Answer:
Impact on Aggregate Demand Curve
a. The price level will increase and aggregate demand will fall because of the decreased wealth of everyone.
b. The aggregate demand will rise because of the investment by government which increases spending in the economy.
c. The aggregate demand will rise as local production will be substituted for the decreased imports.
d. The aggregate demand will fall since a significant increase in interest rates reduces savings,investment, and demand for goods and services.
Explanation:
The Aggregate Demand curve for Country X is the graphical representation of the relationship between Aggregate Demand and the general price level in Country X. It is a depiction of the effect of consumption spending by individuals and businesses, governmental spending, investments, and spending on exports minus imports. The curve shifts to the right to signal that Country X has increased its total demand for goods and services and to the left to signal a fall in the demand for goods and services.
The graphical representation of the relationship between Aggregate Demand and the price level in Country X is the Aggregate Demand curve for Country X.
It demonstrates the effects of individual and commercial consumption expenditure, government expenditure, investment opportunities, and spending on net exports.
The curve swings to the right to indicate that Country X's overall demand for goods and services has increased, and to the left to indicate that demand has decreased.
The Impact of the following context on the Aggregate Demand Curve is:
a. Because everyone's wealth is falling, the price level will increase and aggregate demand will fall.
b. Government investment will increase spending in the economy, causing aggregate levels to rise.
c. As local output takes the place of lower imports, the aggregate market is growing.
d. A significant increase in interest rates affects savings, investment, and demand for goods and services, resulting in a reduction in aggregate demand.
To know more about the impact of different situations on the aggregate demand curve, refer to the link below:
https://brainly.com/question/17127679
Choice Creations, Inc. sells hand sewn shirts at $ 44.00 per shirt. It incurs monthly fixed costs of $ 6 comma 000. The contribution margin ratio is calculated to be 30%. What is the variable cost per shirt? (Round any intermediate calculations and your final answer to two decimal places.)
Answer:
$30.80
Explanation:
According to the situation, the solution is as follows:
The variable cost per shirt is
Since the selling price per shirt is $44
And, the contribution margin ratio is 30%
So, the variable cost margin ratio is 70%
Now the variable cost per shirt is
= Selling price per shirt × variable cost margin ratio
= $44 × 70%
= $30.80
Hence, the variable cost per shirt is $30.80
Under the Uniform Securities Act, all of the following must be disclosed in an investment advisory contract EXCEPT A) other states in which the adviser is registered B) a provision prohibiting the adviser from being compensated based on a share of capital gains C) the manner in which the advisory fee will be computed D) a provision prohibiting the adviser from assigning the contract without client consent
Answer: A) other states in which the adviser is registered
Explanation:
The Uniform Securities Act was put in place in order to deal with fraud involving securities at state level and to also help the Securities and Exchange Commission in the regulation and enforcement.
Based on the options provided in the question, under the Uniform Securities Act, all of the following must be disclosed in an investment advisory contract except other states in which the adviser is registered.
A company has the following transactions during the year related to stockholders’ equity.
February 1 Issues 5,000 shares of no-par common stock for $15 per share.
May 15 Issues 500 shares of $10 par value, 7.5% preferred stock for $12 per share.
October 1 Declares a cash dividend of $0.75 per share to all stockholders of record (both common and preferred) on October 15.
October 15 Date of record.
October 31 Pays the cash dividend declared on October 1.
