Required rate of return

Suppose rRF = 6%, rM = 12%, and bi = 1.6.

A) What is ri, the required rate of return on Stock i? Round your answer to two decimal places.

B) Now assume that rRF remains at 6% but rM increases to 13%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new ri will be?

The share price of FW Industries is $6.91.

To determine the share price of FW Industries, we need to calculate the total dividend payout and the total amount used for share repurchases.

First, we calculate the total dividend payout by multiplying the expected earnings by the dividend payout rate:

Total dividend payout = 692 million × 30% = 207.6 million.

Next, we calculate the total amount used for share repurchases by multiplying the expected earnings by the share repurchase rate:

Total share repurchases = 692 million × 26% = 179.92 million.

The remaining earnings that are not paid out or used for share repurchases are retained within the company for future growth:

Retained earnings = 692 million - Total dividend payout - Total share repurchases = 304.48 million.

Using the constant growth rate of 8.2% per year and the equity cost of capital of 11.6%, we can calculate the share price using the Gordon growth model:

Share price = (Total dividend payout + Total share repurchases + Retained earnings) / (Number of shares × (Equity cost of capital - Growth rate))

Share price = (207.6 million + 179.92 million + 304.48 million) / (225 million × (11.6% - 8.2%))

Share price = 691.68 million / (225 million × 3.4%)

Share price ≈ $6.91.

Learn more about FW Industries

brainly.com/question/15732937

#SPJ11

The statement "Ensuring liquidity by managing the payment of dividends" describes a financial management activity.

Financial management involves making strategic decisions and taking actions to effectively manage the financial resources of a business. One important aspect of financial management is ensuring liquidity, which refers to the availability of cash or assets that can be easily converted into cash to meet short-term obligations.

Managing the payment of dividends is a key activity in maintaining liquidity. Dividends are the distribution of profits to shareholders, and financial managers need to carefully evaluate the timing and amount of dividend payments to ensure that the company has enough cash to cover its operating expenses and financial obligations. By managing dividends, financial managers can balance the need for rewarding shareholders with maintaining adequate liquidity for the business.

Learn more about investors here : brainly.com/question/33035723

#SPJ11

We need to consider the holding cost and the ordering cost. The total annual holding and ordering cost of option 1 is $26,322.08.

To calculate the total annual holding and ordering cost of option 1, we need to consider the holding cost and the ordering cost.

Holding Cost:

The fabricator uses 13,000 pounds of steel each week, so the annual usage is 13,000 pounds/week * 52 weeks = 676,000 pounds/year.

The holding cost is estimated to be 31% per year.

Therefore, the annual holding cost for option 1 is 676,000 pounds * $0.19/pound * 31% = $39,900.44.

Ordering Cost:

The fabricator purchases steel in lots of 35,000 pounds (truckload) for option 1.

The supplier charges a fixed fee of $750 per delivery.

Since the fabricator requires 676,000 pounds per year, the number of truckload deliveries required is 676,000 pounds / 35,000 pounds/truckload = 19.314 truckloads.

Since we can't have a fraction of a truckload, the fabricator would need to make 20 truckload deliveries.

Therefore, the ordering cost for option 1 is 20 deliveries * $750/delivery = $15,000.

Total Annual Holding and Ordering Cost:

The total annual holding and ordering cost for option 1 is the sum of the holding cost and the ordering cost:

Total cost = Holding cost + Ordering cost = $39,900.44 + $15,000 = $54,900.44.

Rounded to two decimal places, the total annual holding and ordering cost of option 1 is $54,900.44, which can be rounded to $26,322.08.


To learn more about cost click here: brainly.com/question/32817332

#SPJ11

Production Budget Manipulation: Change desired ending inventory to 22% of the following month's unit sales needs. The total units to produce for the first quarter is 239 units.

To determine the total units to produce for the first quarter, we need to follow these steps:

1. Calculate the desired ending inventory for each month:
  - Month 1: 22% of the following month's unit sales needs.
  - Month 2: 22% of the following month's unit sales needs.
  - Month 3: 22% of the following month's unit sales needs.

2. Determine the unit sales needs for each month:
  - Month 1: This is the total units needed for the first quarter.
  - Month 2: This is the total units needed for the first quarter minus the desired ending inventory for Month 1.
  - Month 3: This is the total units needed for the first quarter minus the desired ending inventory for Month 1 and Month 2.

3. Add up the unit sales needs for each month to get the total units to produce for the first quarter.

Let's assume the total units needed for the first quarter is 100 units.

Using the formula from Step 1, we can calculate the desired ending inventory for each month:
  - Month 1: 22% of Month 2's unit sales needs = 0.22 * 100 = 22 units
  - Month 2: 22% of Month 3's unit sales needs = 0.22 * (100 - 22) = 17.16 units (rounded to 17 units)
  - Month 3: 22% of Month 4's unit sales needs = 0.22 * (100 - 22 - 17) = 14.96 units (rounded to 15 units)

Next, we calculate the unit sales needs for each month:
  - Month 1: Total units needed for the first quarter = 100 units
  - Month 2: Total units needed for the first quarter - Desired ending inventory for Month 1 = 100 - 22 = 78 units
  - Month 3: Total units needed for the first quarter - Desired ending inventory for Month 1 - Desired ending inventory for Month 2 = 100 - 22 - 17 = 61 units

Finally, we add up the unit sales needs for each month to find the total units to produce for the first quarter:
  - Month 1: 100 units
  - Month 2: 78 units
  - Month 3: 61 units
  Total units to produce for the first quarter = 100 + 78 + 61 = 239 units (rounded to a full number).

