Answer:
The NPV = $1578.185602 rounded off to $1578.19
As the NPV is positive, the project should be accepted.
Explanation:
The Net Present Value or NPV is a tool used to evaluate projects. It is used with various other tools to decide whether to undertake a project or not. To calculate the Net Present Value or NPV, we take the present value of the cash inflows provided by the project and deduct the initial cost of the project. If the NPV is positive, we should proceed with the project and vice versa.
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial Cost
Where,
CF1, CF2, ... represents cash flow in Year 1, Year 2 and so on. r is the required rate of return
NPV = 3200 / (1+0.17) + 3200 (1+0.17)^2 + 3200 (1+0.17)^3 +
3200 (1+0.17)^4 + 5700 (1+0.17)^5 - 9800
NPV = $1578.185602 rounded off to $1578.19
what role do individuals play in a capitalist system?
Answer:
Explanation:
INCAPITALIST SYSTEM ,INDIVIDUALS ARE KEY BECAUSE THE GOVERMENT DOES NOT CONTROL ECONOMY .ALL ECONOMIC DECISIONS AND ACTIONS ARE CONTROLLED.......
Sheffield Company had an investment which cost $250000 and had a salvage value at the end of its useful life of zero. If Mussina's expected annual net income is $5000, the annual rate of return is:
Answer: 4%
Explanation:
From the question, we are informed that Sheffield Company had an investment which cost $250000 and had a salvage value at the end of its useful life of zero and that Mussina's expected annual net income is $5000.
It should be noted that the annual rate of return is calculated as the average Income divided by the average investment. Here, the average Income is $5,000 while the average investment will be ($250,000/2) = $125,000.
Therefore, annual rate of return will be:
= $5000/$125,000
= 4%
The general ledger of the Fly-Buy-Nite (FBN) Engineering Company contained the following account balances. Construct an income statement. What is the net income before taxes and the net profit (or loss) after taxes? Amount($1,000s)Administrative expenses 2,750Sub-contracted services 15,000 Development expenses 900Interest expense 200Sales revenue 35,000 Selling expenses 4,500
Answer:
Fly-Buy-Nite (FBN) Engineering Company
Income Statement
Sales revenue 35,000
Less Expenses :
Administrative expenses 2,750
Sub-contracted services 15,000
Development expenses 900
Interest expense 200
Selling expenses 4,500 (23,350)
Net Income 11,650
Net Income before taxes is $11,650
Explanation:
The Income Statement shows operating results that is Profit or Loss resulting from trading operations of the company. Profit or Loss = Sales less Expenses.
The structure that organizations most commonly adopt to solve the control problems that result from producing many different kinds of products in many different locations for many different types of customers is the divisional structure.
a. True
b. False
Answer:
a. True
Explanation:
There are two commonly used organization structures by firms. The first one is known as the Functional Organization Structure. The other one is known as the Divisionalized Organisation Structure.
Functional Organization Structure - Activities of a similar type within the company are placed under the control of the appropriate department head. Examples of Functions are Production, Marketing and Finance.
Divisionalized Organisation Structure - Organisations are split up into divisions in accordance with products that are made. These divisions are separate Investment and Cost Centers and decision making is decentralized.
Given $100,000 to invest, construct a value-weighted portfolio of the four stocks listed below.
Stock Price/Share ($) Number of Shares Outstanding (millions)
Golden Seas 14 1.43
Jacobs and Jacobs 24 1.44
MAG 43 29.52
PDJB 9 11.48
Required:
Write down the the portfolio weight.
Answer:
Given $100,000 to invest using a value-weighted method, the weights will be decided based on market share. The individual stocks will be weighted based on their proportion of the total market value.
Total Market value for all the shares
= ($14 * 1,430,000) + ( 24 * 1,440,000) + (43 * 29,520,000) + ( 9 * 11,480,000)
= 20,020,000 + 34,560,000 + 1,269,360,000 + 103,320,000
= $1,427,260,000
Golden Seas Weight
= (14 * 1,430,000) / 1,427,260,000
= 1.40%
Jacobs and Jacobs
= ( 24 * 1,440,000) / 1,427,260,000
= 2.42%
MAG
= (43 * 29,520,000) / 1,427,260,000
= 88.9%
PDJB
= ( 9 * 11,480,000) / 1,427,260,000
= 7.24%
What does the income statement reflect?
