The Dow Jones Industrial Average Index has an unusual weighting methodology . Unlike the S&P 500, it is weighted by share price. Here are 20 of the 30 members of the Dow Jones on March 20, 2019. If all the shares went up by 5%, which share on the screen shown would have the biggest contribution to an upward movement in the Index ?

Answers

Answer 1

Answer: Goldman Sachs

Explanation:

If all shares rose by 5% in the value, the biggest contributor to the S&P 500 's upward movement would be the one with the highest weight from the listed options.

From the options listed, Apple has a weight of 4.955 , General Electric is not listed, Exxon Mobil has a weight of 2.1417 and Goldman Sachs has a weight of  5.1177.

Goldman Sachs has the largest weight and so would contribute the most.

The Dow Jones Industrial Average Index Has An Unusual Weighting Methodology . Unlike The S&P 500,
The Dow Jones Industrial Average Index Has An Unusual Weighting Methodology . Unlike The S&P 500,

Related Questions

The cash flows have a present value of 0. Compute the value of n, assuming a 10% interest rate compounded annually?Year Cash Flow Amount 0 0 1 1 2 1 --- 1 n-2 1 n-1 1 n 1 n -35.95

Answers

Answer:

The value of n is 16

Explanation:

Note: Organized table is as attached

Present Worth of Cash-inflow = Present worth of Cash Outflow

$1 [(1+i)^n -1 / i(1+i)^N] = $35.95[1 / (1+i)^n]

$1 [ (1+0.10)^n - 1/ 0.10(1+0.10)^n] = $35.95[ 1 / (1+0.10)^n]

$1 [ (1.1)^n - 1 / 0.10(1.1)^n] = $35.95 [1/(1.1)^n]

Let (1.1)n be x

[x-1/x] = [$35.95 * 0.10 / $1] * [1/x]

[x-1/x] = 3.595[1/x]

x - 1 = 3.595

x = 3.595 + 1

x = 4.595

(1.1)^n = 4.595

Take log on both side

nlog (1.1) = log (4.595)

n(0.041392685) = 0.662285515

n = 0.662285515 / 0.041392685

n = 16.000062

n = 16

Thus, the value of n is 16

Gibson Company makes a product that sells for $33 per unit. The company pays $24 per unit for the variable costs of the product and incurs annual fixed costs of $84,600. Gibson expects to sell 21,600 units of product. Required Determine Gibson’s margin of safety expressed as a percentage.

Answers

Answer:

Margin of safety ratio= 0.5648= 56.48%

Explanation:

Giving the following information:

Selling price= $33

Unitary variable cost= $24

Fixed costs= $84,600

Units sold= 21,600

First, we need to calculate the break-even point in units:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 84,600 / (33 - 24)

Break-even point in units= 9,400 units

Now, the margin of safety:

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio= (21,600 - 9,400)/21,600

Margin of safety ratio= 0.5648= 56.48%

QUESTION 1 The country Grupindor recently experienced a drastic increase in inflation. This led to the depreciation in the value of its currency and affected trade and business drastically. In the context of the general environment, this scenario best illustrates the effect of the _____ on organizations. a. sociocultural aspect of the country b. political condition of the country c. technological changes in the country d. economy of the country

Answers

Answer:

Option d (economy of the country) is the appropriate answer.

Explanation:

Along with many other things, the economy of such a given country is regulated by its society, rules, history, as well as geography, and then it develops out of requirement. This example better shows the operational effects of the country's economy although inflation continues threatening the position due to certain external causes and leading to a decrease in present value.

Some other options offered aren't relevant to the situation described. For the aforementioned to be the right answer.

Maxene Raices discusses how Wilson Learning runs training with virtual teams, where team members may be spread out all over the globe. One way to teach in such a team would be ________, where online technologies and systems are used for training, including tools such as blogs, chat rooms, and 3-D simulations.