Required:
Record each of these transactions.( omit account numbers and descriptions)
Date Discription Debit Credit
Answer:
Journal entries are given below
Explanation:
February 1
(Issues 5,000 shares of no-par common stock for $15 per share)
DEBIT CREDIT
Cash(5000 x $15) $75,000
Common stock $75,000
May 15
(Issues 500 shares of $10 par value, 7.5% preferred stock for $12 per share)
DEBIT CREDIT
Cash (500x$12) $6,000
Preferred stock (500x$10) $5,000
Additional paid in capital $1,000
October 1
Declares a cash dividend of $0.75 per share
DEBIT CREDIT
Retained Earnings (5500x$0.75) $4,125
Dividend Payable $4,125
October 15 Date of Record
No Entry Required
October 31 Pays the cash dividend
DEBIT CREDIT
Dividend Payable $4,125
Cash $4,125
A perfectly competitive firm sells 15 units of output at the going market price of $10. Suppose its average fixed cost is $15 and its average variable cost is $8. Its contribution margin (i.e., contribution to fixed cost) is
Answer:
$30
Explanation:
The computation of the contribution margin is shown below:
Contribution margin = Sales - Variable cost
where,
Sales = Units sold × Market price
= 15 units × $10
= $150
And,
Variable cost = Units sold × AVC
= 15 units × $8
= $120
Now placing these values to the above formula
= $150 - $120
= $30
We simply applied the above formula
A suplier who requires payment with in 10 days, should be most concerned with which one of the following ratios when granting credit?
a. Current Cash
b. Debt-equity
c. Quick
Answer: E) Cash
Explanation:
The Supplier should be most concerned with the Cash Ratio when granting credit. The Cash Ratio measures the amount of Cash in addition to the amount of Cash equivalent assets that the company has against it's current Liabilities in other to see if the company can be able to pay off it's Current Liabilities with it's current Cash and Cash Equivalents.
The Supplier will therefore be concerned with this ratio to see if the company is indeed able to pay back within 10 days before they can be able to grant credit.
The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,116 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.04 each. The following cost information is provided
Direct Materials per unit $6.34
Direct Labor per unit $7.30
Variable Factory Overhead per unit $2.50
Fixed Factory Overhead per unit $7.50
How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves?
Answer:
If the company buys the part, it will save $$6,559.6
Explanation:
Giving the following information:
Purchase price= $13.04
The company uses 2,116 units of this part annually.
Production:
Direct Materials per unit $6.34
Direct Labor per unit $7.30
Variable Factory Overhead per unit $2.50
We weren't provided with information regarding the fixed costs. I will assume that non of the fixed overhead costs are avoidable, therefore, they are irrelevant to the decision making process.
Buy:
Total cost= 2,116*13.04= $27,592.64
Production:
Total cost= 2,116*(6.34 + 7.3 + 2.5)= $34,152.24
If the company buys the part, it will save $$6,559.6
In the case when the company buys the part, it will save $6,559.6.
Calculation of the value of part:Since
Purchase price= $13.04
Direct Materials per unit $6.34
Direct Labor per unit $7.30
Variable Factory Overhead per unit $2.50
Now
For Buy:
Total cost= 2,116*13.04= $27,592.64
For Production:
Total cost= 2,116*(6.34 + 7.3 + 2.5)= $34,152.24
So, we can say that In the case when the company buys the part, it will save $6,559.6.
Learn more about material here: https://brainly.com/question/24555844
he Heinz and Kraft merger Group of answer choices may be allowed by the FAA may be allowed by the NEA may be allowed by the NRA may be allowed by the FTC
Answer:
Heinz and Kraft Merger:
may be allowed by the FTC.
Explanation:
The FTC is the Federal Trade Commission. It is the federal government agency charged with the responsibility of ensuring fair market practices, creating, and enforcing rules to guide businesses with respect to advertising, marketing, consumer credit, antitrust, and other fair practises.
The FTC was created by the FTC Act of 1914 and prevents antitrust agreements and develops rules for achieving a vibrant and fair marketplace, where consumers and businesses understand their rights and obligations in the marketplace.
The Heinz and Kraft merger was concluded successfully in 2015 enabling the two companies to become known as the Kraft Heinz Company and one of the largest food and beverage companies in the world.
Students arrive at the Administrative Services Office at an average of one every 15 minutes, and their requests take on average 10 minutes to be processed. The service counter is staffed by only one clerk, Judy Gumshoes, who works eight hours per day. Assume Poisson arrivals and exponential service times.
Required:
a. What percentage of time is Judy idle?
b. How much time, on average, does a student spend waiting in line?
c. How long is the (waiting) line on average?
d. What is the probability that an arriving student (just before entering the Administrative Services Office) will find at least one other student waiting in line?