A) The cash that has flowed in and out of the company over an accounting period.
B) Revenues minus expenses over an accounting period.
C) Both of the above.
D) None of the above.
Answer: B) Revenues minus expenses over an accounting period.
Explanation:
The Income statement lets the business know how much profit it made from its operations during the year.
It lists the revenue that was earned and then deducts all expenses that were incurred from that revenue including taxes and interest payment and then presents the net income/loss.
The first option refers to the Cashflow statement.
How much can a Municipal Finance Professional (MFP) contribute to the "clean up" campaign to pay off campaign debt of an ex-issuer official that is now out of office because she lost the general election
Answer:
An unlimited amount
Explanation:
According to the Political contribution rule, Municipal Finance Professionals cannot make contribution of more than $250 to an elected official's campaign.
However in this case the ex-issuer official lost the general election and is not able to influence municipal securities of the MFP.
So they can contribute any amount to the clean up campaign since the official is out of office.
The Political contribution rule was instituted to prevent office holder from manipulating MFP securities in exchange for large contributions.
When Deer Valley Resort Co. (DVRC) was developing its ski resort in the Wasatch Mountains near Park City, Utah, it sold parcels of land in the resort village to third parties. Each sales contract reserved the right of approval over the conduct of certain businesses on the property including ski rentals. For fifteen years, DVRC permitted Christy Sports, LLC, to rent skis in competition with DVRC's ski rental outlet. When DVRC opened a new mid-mountain ski-rental outlet, it revoked Christy's permission to rent skis. This meant that most skiers who flew into Salt Lake City and shuttled to Deer Valley had few choices: they could carry their ski equipment with them on their flights, take a shuttle into Park City and look for cheaper ski rentals there, or rent from DVRC. Christy filed a suit in a federal district court against DVRC. Was DVRC's action an attempt to monopolize in violation of Section 2 of the Sherman Act
Answer:
No it wasn't a violation of Section 2 of the Sherman Act.
Explanation:
This is an actual court case which was ruled in favor of DVRC. The court used an analogy to compare DVRC with Disneyland, where the theme park owners would not allow competition within their premises. Even though DVRC sold the land parcel to Christy Sports, a restrictive covenant was imposed at the time of the sale where DVRC could decide freely which third party businesses could operate there. Since the covenant is legal, there is no reason why DVRC will not enforce it.
You will receive $225 a month for the next eight years from an insurance settlement. The interest rate is 7% compounded monthly for the first three years and 9% compounded semi-annually (quarterly) for the final five years. What is this settlement worth to you today?
Answer:
$16,014.64
Explanation:
first we have to determine the present value of the last five years:
effective interest for last 5 years = (1 + 9%/4)⁴ - 1 = 1.093 - 1 = 9.31%
9.31% / 12 = 0.7757%
present value = $225 x 47.82377 (PV annuity factor, 0.7757%, 60 periods) = $10,760.35
now, present value = $10,760.35 / (1 + effective interest)³
effective interest first 3 years = (1 + 7%/12)¹² - 1 = 1.0723 - 1 = 7.23%
present value = $10,760.35 / (1 + 7.23%)³ = $8,727.25
now we need to determine the present value of the first 3 years:
present value = $225 x 32.38838 (PV annuity factor, 2.25%, 36 periods) = $7,287.39
total value of the annuity = $16,014.64
You and your firm need to develop policies that avoid acquisitions and restructuring. Select one: True False
Answer:
True
Explanation:
If polices are not developed that avoid acquisitions and restructuring, this results in hostile takeover of the company by other investors or decline of earning per share of the investors. So its important to develop such polices.
In 2007, interest rates were about 4.5% and inflation was about 2.8%. What was the real interest rate in 2007
Answer: 1.7%
Explanation:
The real interest rate is the interest rate in an economy after being adjusted for inflation.