Answers

Answer:

e. Web 2.0 learning

Explanation:

Since in the question it is mentioned that for teaching a team what technology is required through which online teaching and the system that are used and involved various tools like chat rooms, 3-D simulations should be Web 2.0 learning as it depend on the online software where the user can learn to edit the document, storage of the content. In this, the virtual team is required than can gained from this method

Therefore the same is to be considered

Net cash flow from operating activities for 2021 Altoona Corporation was $300,000. The following items are reported on the financial statements for 2021: Depreciation and amortization $24,000 Cash dividends paid on common stock $10,000 Increase in accounts receivable $20,000 Based only on the information above, Altoona’s Net Income for 2021 was:

Answers

Answer:

Altoona’s Net Income for 2021 was:  $296,000

Explanation:

The Net Income can be determined by reconciling the Net cash flow from operating activities to Operating Profit as follows :

Net cash flow from operating activities    $300,000

Less Depreciation and amortization          ($24,000)

Add  Increase in accounts receivable        $20,000

Operating Profit                                          $296,000

Notes :

Reconcile the non-cash items previously added or deducted from Net cash flow from operating activities and any changes to Working Capital accounted for in determination of Net cash flow from operating activities .

Suppose the following information (in millions of dollars) is available for Limited Brands for a recent year: sales revenue $8,780, net income $153, preferred dividend $0, and weighted-average common shares outstanding 300 million. Compute the earnings per share for Limited Brands.

Answers

Answer:

$0.51 million

Explanation:

Earnings per share is calculated as ;

Net income - preferred dividends/ Weighted average common shares outstanding.

Given that;

Net income = $153 m

Preferred dividends = 0$

Weighted average common shares outstanding = $300 m

Therefore,

Earnings per share = $153 - $0 / $300

= $0.51 million

Wadding Corporation applies manufacturing overhead to products on the basis of standard machine-hours. For the most recent month, the company based its budget on 4,500 machine-hours. Budgeted and actual overhead costs for the month appear below: Original Budget Based on 4,500 Machine-Hours Actual Costs Variable overhead costs: Supplies $ 12,000 $ 12,730 Indirect labor 38,400 38,700 Fixed overhead costs: Supervision 20,600 20,240 Utilities 6,800 6,760 Factory depreciation 7,800 8,110 Total overhead cost $ 85,600 $ 86,540 The company actually worked 4,520 machine-hours during the month. The standard hours allowed for the actual output were 4,510 machine-hours for the month. What was the overall variable overhead efficiency variance for the month

Answers

Answer:

Variable overhead efficiency variance= $112 unfavorable

Explanation:

Giving the following information:

Estimated budget:

4,500 Machine-Hours

Supplies $ 12,000

Indirect labor 38,400

Total= $50,400

The company worked 4,520 machine-hours during the month.

The standard hours allowed for the actual output were 4,510 machine-hours for the month.

First, we need to calculate the predetermined variable overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 50,400/4,500

Predetermined manufacturing overhead rate= $11.2 per machine hour

Now, to calculate the variable overhead efficiency variance, we need to use the following formula:

Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate

Variable overhead efficiency variance= (4,510 - 4,520)*11.2

Variable overhead efficiency variance= $112 unfavorable

Shire Computer’s predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $728,000 of overhead costs and $560,000 of direct labor cost for the year. During March, Shire began and completed Job 13-56. 1. What is the predetermined overhead rate for the year? 2. Use the information on the following job cost sheet to determine the total cost of the job.

Answers

Answer:

Results are below.

Explanation:

We weren't provided with information regarding Job 13-56

To calculate the predetermined overhead rate, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 728,000 / 560,000

Predetermined manufacturing overhead rate= $1.3 per direct labor dollar

To allocate overhead, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Which one of the following statements are correct? I-The socialism system is the precursor to feudalism II- The invisible hand doctrine suggests that total economic surplus of society is maximized III- The government tax break given when buying an electric car is an example of indicative planning IV- A statement that involves priorities and value judgments is generally regarded as a normative statement

Answers

Answer: II, III, IV

Explanation:

Of the options, the correct statements are:

II- The invisible hand doctrine suggests that total economic surplus of society is maximized

III- The government tax break given when buying an electric car is an example of indicative planning

IV- A statement that involves priorities and value judgments is generally regarded as a normative statement.

The invisible hand simply has to do with the unseen forces that have an impact and control the free market economy. It should also be noted that the socialism system is not the precursor to feudalism.

On November 1, 2021, New Morning Bakery signed a $207,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2022? (Do not round your intermediate calculations.)
a) $208,035.
b) $212,175.
c) $207,000.
d) $213,210.

