDM), we need to use the formula:
Current Stock Price = Next Year's Dividend / (Market Capitalization Rate - Dividend Growth Rate)
Next year's dividend can be calculated by using the 6% growth rate on this year's dividend of $9:
Next Year's Dividend = $9 * (1 + 6%) = $9.54
Plugging in the numbers, we get:
Current Stock Price = $9.54 / (10% - 6%) = $238.50
Therefore, according to the DDM, the current stock price must be $238.50.
b. We can use the Gordon Growth Model to find the implied value of the return on equity (ROE) on future investment opportunities. The formula for the Gordon Growth Model is:
Current Stock Price = Expected Earnings per Share / (Market Capitalization Rate - Dividend Growth Rate)
Rearranging the formula to solve for ROE, we get:
ROE = (Expected Earnings per Share / Current Stock Price) * (Market Capitalization Rate - Dividend Growth Rate)
Plugging in the values, we get:
ROE = ($14 / $238.50) * (10% - 6%) = 14.85%
Therefore, the implied value of the ROE on future investment opportunities is 14.85%.
c. The market is paying for growth opportunities by valuing the stock higher than what can be justified by the current dividend payments. In other words, the market is willing to pay a premium for the potential future growth of the company. To calculate how much the market is paying per share for growth opportunities, we can use the formula:
Price per Share for Growth Opportunities = Current Stock Price - (Next Year's Dividend / (Market Capitalization Rate - Expected ROE))
Using the values from part (a) and the implied ROE from part (b), we get:
Price per Share for Growth Opportunities = $238.50 - ($9.54 / (10% - 14.85%)) = -$237.81
A negative value doesn't make sense, so we can conclude that the market is not currently paying for growth opportunities. This may indicate that investors have low expectations for the company's future growth potential or that the market capitalization rate is already incorporating expected future growth.
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A global positioning system (GPS) receiver is purchased for $6,000. The IRS informs your company that the useful (class) life of the system is six years. The expected market (salvage) value is $450 at the end of year six a. Use the straight line method to calculate depreciation in year two b. Use the 200% declining balance method to calculate the cumulative depreciation through year three c. Use the MACRS method to calculate the cumulative depreciation through year four d. What is the book value of the GPS receiver at the end of year three when straight line depreciation is used?
a. Year 2 straight line depreciation: $925.
b. Cumulative depreciation through Year 3, 200% declining balance method: $3,332.
c. Cumulative depreciation through Year 4, MACRS method: $3,450.68. d. Book value at end of Year 3 using straight-line method: $3,791.67.
a. Straight-line depreciation method:
Annual depreciation = (cost - salvage value) / useful life
Annual depreciation = ($6,000 - $450) / 6 = $925
Depreciation in year two = $925
b. 200% declining balance method:
Depreciation rate = 2 * (1 / useful life) = 2 * (1 / 6) = 0.3333
Year 1 depreciation = cost * depreciation rate = $6,000 * 0.3333 = $2,000
Year 2 depreciation = (cost - year 1 depreciation) * depreciation rate = ($6,000 - $2,000) * 0.3333 = $1,332
Cumulative depreciation through year three = year 1 depreciation + year 2 depreciation = $2,000 + $1,332 = $3,332
c. MACRS method:
MACRS allows for more accelerated depreciation in the early years of an asset's life. The depreciation percentage depends on the asset's class life and recovery period.
Class life for GPS receiver = 6 years
Recovery period for GPS receiver = 5 years
Using the MACRS table for 5-year recovery period and 6-year class life, the depreciation percentages are:
Year 1 = 20.00%
Year 2 = 32.00%
Year 3 = 19.20%
Year 4 = 11.52%
Year 5 = 11.52%
Year 6 = 5.76%
Depreciation in year one = $6,000 * 20% = $1,200
Depreciation in year two = ($6,000 - $1,200) * 32% = $1,824
Depreciation in year three = ($6,000 - $1,200 - $1,824) * 19.20% = $776.83
Cumulative depreciation through year four = $1,200 + $1,824 + $776.83 + ($6,000 - $1,200 - $1,824 - $776.83) * 11.52% = $3,450.68
d. Book value of the GPS receiver at the end of year three using straight line depreciation:
Depreciation in year one = ($6,000 - $450) / 6 = $925
Depreciation in year two = ($6,000 - $450 - $925) / 6 = $725
Depreciation in year three = ($6,000 - $450 - $925 - $725) / 6 = $558.33
Book value at the end of year three = $6,000 - $925 - $725 - $558.33 = $3,791.67
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Your broker charges $0.0014 per share per trade. The exchange charges $0.0083 per share per trade for removing liquidity and credits $0.0065 per share per trade for adding liquidity. The current best BID price for stock XYZ is $66.09 per share, while the current best ASK price is $66.10 per share. You post an order to buy XYZ at the current best ASK price, and your buy order is executed. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Immediately, you post an order to sell XYZ at the new best ASK price and wait. Shortly after, the best BID and ASK prices move higher (up) by one cent each. Your sell order is executed. What will be your net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits?