Simone founded her company using $200,000 of her own money, issuing herself 200,000 shares of stock. An angel investor bought an additional 100,000 shares for $150,000. She now sells another 500,000 shares of stock to a venture capitalist for $1.5 million. What is the post-money valuation of the company
Answer:
2,400,000
Explanation:
The computation of post-money valuation of the company is shown below:-
post-money valuation of the company is
= Total shares outstanding × Price per share
= (200,000 + 100,000 + 500,000) × (1,500,000 ÷ 500,000)
= 800,000 × 3
= 2,400,000
Therefore we have applied the above formula by considering all the elements given in the question
Draw a curve that shows the relationship between the tax rate and the amount of tax revenue collected. The relationship between the tax rate and the amount of tax revenue collected is called the ______ curve. This curve shows that ______.
Answer:
Laffer curve.
Explanation:
Laffer Curve is developed by
Arthur Laffer. It is used to show the relationship between tax rates and the amount of tax revenue collected by governments of a particular country. Laffer curve is used to demonstrate Laffer’s argument that sometimes cutting tax rates can increase total tax revenue.
Laffer curve shows the relationship that occurs between the tax rate and the amount of tax revenue collected
The relationship between the tax rate and the amount of tax revenue collected is called the LAFFER CURVE curve. This curve shows that TAX CUT CAN INCREASE TAX REVENUE.
The drawing of a laffer curve has been attached
"The following per unit cost information is available: direct materials $10, direct labor $4, variable manufacturing overhead $3, fixed manufacturing overhead $10, variable selling and administrative expenses $1, and fixed selling and administrative expenses $8. Using a 25% markup percentage on total per unit cost, compute the target selling price."
Answer:
The target selling price =$45
Explanation:
The target selling price is the sum of the total unit cost plus 25% of the the unit cost
The target selling price = Total per unit cost + (25% × total unit cost)
The total unit cost is the sum of all the costs involved making the product available to the consumer.
The sum of direct material cost , labour cost variable manufacturing, fixed manufacturing overhead, variable selling and administrative expenses and fixed selling and administrative expenses.
The target selling price would be determined using te steps below:
Step 1: Calculate the unit cost
Total unit cost = 10 + 4 + 3 + 10 + 1 + 8 = 36
Total unit cost = $36
Step 2: Calculate the target selling price
Target selling price = Unit cost + (25%× unit cost)
The target selling price = 36 + (25% × 36) = $45
The target selling price =$45
Estes Park, Inc., has declared a dividend of $6.70 per share. Suppose capital gains are not taxed, but dividends are taxed at 30 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $118 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be
Answer:
$113.31
Explanation:
Estees park has declared a dividend of $6.70 per share
The dividend is taxed at 30%
= 30/100
= 0.3
The company stock sells for $118 per share
The first step is to calculate the after tax dividend
After tax dividend= 6.70(1-0.3)
= 6.70×0.7
= $4.69
Therefore, the ex-dividend price can be calculated as follows
Ex-dividend price= $118-$4.69
= $113.31
Hence the ex-dividend price is $113.31
Life Savers Gummies Fruit Splosions, liquid-filled gummies combined with a burst of real fruit juice, are a new product for The Wrigley Co. Before marketing the product nationwide, Wrigley gave out samples of the candy at several rock concerts and then recorded consumers' feelings about the candy, its taste, and its name. In which stage of the new-product development process would this have happened
Answer: D. Test marketing
Explanation:
Test Marketing is a stage in the New Product Development process where the product is tested in the real world or the Field Laboratory as it is otherwise known. Here the consumers are given a sample of the products and their responses are recorded without them knowing they are part of a test making their reactions as genuine as can be.
This stage helps the company more accurately ascertain how the new product will fare in the real world thereby giving them a chance to fix whatever needs fixing.
She figures out that her fixed costs will be $7,500 and her unit variable costs are $2 per raft. She plans to rent all 2,500 rafts she has on hand. What is Rachel's breakeven price?