Answers

The right answer is B 212,175.

A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 21,200 units of output each month. However, it has an absolute maximum output capability of 26,000 units per month, and can produce as little as 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 14,360 units in October, what is the capacity utilization rate in October for this factory

Answers

Answer:

Capacity utilization rate in October for this factory is 67.74%

Explanation:

Units produced in October = 14,360 units

Units production in most efficient way =  21,200 units

Capacity utilization rate in October = 14,360 / 21,200

Capacity utilization rate in October = 0.677359

Capacity utilization rate in October = 67.74%.

What is the difference between C2C and B2C e-commerce?

Answers

Answer:

C2C means consumer to consumer transactions while B2C is a business to consumer transaction and represents a transaction between a business and consumers.

Explanation:

In Business, e-commerce can be defined as a business model which involves the buying and selling of goods or products over the internet.

Generally, e-commerce comprises of four (4) business models and these are;

1. Business to Business (B2B).

2. Business to Consumer (B2C).

3. Business to Government (B2G).

4. Consumer to Consumer (C2C).

The difference between a C2C and a B2C is given below;

C2C is an acronym for consumer to consumer in e-commerce and it is a business model that involves the trading of goods specifically between consumers. This simply means that, in C2C both the buyer and seller is a consumer.

On the other hand, a B2C is a business model which means business to consumer and it is typically a market which involves businesses selling their goods and services directly to the end consumers for their personal use.

Tasty Ice Cream is a year-round take-out ice cream restaurant that is considering offering an additional product, hot chocolate. Considering the additional machine it would need plus cups and ingredients, it estimates fixed costs to be $204 per year and the variable cost to be $0.26. If it charges $1.01 for each hot chocolate, how many hot chocolates does it need to sell in order to break even

Answers

Answer: 272 hot chocolates

Explanation:

Assume the quantity sold is x.

Fixed cost = $204

Variable cost = $0.26x

Sales = $1.01x

Breakeven point is where profits are $0.

1.01x - 0.26x - 204 = 0

0.75x -204 = 0

0.75x = 204

x = 272 hot chocolates

An inexperienced accountant for Blue Spruce Corp. showed the following in the income statement: income before income taxes $436,000 and unrealized gain on available-for-sale securities (before taxes) $85,500. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 32% tax rate. Prepare a correct statement of comprehensive income.

Answers

Answer:

                       Blue Spruce Corp.

      Statement of Comprehensive Income

Income before income taxes                 $436,000  

Less: Income Tax                                   $139,520

($436,000 * 32%)

Net Income                                              $296,480

Other comprehensive income (loss):

Unrealized gain on available-for-sale     $58,140

securities, net of tax ($85500*68%)  

Total Comprehensive Income                $354,620

Which of the following is applicable to the Nasdaq PHLX?a. Regional exchange operated by NASDAQb. Offers trading in equity securities and options contractc. Is a completely electronic exchange with no physical trading floord. Regional exchange operated by FINRA for the execution of OTC stock only

Answers

Answer: a. Regional exchange operated by NASDAQ

b. Offers trading in equity securities and options contract.

Explanation:

Out of the options given, the correct answers are a and b. The options that are applicable to Nasdaq PHLX are:

Regional exchange operated by NASDAQ

b. Offers trading in equity securities and options contract.

It should be noted that the PHLX is simply a regional exchange which is being monitored and managed by NASDAQ. Furthermore, the equity securities and options contract are being traded on floor and electronically.

The primary objective of financial reporting is to provide information:___________.
a. About a firm’s management teamb. Useful to capital providersc. Concerning the changes in financial position resulting from he income-producing efforts of the entityd. About a firm’s financial and investing activities

Answers

Answer:

b. Useful to capital providers.

Explanation:

Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.

The objective of financial reporting include all of the following to provide information that:

1. Is useful to those making investment decisions. This information would help creditors to determine whether they should lend to a client or not; or assist investors in deciding whether they should invest in a business or not.

2. Is useful to those lending out money to business entities. When investors and creditors are well furnished with financial information about an organization, they would be able to assess the amounts of cash, timing, and uncertainty of cash flows from dividends or interest.