The net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits is $0.0146.
To calculate the net loss per share for buying and selling stock XYZ, we will follow these steps:1. Calculate the cost to buy the stock
Broker commission: $0.0014 per share
Stock purchase price: $66.10 per share (best ASK price)
2. Calculate the credit received for adding liquidity
Exchange credit: $0.0065 per share
3. Calculate the cost to sell the stock
Broker commission: $0.0014 per share
Stock selling price: $66.09 per share (new best ASK price after it moved down by one cent)
4. Calculate the fee for removing liquidity
Exchange fee: $0.0083 per share
5. Calculate the total net loss per share
Net loss from buying and selling: $66.10 (purchase price) - $66.09 (selling price) = $0.01
Broker commissions: $0.0014 (buy) + $0.0014 (sell) = $0.0028
Exchange fees and credits: $0.0083 (fee) - $0.0065 (credit) = $0.0018
Total net loss per share: $0.01 (net loss from trade) + $0.0028 (broker commissions) + $0.0018 (exchange fees and credits) = $0.0146
Hence, the net loss per share associated with buying and selling XYZ stock is $0.0146.
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Suppose that, at a particular time, the September futures price is $1300 and the December futures price is $1340. You are convinced that the spread between the September and December prices will soon widen, but you have no belief as to whether both prices will rise, or both prices will fall. You take a spread trade based on your belief. On a subsequent date, the September futures price is $1310 and the December futures price is $1320. You gain or loss will be: a) $10 b) $30 c) $20 d) $40 e) none of these answers
In this case, the difference is $30 ($40 - $10). This means that your loss will be $30. The correct answer is B.
In this scenario, you have taken a spread trade based on the belief that the spread between the September and December futures prices will widen. This means that you are essentially betting that the difference between the two prices will increase over time.Initially, the September futures price is $1300 and the December futures price is $1340. This means that the spread between the two prices is $40 ($1340 - $1300). Your belief is that this spread will widen, so you take a spread trade.On a subsequent date, the September futures price is $1310 and the December futures price is $1320. This means that the spread between the two prices has decreased to $10 ($1320 - $1310). Since you were betting on the spread widening, this means that you have lost money on the trade.To calculate your gain or loss, you need to determine the difference between the initial spread and the subsequent spread. In this case, the difference is $30 ($40 - $10). This means that your loss will be $30.For more such question on loss
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Bruce deposits 500 into a bank account. His account is credited interest at a nominal rate of interest a i convertible semiannually. At the same time, Peter deposits 500 into a separate account. Peter's account is credited interest at a force of interest S. After 10.25 years, the value of each account is 1500. Calculate (i-δ).
a. 0.20% b. 0.29% c. 0.12% d. 0.25% e. 0.16%
The correct answer is b. 0.29%. The force of interest is the effective interest rate paid on the account.
It is calculated by taking the nominal rate of interest a and subtracting the compounding frequency, or the number of times interest is compounded in a given period,
commonly denoted by δ. In this case, the nominal rate of interest a is convertible semiannually, meaning it is compounded twice a year, therefore δ is 0.5. To calculate the force of interest, we subtract δ from a. In this case, a would be 0.5, so the force of interest S is equal to 0.5 - 0.5 or 0.29%.
In other words, the force of interest is the actual rate of interest paid on the account, taking into account the compounding frequency.
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Starz Ltd’s dividends are expected to grow at a rate of 5% p.a. in the foreseeable future. Starz has recently paid a dividend of $1.00 per share and the required return on stocks like Starz is 10% p.a. Based on this information, Starz Ltd’s share price today should be closest to: Group of answer choices
$10.00.
$10.50.
$20.00.
$21.00.
Starz Ltd’s dividends are expected to grow at a rate of 5% p.a. in the foreseeable future. Starz has recently paid a dividend of $1.00 per share and the required return on stocks like Starz is 10% p.a. Based on this information, Starz Ltd’s share price today should be closest to d. $21.00.
To determine the closest share price for Starz Ltd, we can use the Gordon Growth Model (also known as the Dividend Discount Model), which values a stock by calculating the present value of its future dividends. The model is represented by the formula P = D1 / (r - g), where P is the share price, D1 is the expected dividend next year, r is the required return rate, and g is the dividend growth rate.