Answer:
selling price= $5
Explanation:
Giving the following information:
She figures out that her fixed costs will be $7,500 and her unit variable costs are $2 per raft. She plans to rent all 2,500 rafts she has on hand.
To calculate the break-even selling price, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
2,500= 7,500 / (selling price - 2)
2,500selling price - 5,000= 7,500
selling price= 12,500/2,500
selling price= $5
"A higher price level will increase the demand for money, but expectations of a rise in the price level will reduce the demand for money." Is this statement true or false according to the monetary approach? Why?"
Answer:
The statement is True
Explanation:
A higher price level is a term that describes an economic condition in which more money is required to purchase a given amount of goods and services, at a given period, tland this leads to inflation overtime.
However, with a higher expected price level, it implies that a decline in the real value of a constant nominal amount of money balances is expected. Thus, there is an high tendency among people to substitute away from holding money and toward holding non-liquid assets whose prices may rise with the in the foreseeable future.
Sinking fund bonds: A. Are bearer bonds. B. Are registered bonds. C. Require equal payments of both principal and interest over the life of the bond issue. D. Require the issuer to set aside assets at specified amounts to retire the bonds at maturity. E. Decline in value over time.
Answer:
The answer is D.
Explanation:
Sinking funds require the issuer(borrower) to set aside assets at specified amounts to retire the bonds at maturity. Sinking fund helps the issuer to secure a bond with lower yield.
An agreed amount is deposited at an agreed period (e.g yearly) so as to pay of the par value or principal value at maturity.
Once the U.S. government opened its domestic markets to international trade, the competition from imported cars, steel, and other products caused demand for similar U.S. goods to
Answer: b. fall, leading to lower output, fewer workers, and an overall decline in union membership.
Explanation:
Once the US Government opened up its market to international trade, the competition from imported cars, steel, and other products caused demand for similar U.S. goods to fall. This happened because people started importing more goods from outside as they were cheaper than the goods produced in the US. Chinese steel for instance, did not have the same high labor input costs as US steel and so could be sold at cheaper levels.
As a result of less people demanding US products, the companies had to reduce output to reduce the losses they were making. This led them to let some of their workers go and as the people were no longer working, Unions lost members.
Total Variable Overhead Variance Mulliner Company showed the following information for the year:
Standard variable overhead rate (SVOR) per direct labor hour $3.50
Standard hours (SH) allowed per unit 3
Actual production in units 20,000
Actual variable overhead costs $220,500
Actual direct labor hours 61,200
Required:
1. Calculate the standard direct labor hours for actual production.
2. Calculate the applied variable overhead.
3. Calculate the total variable overhead variance.
Answer:
1. The standard direct labor hours for actual production
Standard hours per unit: 3 hours
Actual output: 20,000
Standard labour hours for actual production = 20,000 * 3
=60,000 hours
2. Applied variable Overhead
Standard hours allowed per unit = 3
Overhead rate per hour = $3.5
Standard Overhead rate per unit = Standard hours allowed per unit * OH rate per hour =3 hours * $3.5
=10.5
Actual output = 20000
Variable OH applied = Actual output * Standard Overhead rate per unit
= 20,000 * $10.5
= $210,000
3. Total Variable Overhead variance
Actual Oh incurred $220,500
Std variable Overhead to be allowed $210,000
Total Variable OH variance $10,500 (Unfavourable)
Exercise C The marketing department of Specialty Coffees estimates the following monthly demand for espresso in these four price-quantity relationships: Demand 1 9,000 cups at $1.00 per cup 2 8,000 cups at $1.25 per cup 3 6,000 cups at $1.50 per cup 4 4,000 cups at $1.75 per cup The fixed costs of $3,000 per month are not affected by the different price-volume alternatives. Variable costs are $0.25 per cup. What price should Specialty Coffees set for espresso
Answer:
It should price the espresso at $1.25
Explanation:
[tex]\left[\begin{array}{ccccc}&D1&D2&D3&D4\\$Sales Price&1&1.25&1.5&1.75\\$Variable Cost&0.25&0.25&0.25&0.25\\$Margin&0.75&1&1.25&1.5\\$Quantity&9,000&8,000&6,000&4,000\\$Contribution&6,750&8,000&7500&6,000\\$Fixed Cost&3,000&3,000&3,000&3,000\\$Income&3,750&5,000&4,500&3,000\\\end{array}\right][/tex]
The best Income is generated at the price of 1.25 dollar
Therefore, this is the amount to Specialty Coffees set for espresso.