Real Interest = Interest - Inflation
= 4.5% - 2.8%
= 1.7%
Suppose during 2020due to relief in Taxation Marginal Propensity to Consume (MPC) will increase from 0.65 to 0.75then calculate Tax multiplier (KT).
Answer:
[tex]K_T = -3[/tex]
Explanation:
Given
[tex]MPC_1 = 0.65[/tex]
[tex]MPC_2 = 0.75[/tex]
Required
Determine the Tax Multiplier (KT)
KT is calculated as follows;
[tex]K_T = \frac{-MPC}{1 - MPC}[/tex]
Substitute 0.75 for MPC because MPC has changed from 0.65 to 0.75
[tex]K_T = -\frac{0.75}{1 - 0.75}[/tex]
Evaluate the denominator
[tex]K_T = -\frac{0.75}{0.25}[/tex]
Divide fractions
[tex]K_T = -3[/tex]
Hence, the tax multiplier is -3
A company is considering an iron ore extraction project that requires an initial investment of and will yield annual cash inflows of for years. The company's discount rate is 9%. Calculate IRR.
Answer: D. 15%
Explanation:
The IRR is the discount rate that will make the Net Present Value to be 0.
In other words, the IRR is the discount rate that will make the cash inflow from the investment to be equal to the investment amount.
As the cashflow is constant, it is an annuity and so can be calculated by the Present Value Interest Factor.
Investment cost = $1,100,000
Using the options given;
Discount rate - 14%
Present Value of Cash inflow = 676,507 * Present Value of Annuity factor, 14%, 2 years
= 676,507 * 1.647
= $1,114,207.029
1,114,207.029 ≠ 1,100,000
Discount rate - 15%
Present Value of Cash inflow = 676,507 * Present Value of Annuity factor, 15%, 2 years
= 676,507 * 1.626
= $1,100,000.382
= $1,100,000
IRR is 15% as Present value of Cash inflow is equal to Investment cost at a discount rate of 15%.
Which of these are good ways to find a buyer’s agent?
a. Ask an attorney
b. Referrals
c. Ask a broker
d. Search online
e. Interview agents
it's e interview agents
Next year Baldwin plans to include an additional performance bonus of 0.25% in its compensation plan. This incentive will be provided in addition to the annual raise, if productivity goals are reached. Assuming the goals are reached, how much will Baldwin pay its employees per hour? Select: 1Save Answer $29.63 $28.15 $31.04 $28.22
Answer:
$29.63
Explanation:
Calculation for how much will Baldwin pay its employees per hour
First step is to find the Total raise percentage
Total raise = 5% + 0.25%
Total raise = 5.25%
Since the present wages is given as $28.15 Second step is to calculate how much will Baldwin pay its employees per hour
Amount Baldwin will pay = $28.15× (1+0525)
Amount Baldwin will pay = $28.15× (1.0525)
Amount Baldwin will pay = $29.63
Therefore how much will Baldwin pay its employees per hour will be $29.63
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to:
Answer:
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to rise and the equilibrium quantity to stay the same.
Explanation:
Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.
Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.
The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.
The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.
This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to rise and the equilibrium quantity to stay the same.
XYZ Corp owns a 3-year $10 million par floating rate bond. The coupons on the bond are 12-month LIBOR. XYZ would like to hedge against interest rates falling by entering into an interest rate swap with a $10 million notional that receives a fixed rate and pays a floating rate (12-month LIBOR). You are given the following prices for zero coupon bonds. Years to Maturity Zero-coupon Bond Price 1 0.99 2 0.97 3 0.93 Calculate the fixed rate XYZ Corp would receive on the swap.
Answer:
2.45%
Explanation:
The computation of the fixed rate is shown below:
Years to maturity Zero coupon bond price YTM Forward rate
1 0.99 1.01%
2 0.97 1.53% 2.06%
3 0.93 2.45% 4.30%
The fixed rate should be equivalent to the YTM of the 3 year bond i.e. 2.45% the same is to be considered
If a company has a cost of capital of 12%, their minimum rate of return (hurdle rate) is expected to be
Question:
Q1 If a company has a cost of capital of 12%, their minimum rate of return (hurdle rate) is expected to be?
a. 11%
b. 11.9%
c. 12%
d. Greater than 12%
Answer:
Option C is correct
Minimum rate of return= 12%
Explanation:
The cost of capital is the minimum rate of rate of return that investors are expected to receive for their investment for it to be acceptable.