3. Is useful to creditors in making decisions about providing resources to business entities.

Hence, the primary objective of financial reporting is to provide information useful to capital providers.

Additionally, financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.

Bloomington Brewery produces beer and ale. Beer sells for $5 per barrel, and ale sells for $2 per barrel. Producing a barrel of beer requires 5 lb of corn and 2 lb of hops. Producing a barrel of ale requires 2 lb of corn and 1 lb of hops. 60 lb of corn and 25 lb of hops are available. Formulate an LP that can be used to maximize revenue. Solve the LP graphically.

Answers

Answer:

The answer is below

Explanation:

Let x represent the amount of beer sold and y represent the amount of ale sold. The revenue of selling x barrels of beer is 5x and selling y barrels of ale is 2y hence the total revenue = 5x + 2y. If z represent the maximum revenue then:

z = 5x + 2y

Since 60 lb of corn is available and beer requires 5 lb of corn while ale require 2 lb of corn hence:

5x + 2y ≤ 60

Also, 25 lb of hops is available and beer requires 2 lb of hops while ale require 1 lb of hops hence:

2x + y ≤ 25

Also x > 0 and y > 0

The LP is:

z = 5x + 2y

5x + 2y ≤ 60

2x + y ≤ 25

x > 0 and y > 0

Using geogebra graphing, the maximum revenue is at (0, 30)

Hence:

z = 5x + 2y = 5(0) + 2(30) = 60

The maximum revenue is 60

Stephan is the plaintiff in a negligence action against Viola. The jury determines that Stephan has suffered $250,000 in damages, but that he is 20% responsible for his own injuries. Under comparative negligence, how much money would Viola have to pay Stephan in damages? What if the jury determines that Stephan is 60% responsible? Explain the different results under pure and mixed comparative negligence rules.

Answers

Answer:

a. Under comparative negligence, the amount Viola have to pay Stephan in damages is $200,000.

b(i). Under pure comparative negligence, the amount Viola have to pay Stephan in damages is $100,000.

b(ii). Under mixed comparative negligence, the amount Viola have to pay Stephan in damages can be $100,000 or $0.

Explanation:

a. The jury determines that Stephan has suffered $250,000 in damages, but that he is 20% responsible for his own injuries. Under comparative negligence, how much money would Viola have to pay Stephan in damages?

Under a comparative negligence, the amount of damages that the plaintiff will receive is reduced to the percentage of fault of the defendant.

Based on this, the amount Viola have to pay Stephan in damages is 80% (i.e. 100% - 20%) of $250,000. Therefore, we have:

Amount Viola have to pay Stephan in damages = 80% * $250,000 = $200,000

b. What if the jury determines that Stephan is 60% responsible? Explain the different results under pure and mixed comparative negligence rules.

b(i) Pure Comparative Negligence is a rule that gives the plaintiff the opportunity to recover damages that is exactly equal to the percentage of fault of the defendant whether or not the fault of the plaintiff is greater than the fault of the defendant.

Under pure comparative negligence rule, the amount Viola have to pay Stephan in damages is therefore 40% (i.e. 100% - 40%) of $250,000. Therefore, we have:

Amount Viola have to pay Stephan in damages under pure comparative negligence rule = 40% * $250,000 = $100,000

b(ii) Mixed Comparative Negligence is a rule under which the plaintiff may receive only a percentage of damages of the defendant, or none at all if the percentage of fault of the plaintiff is 50% or more than 50% of the total fault.

Thereforem, if it is determined that the amount Viola have to pay Stephan in damages is exactly equal to the percentage of fault of the defendant,  the amount Viola have to pay Stephan in damages is therefore 40% (i.e. 100% - 40%) of $250,000. Therefore, we have:

Amount Viola have to pay Stephan in damages under pure comparative negligence rule = 40% * $250,000 = $100,000.

However, it it determined the plaintiff should be paid not damages,  Viola have to pay Stephan $0 amoun in damages.

Therefore, under mixed comparative negligence, the amount Viola have to pay Stephan in damages can be $100,000 or $0.