A. Suppose the wages of computer-factory workers rises. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
B. Suppose the price of notebook computers (a substitute for tablets) falls. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing price of tablet computers to (rise / fall) and quantity to (rise / fall) .
C. Suppose the number of tablet computer manufacturers rises. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing price to (rise / fall) and quantity to ( (rise / fall) .
D. Suppose an exciting new game is released that is only available on tablet computers. This will cause the supply / the demand the supply the demand for tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
E. Suppose the prices for popular apps (complements to tablet computers) rise. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
Answer:
Supply, shift in , rise fall
the demand, shift in, fall ,fall
supply , shift out fall, rise
the demand , shift out rise rise
the demand shift in fall fall
Explanation:
If the wages of factory worker increases, it becomes more expensive to hire workers, the cost of production increases and the demand for labour would fall. as a result, production would fall and the supply of tablets would fall. a decrease in supply leads to an inward shift of the supply curve. as a result of the fall in supply, quantity would fall and there would be a rise in price.
Substitute goods are goods that can be used in place of another good. If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise and the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. As a result, price and quantity of tablets would fall.
Increase in the number of manufactures would lead to an increase in supply. this would cause a rise in the supply of tablets. when there is a rise in supply, the supply curve shifts out, prices fall and quantity increases.
the new game would increase demand for tablets because people would be interested in playing the game. as a result of the rise in demand, the demand curve would shift out, the quantity would rise and prices would rise
A complement is a good that is consumed together with another good. if the price of apps rise, it would become more expensive to buy apps as result the demand for tablets would fall. the demand curve would shift in and price and quantity would fall
When the wages of factory worker increases, it becomes more expensive to hire workers, also the cost of production increases, and also the demand for labor would fall. as a result, when the production would fall also the supply of tablets would fall. when a decrease in supply leads to an inward shift of the supply curve. Although as a result of the fall in supply, the quantity would fall, and also there would be a price rise.
When Substitute goods are goods that can be used in place of another good. also If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise, and also the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. So As a result, the price and also the number of tablets would fall.
When Increase in the number of manufacturers would lead to an increase in supply. this would cause a rise in the supply of tablets. when there are a rise in supply, the supply curve shifts out, prices fall, and also quantity increases.
When the new game would increase demand for tablets because people would be interested in playing the game. So as a result of the rise in demand, the demand curve would shift out, the quantity would rise and also prices would rise
Thus A complement is a good that is consumed together with another good. if the price of apps rises, it would become more expensive to buy apps as a result the demand for tablets would fall. Then the demand curve would shift in and price and also quantity would fall
Find out more information about Demand and supply here:
https://brainly.com/question/12252562
Fisher meeting with Bill Gates, CEO - Microsoft, to form alliances to develop new photo software that helped customers manipulate images, was an example of -
Answer: External horizontal diversification
Explanation:
External horizontal diversification is when new products or services are added to a company because they may appeal to the customers. This is a strategy that is used to increase the dependence of firm on certain segments of the market.
This was used when Fisher met with Bill Gates, CEO - Microsoft, to form alliances to develop new photo software that helped customers manipulate images.
The net cash flow provided by operating activities is an inflow of $37,042, the net cash flow used in investing activities is $16,831, and the net cash flow used in financing activities is $26,397. If the beginning cash account balance is $11,283, what is the ending cash account balance
Answer:
thewour cdhwj dnbeh b cbfehynbh e bcuenjedn ncefhj bhefc njnej nrjen bhrec bhjeb
Explanation:
You are considering two independent projects. Project A has an initial cost of $125,000 and cash inflows of $46,000, $79,000, and $51,000 for Years 1 to 3, respectively. Project B costs $135,000 with expected cash inflows for Years 1 to 3 of $50,000, $30,000, and $100,000, respectively. The required return for both projects is 16 percent. Based on IRR, you should:
Answer :
Choose Project A. Because it has a positive Net Present Value.