It is the opportunity cost of capital which the investors which investors would have earned on alternative investment opportunities.
The minimum rate of return encompasses the following factors; inflation, risk involved in the investment, prevailing interest rate
The minimum rate of return should be equal to or greater that the cost. Therefore the minimum rate of return = 12%
Minimum rate of return= 12%
Would a macroeconomist be interested in how individual consumers respond to an increase in taxes on gasoline?
Ford and General Motors are considering expanding into the Vietnamese automobile market. Devise a simple prisoners' dilemma game to demonstrate the strategic considerations that are relevant to this decision.
Explanation:
To look at it from a prisoner's escape dilemma, let's look at Ford and General motors as been about out of their status quo and to break into a new market–the Venezuelan market.
They should should see themselves as been worse off if they did not make the move. Also, they need weigh the benefits of expanding. After such considerations, both car companies should work towards expanding regardless of whether or not the other is expanding.
Aloan Co. provides the following sales forecast for the next three months:Sales units: January: 3,000 February: 4,200 March: 5,000The compnay wants to end each month with the ending finished goods invetory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units. The budgeted production units for February are?
Answer:
The budgeted production units for February are 4,400.
Explanation:
Prepare a Production Budget for February as follows :
units
Budgeted Sales 4,200
Add Budgeted Closing Stock (5,000 × 10%) 500
Total Production Needed 4,700
Less Budgeted Opening Stock (3,000 × 10%) (300)
Budgeted Production 4,400
Business incubators support fledgling start-ups and are often used to pursue specific entrepreneurial ventures developed by
Answer: new venture groups
Explanation:
Business incubators support fledgling start-ups and are often used to pursue specific entrepreneurial ventures that are developed by the new venture groups.
It should be noted that incubators provide functions such as businesses services, funding, mentoring, physical space, and networking.
A venture capital firm are investors who gain income by engaging in risky projects after taking funds from wealthy people.
(Consider This) According to economist Abba Lerner (1903-1982), fiscal and monetary policy is analogous to
Answer:
a steering wheel in an automobile.
Explanation:
Abba Lerner a twentieth-century economist, is widely known for his suggestion of the utilization of fiscal policy and monetary policy as a form of Keynesian economics. In his analysis, he declared that fiscal and monetary policy is analogous to a steering wheel in an automobile.
Hence, the correct answer to the question is "a steering wheel in an automobile."
Determine the formula, then enter the amounts to calculate the equivalent units of production for direct materials and conversion costs
Answer:
Direct materials cost per equivalent unit=$0.75
Conversion cost per equivalent unit=$0.55
Explanation:
Computation of the cost per equivalent unit of production for direct materials.
Using this formula
Direct materials cost per equivalent unit = Direct materials costs /Equivalent units of materials
Let plug in the formula
Direct materials cost per equivalent unit = $48,750/65,000
Direct materials cost per equivalent uni=$0.75
Computation of the cost per equivalent unit of production for conversion costs.
Using this formula
Conversion cost per equivalent unit =Conversion costs/Equivalent units of conversion costs
Let plug in the formula
Conversion cost per equivalent unit = $24,750/45,000
Conversion cost per equivalent unit=$0.55
Therefore the Direct materials cost per equivalent unit will be $0.75 while
Conversion cost per equivalent unit will be $0.55
In order to sell restricted stock under the provisions of Rule 144, the stock must be:________
I think Options were omitted, which are
I. fully paid
II. either properly margined or fully paid
III. held for at least 6 months
IV. held for at least 1 year
Answer:I. fully paid
, III. held for at least 6 months
Explanation: Rule 144 enforced by the U.S. Securities and Exchange Commission (SEC) regulates the conditions securities (stock ) whether restricted, unregistered or controlled can be allowed for sale or resale
The conditions include
--That adequate public information about a company should be made known to investors
--That 1% of outstanding shares can be sold every thee months by an seller especially as an affiliate of a company
--The firm is cannot solicit buy orders or permitted to receive commissions in excess of their normal rates.