Indicate the effect of each transaction during the month of October 20Y8 and the balances for the accounting equation after all transactions have been recorded. No beginning balances exist in the accounts. An accounting equation has been provided. Opened a business bank account for Jones, Inc., with an initial deposit of $45,000 in exchange for common stock. Paid rent on the office building for the month, $2,000. Received cash for fees earned of $5,000. Purchased equipment, $7,000. Borrowed $20,000 by issuing a note payable. Paid salaries for the month, $1,000. Received cash for fees earned of $8,000. Paid dividends, $3,000. Paid interest on the note, $100.

Answers

Answer:

For better visualization, the answer is presented in a table

[tex]\left[\begin{array}{ccccc}&Assets&=&Liabilities +&Equity\\1&45,000&=&&45,000\\2&-2,000&=&&-2,000\\Bal.&43,000&=&0&43,000\\3&5,000&=&&5,000\\Bal.&48,000&=&0&48,000\\4&&=&&\\Bal.&48,000&=&0&48,000\\5&20,000&=&20,000&\\Bal.&68,000&=&20,000&48,000\\6&-1,000&=&&-1,000\\Bal.&67,000&=&20,000&47,000\\7&8,000&=&&8,000\\Bal.&75,000&=&20,000&55,000\\8&-3,000&=&&-3,000\\Bal.&72,000&=&20,000&52,000\\9&-100&=&&-100\\Bal.&71,900&=&20,000&51,900\\\end{array}\right][/tex]

Procedure details described below:

Explanation:

Opened a business bank account for Jones, Inc., with an initial deposit of $45,000 in exchange for common stock.

The cash is an asset for the company And Jones Is the Owner thus, asset and equity increase by 45,000

Paid rent on the office building for the month, $2,000.

The rent is an expense is an incurred cost to continue the operations of the business It decreases the equity and asset (cash used to pay the rent)

Received cash for fees earned of $5,000.

The fees are revenue from the business operations this is a realized gain, therefore, increases equity. Also, Assets increase as cash is an asset.

Purchased equipment, $7,000.

There is no change in the quantities but, the composition of the asset did change. Cash decrease while equipment increase.

Borrowed $20,000 by issuing a note payable.

The note payable is a future obligation to pay. It is a liability for the company assumed in exchange for an asset (cash)

Paid salaries for the month, $1,000.

Like rent, this is an incurred cost(expense) It decreases Equity also, assets as we use cash to pay it.

Received cash for fees earned of $8,000.

Exactly like the previous time, a realized gain generates an increase in equity and assets.

Paid dividends, $3,000.

The dividends are paid to the company's owners thus, the cash leaves the company into the owner's pocket. Both, assets and equity decrease (as there are fewer assets available for the owners to take)

Paid interest on the note, $100.

The interest also is an incurred cost thus, like salaries and rent expense we decrease equity and assets.

Accountant's define and understand Receivables:
A) To include accounts receivables, notes receivables and other receivables.
B) To be claims from individuals and companies that are expected to be collected in cash.
C) To be shown on the balance sheet valued at its cash net realizable value.
D) A and B only.
E) All of the above represent characteristics of receivables.

Answers

Answer:

The answer is E.

Explanation:

Account Receivables is the type of account that is used to record expected money from the sale of goods on credit. Account receivables is an asset to the company because future economic benefits are expected to flow to the entity. It includes all forms of receivables.

Accounts receivables is being measured at cash net realizable value.

Answer:

A) To include accounts receivables, notes receivables and other receivables.

B) To be claims from individuals and companies that are expected to be collected in cash.

C) To be shown on the balance sheet valued at its cash net realizable value.

Explanation:

Recievables are payments that are yet to be collected from customers for goods and services purchased on credit.

They can be in the form of accounts receivables, notes receivables and other receivables.

On the balance sheet receivables are represented as claims from individuals and companies that are expected to be collected in cash.

When customers eventually repay what they owe the receivables reduces on the company's books.

Receivables that cannot be recovered are recorded in allowance for doubtful accounts

Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package

Answers

The answers is 16 and yeah Yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah yeah

Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to:

Answers

Answer:

Predetermined OH rate is $37.09

Explanation:

Firstly, we need to get the value for predetermined Fixed OH rate.