Explanation :
Find the Net Present of the two project. Then choose the Project with the highest or positive Net Present Value.
Calculation of NPV of Project A using a Financial Calculator :
Project A:
($125,000) CFj
$46,000 Cfj
$79,000 Cfj
$51,000 Cfj
i/yr 16.00 %
Shift NPV $6,038.58
Calculation of NPV of Project B using a Financial Calculator :
Project A:
($135,000) CFj
$50,000 Cfj
$30,000 Cfj
$100,000 Cfj
i/yr 16.00 %
Shift NPV -$5,535.90
Conclusion :
Choose Project A. Because it has a positive Net Present Value.
Johnson's Plumbing's fixed costs are $700,000 and the unit contribution margin is $17. What amount of units must be sold in order to realize an operating income of $100,000
Answer:
Target profit in units = 47058.82 rounded off to 47059 units
Explanation:
The break even units of sales are the number of units that must be sold in order for the company to have enough total revenue to cover its total costs. It is a point in the number of units where there is no profit or no loss.
We can use the break even analysis and formulas to calculate the number of units required to earn a certain target profit. Thus, we will just need to add the target profit amount to the fixed costs in the break even in units formula. The formula to calculate the target profit in units is,
Target profit in units = (Fixed costs + Target profit) / Contribution margin per unit
Target profit in units = (700000 + 100000) / 17
Target profit in units = 47058.82 rounded off to 47059 units
Saint Nick Enterprises has 17,500 shares of common stock outstanding at a price of $69 per share. The company has two bond issues outstanding. The first issue has 7 years to maturity, a par value of $1,000 per bond, and sells for 101.5 percent of par. The second issue matures in 21 years, has a par value of $2,000 per bond, and sells for 106.5 percent of par. The total face value of the first issue is $250,000, while the total face value of the second issue is $350,000. What is the capital structure weight of debt
Answer:
total weight of debt = 0.343 or 34.3%
Explanation:
stock's market value = 17,500 x $69 = $1,207,500
bond₁'s market value = $250,000 x 101.5% = $256,750
bond₂'s market value = $350,000 x 106.5% = $372,750
total market value of the firm = $1,837,000
weighted capital structure:
market value weight
stocks $1,207,500 0.657
bond₁ $256,750 0.140
bond₂ $372,750 0.203
total $1,837,000 1
total weight of debt = 0.343 or 34.3%
The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory.
a. True
b. False
Answer:
Option "a" = true.
Explanation:
"The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory"
The statement given above is right or CORRECT and TRUE(option a).
The concept of "Collaborative Planning, Forecasting and Replenishment" was first brought into limelight in the year 1995. Collaborative Planning, Forecasting & Replenishment make sure that a terminology or say a concept in commerce which is know as "Integration of supply chain" is improving greatly.
The collaborative planning, forecasting, and replenishment (CPFR) helps to improve operational efficiency by reducing costs such as that of logistics, transportation and many more.
work cell at Chris Ellis Commercial Laundry has a workstation with two machines, and each unit produced at the station needs to be processed by both of the machines. (The same unit cannot be worked on by both machines simultaneously.) Each machine has a production capacity of 5 units per hour. The throughput time of the work cell=nothing minutes per unit (enter your response as a whole number).
What is the process time of the work cell in minutes per unit?
Answer:
24 minutes
Explanation:
The computation of the process time of the work cell is shown below:
Throughput time is the time that is needed to produced a finished good product. It involves the manufacturing process time and the time for converting the raw material into a finished product
Therefore
Throughput time = [1 unit × (60 min ÷ 5 units)] × 2
= 24 minutes
10. Security X has expected return of 12% and standard deviation of 20%. Security Y has expected return of 15% and standard deviation of 27%. If the two securities have a correlation coefficient of 0.7, what is their covariance
Answer: 0.0378
Explanation:
The Covariance of securities refer to the relationship between two securities in terms of their movement together. A postie covariance means that securities usually move in the same direction while a negative means that they move in opposite directions. It can therefore be useful in portfolio diversification.