----A seller must file the 144 "Notice of Sale" with the SEC at or before the placement of the sell order
Above all the holding period of 6 months which starts from when the holder or buyer has fully paid for securities and this applies mainly to restricted securities.
g As the economy moves toward equilibrium expenditure, an unplanned ______ in inventories leads firms to ______ production.
Answer:
1. decrease
2. increase
Explanation:
Economy equilibrium is a term often used in economics to describe a situation in a given economy, in which the total sum of expenditures is the same or equals to the total sum of supplies or production level in that particular economy.
Hence, as the economy moves toward equilibrium expenditure, an unplanned DECREASE in inventories leads firms to INCREASE production.
A bond that pays interest annually yields a rate of return of 9.25 percent. The inflation rate for the same period is 4 percent. What is the real rate of return on this bond?
Answer: 5%
Explanation:
From the question, we are informed that a bond that pays interest annually yields a rate of return of 9.25 percent and that the inflation rate for the same period is 4 percent.
The real rate of return on this bond will be calculated as:
= (1+nominal rate)/(1+inflation rate) - 1
= (1 + 9.25%)/(1 + 4%) - 1
= (1 + 0.0925)/(1 + 0.04) - 1
= (1.0925/1.04) - 1
= 1.05 - 1
= 0.05
= 5%
Which of the following would cause a "Prior Period Adjustment" to be reported on the 2025 Statement of Retained Earnings?
A. Failure to Accrue Revenue at 12/31/24, but not 12/31/21 Depreciation Overstatement.
B. 12/31/21 Depreciation Overstatement, but not Failure to Accrue Revenue at 12/31/24.
C. Both Failure to Accrue Revenue at 12/31/24 and 12/31/21 Depreciation Overstatement.
D. Neither Failure to Accrue Revenue at 12/31/24 nor 12/31/21.
Answer:
Cause of a "Prior Period Adjustment in 2025 Statement of Retained Earnings:"
A. Failure to Accrue Revenue at 12/31/24, but not 12/31/21 Depreciation Overstatement.
Explanation:
A company's failure to accrue revenue in accordance with the accrual concept and revenue recognition principle means that there is a "Prior Period Error" which must be corrected retrospectively in the financial statements (Retained Earnings). Retrospective restatement involves the correction of the error arising from the recognition, measurement, and disclosure of amounts of elements of financial statements. The restatement is done as if a prior period error had never occurred.
What is the current yield on a zero coupon bond with a remaining life of 4 years, a yield to maturity of 10.8%, and a par value of $1000
Answer:
$663.5
Explanation:
given that
number of years remaining = 4 years
yield to maturity ratio = 10.8% = 1.108
Par value = $1000
Current yield takes a look at the current price of a bond, instead of looking at it from a face value. That being said, it can be calculated mathematically as
Current yield = 1000 / 1.108^4
Current yield = 1000 / 1.507
Current yield = $663.5
Therefore, the current yield from the question we are given, is found to be $663.5.
I hope that helps
You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $1,044. These bonds make annual payments and mature 13 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 6 percent. The bonds have a par value of $1,000.Required:If the inflation rate was 3.4 percent over the past year, what was your total real return on investment?
Answer:
17.4%
Explanation:
original purchase price 1 year ago = $1,044
current market price:
0.06 = {80 + [(1,000 - MV)/13]} / [(1,000 + MV)/2]
0.06 x [(1,000 + MV)/2] = 80 + [(1,000 - MV)/13]
0.06 x (500 + 0.5MV) = 80 + 76.92 - 0.0769MV
30 + 0.03MV = 156.92 - 0.0769MV
0.1069MV = 126.92
MV = 126.92 / 0.1069 = $1,187.28
total returns during the year = $80 (coupon) + ($1,187.28 - $1,044) = $223.28
nominal return on investment = $223.28 / $1,044 = 21.387%
real return on investment = [(1 + i) / (1 + inflation)] - 1 = [(1 + 0.21387) / (1 + 0.034)] - 1 = 1.174 - 1 = 0.174 = 17.4%