Predetermined Fixed OH rate = Estimated Fixed overhead / Estimated machine hours

= $2,347,090 / 79,000

= $29.71 per machine hour

Predetermined OH rate = Predetermined Fixed OH rate + Predetermined Variable OH rate

= $29.71 + $7.38

= $37.09

Therefore, the predetermined OH rate is $37.09

PLEASE HELP ME ASAP.

Suppose you put $150 in the bank 1 year ago. A sign at the bank reads 2% simple annual interest. Fill in the values to complete the table.

Answers

Answer:

1 a year

Explanation:

The principal amount is $150Time is 1 yearThe simple annual Interest rate is 2%Therefore, according to the formula  A=P(1+rt)Amount= 153Interest= Amount-Principle = 153-150= 3

What is simple interest?

The calculation of a loan's interest rate can be done quickly and simply using simple interest. The daily rate of interest, the principle, and the number of days between payments are multiplied to determine simple interest.

To calculate simple interest, multiply the daily rate of interest by the principle and the number of days between payments. Consumers who pay their loans off on time or ahead of schedule each month benefit from simple interest.

Although some mortgages employ this calculation approach, this kind of interest typically relates to auto loans or short-term loans.

Learn more about simple interests, from:

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Sexual Violence Awareness (Campus SaVE Act):
Final Assessment
QUESTION 3 OF 15
Which is NOT a strategy for defusing potentially harmful
situations?
1
distract
2
direct
3
deactivate
4.
delegate

Answers

Answer: distract

Explanation:

Distraction is not a strategy for defusing potentially harmful situations. Option (a) is correct.

What do you mean by Strategy?

Strategy is a plan for achieving a long-term or overall goal.

Hollaback's "5 D's" (Direct, Distract, Delay, Delegate, Document) are different methods that bystanders can use to support someone who is being harassed, emphasize that harassment is not okay, and demonstrate to people in your life that they too have the power to make our communities and workplaces safer.

It teaches students, faculty, and staff how to intervene by employing the three Ds: Direct, Distract, and Delegate. The three D's provide strategies for intervening in potentially dangerous situations.

Therefore, Option (a) is correct.

Learn more about Strategy, here;

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As winner of a breakfast cereal competition, you can choose one of the following prizes: a. $180,000 at the end of five years. b. $11,400 a year forever. c. $19,000 for each of 10 years. d. $6,500 next year and increasing thereafter by 5% a year forever. Assume that discount rate is 12%. i. (20 pts) Write down the discounted cash flow equation for each option. ii. (10 pts) Decide which prize you should choose and why?

Answers

Answer:

i. Discounted cashflow equations.

a.  $180,000 at the end of five years.

This is a lump sum present value/ discounted cashflow which can be calculated as;

Formula = 180,000 / ( 1 + r)^n

= 180,000/ ( 1 + 12%)^5

= $102,136.83

b. $11,400 a year forever

This is a perpetuity. The present value/ discounted cashflow of a perpetuity is calculated as;

Formula = Amount/rate

= 11,400/12%

= $95,000

c. $19,000 for each of 10 years.

This is an annuity. The formula for calculating the Present value/ discounted cashflow of an annuity is;

[tex]Formula = Annuity * [\frac{( 1 - (1 + i)^{-n} )}{i} ][/tex] where i is interest rate and n is number of periods

[tex]= 19,000 * [\frac{( 1 - (1 + 0.12)^{-10} )}{0.12} ][/tex]

= $107,354.24

d. $6,500 next year and increasing thereafter by 5% a year forever.

This is a growing perpetuity. The present value/ discounted cashflow formula is;

= Amount / ( discount rate - growth rate)

= 6,500 / ( 12% - 5%)

= $92,857.14

ii. Choose $19,000 for each of 10 years as it has the highest present value.

In 2019, Jose paid the following amounts for his son to attend Big State University: Tuition $15,000 Room and board 10,500 Books 1,500 A car to use at school 6,150 Student football tickets 315 Spending money 4,640 How much of the above is a qualified higher education expense for purposes of his Qualified Tuition Program

Answers

Answer:

$27,000

Explanation:

Calculation for how much of the above is a qualified higher education expense for purposes of his Qualified Tuition Program

Using this formula

Qualified higher education expense=Tution+Room and Board+and Books

Where,

Tuition= $15,000

Room and board= $10,500

Books= $1,500

Let plug in the formula

Qualified higher education expense=$15,000+$10,500+$1500

Qualified higher education expense=$27,000

Therefore how much of the above that is a qualified higher education expense for purposes of his Qualified Tuition Program will be $27,000.