The formula is;
= Standard deviation of X * Standard deviation of Y * Correlation Coefficeint
= 20% * 27 * 0.7
= 0.0378
Extracts from cost information of Hebar Corp.:
Simple L3 Pack Complex L7 Pack Total
Setup cost allocated using direct labor-hour$19,250 $5,750 $25,000
Setup cost allocated using setup-hours $13,400 $11,600 $25,000
Assuming that setup-hours is considered a more effective cost drive for allocating setup costs than direct labor-hours. Which of the following statements is true of Hebar's setup costs under traditional costing?
A. L7 pack is undercosted by $5,750
B. L3 pack is overcosted by $5,850
C. L3 pack is undercosted by $5,850
D. L7 pack is overcosted by $5,850
Answer:
B. L3 pack is overcosted by $5,850
Explanation:
The statements that is true of Hebar's setup costs under traditional costing
Using this formula
Hebar's setup costs =Setup cost allocated using direct labor hours - Setup cost allocated using setup-hours
Where ,
Setup cost allocated using direct labor hours =$19,250
Setup cost allocated using setup-hours =$13,400
Let plug in the formula
Hebar's setup costs=$19,250 − $13,400 = $5,850
Therefore the statements that is true of Hebar's setup costs under traditional costing will be $5,850
Smith Services, Inc., was a trucking company established in 2000 and owned by Tony Smith as the sole shareholder. Smith Services, Inc., had an account with Laker Express, a fuel provider, and often would charge fuel purchases for the company trucks to that account. Smith’s employees would fuel their vehicles and sign the account slip with a notation that the purchase was for Smith Services, Inc. Laker Express would bill Smith Services regularly for the charges on the account. After several months of low business, Smith Services ceased doing business and was dissolved in 2013, with its assets being distributed to creditors. Laker Express only recovered a small part of the amount owed by Smith Services, Inc. Tony Smith then opened up a new trucking service business as a sole proprietor. Laker Express sought to recover Smith Services' unpaid fuel charges, which amounted to about $35,000, from Smith. He argued that he was not personally liable for a corporate debt. Should a court hold Tony Smith personally liable?
Assume that in addition to the facts given, that evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles. Does this change the outcome?
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Answer:
Smith Services, Inc. and Laker Express
a. A court should not hold Tony Smith personally liable for the corporate debt of Smith Services, Inc to the tune of $35,000 representing unpaid fuel charges to Laker Express. This decision is given based on the facts presented in the case, so far.
b. Assuming that in addition to the given facts, evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles, then this evidence changes the outcome. Smith Service, Inc. has met one of the conditions for piercing the corporate veil. This condition is commingling the corporate account with personal expenses and use of corporate assets. This may also question if proper accounting records were being kept at the Smith Services.
c. Therefore,
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Explanation:
To protect the legal status of corporations like Smith Services Inc. as limited liability entities, State courts reluctantly pierce the corporate veil, unless the requirements, which vary from state to state, are met. If Tony Smith does not the court to pierce the corporate veil of Smith Services, Inc., his former company should have used corporate assets only for corporate purposes. Based on the unpaid fuel charges, Tony Smith did not maintain the separation of ownership from his Smith Services, Inc. since he, his wife, their kids, and apparently the employees fuelled their personal cars on fuel charge to Laker Express for Smith Services, Inc. to offset.
1. Given this new evidence, a court would likely find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court would not likely find that the corporation was undercapitalized.
3. The court would not likely find that the corporation was created to evade an existing legal obligation.
4. The court likely would not find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely would pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
According to the case in hand, Tony Smith, the sole owner of Smith Services, a trucking company was accused of misappropriation of fuel for several years, up to the tune of $35, 000 which may or may not be the reason why the company went bankrupt.
Read more here:
https://brainly.com/question/24952554