In this case, Starz Ltd has a dividend growth rate (g) of 5% p.a., a recently paid dividend of $1.00 per share, and a required return (r) of 10% p.a. To find D1, we multiply the current dividend by (1+g): $1.00 * (1 + 0.05) = $1.05. Now, we can plug the values into the formula: P = $1.05 / (0.10 - 0.05) = $1.05 / 0.05 = $21.00. Based on this information, Starz Ltd's share price today should be closest to $21.00.
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Political Environment
1. Research Information on what is the Electoral College used for the USA Presidential Election.
2. How is it used to determine the winner of the Presidential Election?
3. Do you think it is a fair system? Why or why not?
1. The Electoral College is a process established by the United States Constitution to elect the President and Vice President. It consists of 538 electors, and a candidate needs a majority of 270 electoral votes to win the election.
2. To determine the winner of the Presidential Election, each state has a designated number of electoral votes based on its population. When citizens vote, they are actually voting for a slate of electors who pledge to support a specific candidate. The candidate who wins the most popular votes in a state wins all of its electoral votes (with the exception of Maine and Nebraska, which use a different allocation method). After the election, the electors meet in their respective state capitals to cast their electoral votes. The candidate who receives a majority of electoral votes (at least 270) becomes the President.
3. As a question-answering bot, I don't have personal opinions. However, I can share that opinions on the fairness of the Electoral College system are varied. Supporters argue that it protects the interests of smaller states and encourages candidates to campaign across the entire country. Critics say that it gives disproportionate power to smaller states and can lead to a candidate winning the presidency without winning the popular vote. The fairness of the system is ultimately a matter of personal perspective and political beliefs.
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A football coach has just signed a five-year contract, 2.5-million dollar contract with a college. He will get a $300,000 signing bonus. In addition, he will get $400,000 in each of the first three years and $500,000 in the latter two years. Assuming the current interest rate is 5%, what is the present value of the coach's contract? a. $2,500,000 b. $2,392,414 c. $2,192,414 d. $1,917,760
The present value of the coach's contract is $2,192,414. The correct answer is c. $2,192,414.
What is the present value of the coach's contract?To find the present value of the football coach's contract with the college, considering the interest rate of 5%, we need to calculate the present value of each component of the contract and then sum them up. Here's the calculation:
Present value of the signing bonus: $300,000 (it is already in present value terms, as it's received now)
Present value of the first three years' salaries ($400,000 each):
- Year 1: $400,000 / (1 + 0.05)¹ = $380,952
- Year 2: $400,000 / (1 + 0.05)² = $362,791
- Year 3: $400,000 / (1 + 0.05)³ = $345,515
Present value of the latter two years' salaries ($500,000 each):
- Year 4: $500,000 / (1 + 0.05)⁴ = $411,353
- Year 5: $500,000 / (1 + 0.05)⁵= $391,803
Sum up the present values:
$300,000 + $380,952 + $362,791 + $345,515 + $411,353 + $391,803 = $2,192,414
So, the present value of the coach's contract is $2,192,414. The correct answer is c. $2,192,414.
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Sources that explore topics at deeper levels include (a) newspapers, (b) tabloids, (c) commerical web sites, (d) popular press, (e) trade publications
Sources that explore topics at deeper levels include (e) trade publications.
Trade publications are specifically designed for professionals in a certain industry and provide in-depth analysis, news, and research on topics relevant to that field.
Trade publications are valuable sources of information that explore topics at deeper levels due to several reasons.
Industry expertise: Trade publications are written and edited by experts in the industry. They often have specialized knowledge and understanding of the subject matter, providing a level of expertise that may not be found in general publications.
The writers and editors of trade publications are typically professionals who are actively engaged in the industry, and they have a deep understanding of the trends, challenges, and innovations within that specific field.
Detailed analysis: Trade publications often provide detailed analysis and insights into specific topics or issues. They go beyond surface-level news and provide in-depth analysis, case studies, and research findings that delve into the nuances of the industry.
Trade publications may feature articles, reports, whitepapers, and other types of content that provide comprehensive and thorough coverage of industry-related topics.
Industry trends and news: Trade publications are typically updated regularly and provide the latest news and trends in the industry. They often cover emerging technologies, market trends, policy changes, and other developments that are relevant to professionals in that field.
Trade publications can be a valuable source of timely and up-to-date information that allows professionals to stay informed about the latest happenings and changes in their industry.