The statement of cash flows cannot help address questions such as: Select one: a. How is the increase in investments financed? b. What is the source of cash for new plant assets? c. How much cash is generated from or used in operations? d. How much of the company's revenues have been retained as profit? e. Why is cash flow from operations different from income?

Answers

Answer: d. How much of the company's revenues have been retained as profit?

Explanation:

The cash flow statement is chiefly concerned with how much actual cash the company has received vs how much that it has spent and it finds this out placing cash transactions under three sections being the Operating, Investing and Financing activities.

The cashflow statement cannot help answer questions such as how much of revenue will be retained as profit because the profit sometimes is not all cash. The statement that will tell how much is retained as profit will be the Income Statement.

Springfield mogul Montgomery Burns, age 80, wants to retire at age 100 so he can steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $500 million at the beginning of each year for 10 years from a special off-shore account that will pay 18% annually. In order to fund his retirement, Mr. Burns will make 20 equal end-of-the-year deposits in this same special account that will pay 18% annually. How large of an annual deposit must be made to fund Mr. Burns retirement plans

Answers

Answer:

Springfield mogul, Montgomery Burns

How large of an annual deposit must be made to fund Mr. Burns retirement plans:

= $94,644,751.67

Explanation:

a) Data and Calculations:

Age of Mr. Burns now = 80 years

Retirement age = 100 years

Annual withdrawal at the beginning of each year for 10 years = $500 million

Special offshore account pays interest = 18% annually

Investment for funding retirement:

Deposits = 20 equal end-of-the year deposits in the same special offshore account above.

b) Calculation of Future value of annual deposit after 20 years:

FV (Future Value) $13,877,572,093.01

PV (Present Value) $2,651,510,914.01

N (Number of Periods) 10.000

I/Y (Interest Rate) 18.000%

PMT (Periodic Payment) $500,000,000.00

Starting Investment $0.00

Total Principal $5,000,000,000.00

Total Interest $8,877,572,093.01

c) Calculation of Annual Deposit to reach the future value target of $13,833,567,810.87:

FV (Future Value) $13,877,567,810.87

PV (Present Value) $506,609,362.98

N (Number of Periods) 20.000

I/Y (Interest Rate) 18.000%

PMT (Periodic Payment) $94,644,751.67

Starting Investment $0.00

Total Principal $1,892,895,033.42

Total Interest $11,984,672,777.45

d) Mr. Burns will need to contribute $94,644,751.67 at the end of each period to reach the future value of $13,877,572,093.01.  Both the future value of deposits of $13,877,567,810.87  and the annual periodic payment of $94,644,751.67  are determined using online financial calculator.

Which of the following theorems explains the relationship between interest rates and bond prices? For a given change in interest rates, the prices of higher-coupon bonds will change more drastically than the prices of lower-coupon bonds. For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds. Bond prices are directly related to interest rate movements. For a given change in interest rates, the prices of short-term bonds will change more drastically than the prices of long-term bonds.

Answers

Answer:

For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds.

Explanation:

A bond can be defined as a fixed income instrument that firms use as a source of longer-term funding or loans.

The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.

In Economics, bonds could either be issued at discount or premium.

Hence, a bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance. Also, a bond that is being issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.

Generally, bond price is inversely proportional to its interest rate, thus, when interest rates are high, bond prices would be low and when interest rates are low, bond prices are high.

The theorem that best explains the relationship between interest rates and bond prices is that for a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds because long-term bondholders are liable to higher rate of interest rate risks than the short-term bondholders.

Which of the following would most likely shift the production possibilities curve inward? an increase in the number of hours factories are in use a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time an increase in the production of capital goods technological progress

Answers

Answer: a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time.

Explanation:

The production possibilities curve (PPC) is simply a graph that shows every different combinations of output that an economy can produce while using its resources and technology.

An inward shift of the PPC means that there's reduction in the production level. The option that'll most likely shift the production possibilities curve inward us when there's a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time.

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