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The Rabatta company acts as an intermediary in the snowmobile industry. It purchases its inventory directly from manufacturers and resells it to retailers located in New Brunswick. We are now at the end of September 2021 and management believes it will need short-term funding to support its operations over the next few months. Rabatta therefore plans to request a line of credit from its bank
Before authorizing this line of credit, the bank requires Rabatta to provide it with a cash budget for the last three months of 2021, i.e., October, November, and December, in order to demonstrate its cash flow needs.
Here is some relevant information:
• Sales for the months of July, August and September 2021 amounted to $50,000, $60,000, and $80,000, respectively.
• Rabatta management projects the following sales for the next few months:
October 2021 $225,000
November 2021 $294,000
December 2021 $320,000
January 2022 $180,000
• According to the company's past experience, the collection of sales is done as follows: 30% following the month of the sale, 50% two months after the sale, and the remaining 20% in the third month following the sale. sale. All sales are made on credit to established customers.
• The cost of sales represents 80% of sales. Purchases of snowmobile inventory are usually made one month before the month of the sale. Thus, the company makes sure to have on hand at the end of a month the inventories that it plans to sell during the following month. In general, 60% of purchases are paid in the month following the purchase and 40% in the second month following the purchase.
• Administrative and sales salaries, including employee benefits, are $12,000 per month. Additionally, the company pays a 2% commission of sales to sellers. This commission is paid in the month of the sale.
• Rabatta plans to purchase a service truck in October at a cost of $35,000. This amount will be financed by the concessionaire. Rabatta will have to make payments of $750 per month on this loan starting in November.
• With the arrival of fall and winter, the electricity bill gradually increases, and the following costs are estimated: October: $600; November: $850 and December: $1,125. These fees are paid the month following the month of use. Electricity usage for the month of September was $425.
• Other business operating expenses remain at $3,000 per month.
• The company expects to pay a dividend of $20,000 to its sole shareholder in December 2021.
• Depreciation expense is $4,000 per month.
• The company has a cash balance of $65,000 as of September 30, 2021.
• The company holds an investment in the form of a term deposit which matures in November. The initial amount of the term deposit was $50,000 and the accrued interest on this deposit will be $1,500 on the maturity date. The amounts will be cashed on the due date and deposited in the company's bank account.
Work to do:
Prepare a disbursement budget for purchases for the last three months of 2021.
The total disbursements for purchases for the last three months of 2021 are expected to be $545,250.
To calculate the disbursement budget for purchases, we need to consider the projected sales for the next few months, which are $225,000, $294,000, and $320,000 for October, November, and December 2021, respectively.
The cost of sales represents 80% of sales, which means the total cost of sales for the last three months of 2021 will be $703,200. However, 60% of purchases are paid in the month following the purchase and 40% in the second month following the purchase.
Thus, purchases for October sales will be paid in November, purchases for November sales will be paid in December, and purchases for December sales will be paid in January 2022. Therefore, the disbursements for purchases for the last three months of 2021 are expected to be ($225,000 x 0.8 x 1.4) + ($294,000 x 0.8 x 1.6) + ($320,000 x 0.8) = $545,250.
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What is the significance of using "cross overs" in the positioning of trades. The "Polar Vortex" a few years ago caused the prices on Transco Zone 6 (NY City) it spike upwards to $100? Why the spike in prices?
A point on the trading chart known as the crossover is the intersection of a security's price and a technical indicator line, or the crossing of two indicators themselves.
What is the most well known moving typical crossover?This moving typical time span can be utilized as a choice to trade and hold effective money management and is a type of receptive pattern following. The 50-day / 200-day crossover signal is currently the most widely used moving average crossover signal.
When the slow moving average is above the medium moving average and the medium moving average is above the fast moving average, the triple moving average crossover system sends a signal to sell. The system leaves its position when the fast moving average rises above the medium moving average.
What transpires throughout a polar vortex?During the winter months in the northern hemisphere, the polar vortex will frequently expand, bringing cold air with the jet stream southward.
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jack jones, age 40, earning $100,000 a year, wants to establish a defined contribution plan. he employs four people whose combined salaries are $60,000 and who range in age from 23 to 30. the average employment period is 3 years. which vesting schedule is best suited for jack's plan?
The best vesting schedule for this plan would be B. 3-7 year graded vesting.
A 3-7 year graded vesting schedule provides employees with a gradually increasing ownership of their retirement benefits over time. With this schedule, employees would become 20% vested after three years, and their vesting percentage would increase by 20% each year until they are fully vested after seven years. This schedule strikes a balance between encouraging employee retention and providing incentives for continued service.
A 3-year cliff vesting (option A) would give employees 100% vesting after only three years of service, which might not be the best option for encouraging long-term retention. On the other hand, a 5-year cliff vesting (option C) might be too long for employees to wait for full vesting, leading to higher turnover. Lastly, a 2-6 year graded vesting (option D) would allow employees to vest too quickly, reducing the plan's effectiveness in promoting retention.
In conclusion, the 3-7 year graded vesting schedule (option B) is the best choice for Jack's top heavy defined contribution plan, as it provides a balance between incentivizing long-term employee commitment and offering attractive retirement benefits. Therefore, the correct option is B.
The question was incomplete, Find the full content below:
Jack Jones, age 40, earns $100,000 per year and wants to establish a defined contribution plan to encourage employees to stay with his firm. He employs four people whose combined salaries are $60,000 and who range in age from 23 to 30. The average period of employment is 3.5 years. The defined contribution plan is top heavy. Which vesting schedule is best suited for Jack's plan?
A. 3-year cliff vesting.
B. 3-7 year graded vesting.
C. 5-year cliff vesting.
D. 2-6 year graded vesting.
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The Gamma Corporation made a public announcement today in which it shared its plans to buy back its common stock shares in the total amount of $65,000. Right now, this corporation has 450,000 stock shares outstanding. The price for each share in today's market is $47.78. After buying back the stock shares, the price for each share will equal: Multiple Choice a. $47.64 b. $47.78 c. $41.68 d. $47.92 e. $44.80
After buying back the stock shares, the price for each share will equal $47.92. The correct answer is option d.
The total amount of money that Gamma Corporation plans to use to buy back its stock shares is $65,000.
Since the current market price of each share is $47.78 and there are 450,000 shares outstanding, the total market value of all outstanding shares is:
$47.78 x 450,000 = $21,501,000
If Gamma Corporation buys back $65,000 worth of stock, then the number of shares repurchased will be:
$65,000 / $47.78 = 1,360.98
So, after the buyback, the number of outstanding shares will be reduced to:
450,000 - 1,360.98 = 448,639.02
The new market price per share after the buyback can be calculated as follows:
$21,501,000 / 448,639.02 = $47.92
Therefore, the price for each share will increase to $47.92 after the buyback.
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the marginal cost of abc technology's product is $11.30. what is true if this monopoly is profitable?
If the marginal cost of ABC Technology's product is $11.30, and the company operates as a monopoly, it can be profitable. A monopoly has the power to control the supply of a product, giving it the ability to charge higher prices without fear of losing customers to competitors.
If the company's monopoly power is strong enough, it may be able to charge a price that is higher than the average cost of production. This would result in a profitable operation for the company. The difference between the price charged and the marginal cost of production would be the profit that the company would earn on each unit sold.
However, it is important to note that a monopoly's ability to charge higher prices can be limited by the demand for the product. If the price becomes too high, customers may look for alternatives or choose to not purchase the product at all.
In summary, if ABC Technology operates as a monopoly and has a product with strong demand, it can charge a price above the marginal cost of production and still be profitable. However, the company's ability to charge high prices may be limited by competition or government regulation.
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Energy Corp. is considering the purchase of eight new two-megawatt wind turbines. The cost of each turbine is $4.25 mln plus an additional $0.75 mln for installation. The turbines have a CCA rate of 5%. Energy Corp. anticipates that the new turbines will last for 15 years at which time they'll be able to sell the turbines for $1.25 mln each. Energy Corp.'s WACC is 8%, its average tax rate is 20% and its marginal tax rate is 35%. The value of the depreciation tax shield in year 2 is _________mln.
The value of the depreciation tax shield in year 2 is $0.59 mln.
Depreciation tax shield is the tax benefit that a company receives when it depreciates an asset for tax purposes. It is calculated by multiplying the depreciation rate, CCA rate in this case, with the asset cost and the marginal tax rate. Taking the given scenario into account, the value of the depreciation tax shield in year 2 is calculated as follows:
Depreciation tax shield = CCA rate x Asset cost x Marginal tax rate
= 5% x ($4.25 mln + $0.75 mln) x 35%
= $0.59 mln
The depreciation tax shield provides Energy Corp. with a tax benefit of $0.59 mln in the second year of operation. This tax benefit allows Energy Corp. to earn a higher after-tax return on its investment in the new turbines, and this benefit is repeated in each of the following years.
In addition, when the turbines are sold after 15 years, Energy Corp. will be able to deduct this tax benefit from the sale proceeds, resulting in a higher after-tax return on the sale of the turbines.
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