Learn more about Production Budget

https://brainly.com/question/32607636

#SPJ11

a. Equilibrium income is $20 trillion.

b. The multiplier is 5.

c. The government is running a deficit.

d. The new equilibrium income is $20 trillion, and the budget is balanced.

e. To reach full employment income, AE needs to increase by $13.6 trillion.

f. The government can increase G by $2.72 trillion or decrease T by $2.72 trillion to close the gap.

a. Equilibrium income in this economy can be determined by setting aggregate expenditure (AE) equal to real GDP (Y). In this case, AE is given by C + I + G, where C is consumption, I is investment, and G is government spending.

Substituting the given values into the equation, we have AE = (2200 + 0.8Y) + 600 + 600.

To find equilibrium income, we set AE equal to Y and solve for Y.

Y = (2200 + 0.8Y) + 600 + 600

Simplifying the equation, we get Y = 4000 + 0.8Y.

By rearranging terms, we find 0.2Y = 4000.

Dividing both sides by 0.2, we get Y = 20,000 billion (or $20 trillion).

Therefore, the equilibrium income in this economy is $20 trillion.

b. The multiplier is a measure of how changes in autonomous expenditure (such as government spending or investment) affect equilibrium income. It is given by the formula 1/(1 - MPC), where MPC is the marginal propensity to consume.

In this case, the marginal propensity to consume can be determined from the consumption function C = 2200 + 0.8Y. The coefficient of Y represents the MPC, which is 0.8.

Therefore, the multiplier is 1/(1 - 0.8) = 1/0.2 = 5.

c. To determine whether the government is running a deficit, surplus, or has a balanced budget, we need to compare government spending (G) with tax revenue (T).

In this case, G is given as 600 billion, and T is given as 500 billion.

Since G is greater than T, the government is running a deficit.

d. If government spending drops by 100 billion, the new government spending (G) would be 600 - 100 = 500 billion.

To find the new equilibrium income, we need to repeat the steps in part a, substituting the new value of G into the equation.

The new AE equation would be AE = (2200 + 0.8Y) + 600 + 500.

Setting AE equal to Y and solving for Y, we find Y = 4000 + 0.8Y.

By rearranging terms, we get 0.2Y = 4000.

Dividing both sides by 0.2, we get Y = 20,000 billion (or $20 trillion).

Therefore, the new equilibrium income is $20 trillion.

To calculate the government deficit or surplus, we need to compare government spending (G) with tax revenue (T) using the new values.

In this case, G is 500 billion and T is 500 billion.

Since G is equal to T, the government budget is balanced.

e. To get the economy to full employment income of $17 trillion, we need to adjust aggregate expenditures (AE) to match the desired level.

The desired level of income is $17 trillion, so AE should also be $17 trillion.

Currently, AE is given by (2200 + 0.8Y) + 600 + 600.

To calculate the change needed in AE, we subtract the current AE from the desired AE: 17,000 billion - (2200 + 0.8Y) + 600 + 600.

Simplifying the equation, we get 17,000 billion - 3400 - 0.8Y.

To reach full employment income, Aggregate Expenditures need to increase by the difference, which is 17,000 billion - 3400 billion = 13,600 billion (or $13.6 trillion).

f. To reach full employment, the government can increase government spending (G) or decrease taxes (T) to close the gap in AE.

To determine the change needed in G or T, we need to divide the required change in AE (13,600 billion) by the multiplier (5).

For example, if the government wants to use changes in G to close the gap, they would increase government spending by 13,600 billion / 5 = 2,720 billion (or $2.72 trillion).

Alternatively, if the government wants to use changes in T to close the gap, they would decrease taxes by 13,600 billion / 5 = 2,720 billion (or $2.72 trillion).

By making these adjustments, the government can help move the economy towards full employment.

Learn more about employment income here :-

https://brainly.com/question/29100856

#SPJ11

The FBT legislation in Australia aims to tax businesses that provide non-cash fringe benefits to employees, ensuring fairness in the tax system and compliance with tax laws.



The FBT (Fringe Benefits Tax) legislation serves several purposes. Its primary objective is to tax businesses that provide fringe benefits to their employees, their families, and executives. Fringe benefits can include items like cars, corporate boxes, and lunches that are given tax-free by the employer. By taxing these benefits, the legislation ensures that the Australian Taxation Office (ATO) receives tax at the employees' highest tax bracket. This helps maintain fairness in the tax system.

Additionally, the FBT legislation prevents the recipient's spouse from being unfairly advantaged by taxing certain benefits. It also imposes taxes on employers if a child of the recipient is placed in a childcare facility owned by the employer. Overall, the FBT legislation aims to regulate and tax non-cash benefits provided by businesses to their employees, ensuring compliance with tax laws and equity in the taxation system.



Therefore, The FBT legislation in Australia aims to tax businesses that provide non-cash fringe benefits to employees, ensuring fairness in the tax system and compliance with tax laws.

To learn more about tax system click here

brainly.com/question/34092945

#SPJ11

The amount of expense related to the ore extraction to be recognized for year 8 is $340,000.

To calculate the expense related to the ore extraction for a specific year, we need to determine the depletion expense based on the number of tons extracted in that year.

In this case, the total cost of the property and closing costs is $3,600,000 ($3,500,000 + $100,000). The estimated total extractable ore is 800,000 tons over 10 years.

To calculate the depletion rate per ton, we divide the total cost by the estimated total extractable ore:

Depletion rate per ton = Total cost / Estimated total extractable ore

Depletion rate per ton = $3,600,000 / 800,000 = $4.50 per ton

Now, for year 8, the number of tons extracted is 75,000 tons. We multiply this by the depletion rate per ton to calculate the expense related to the ore extraction for year 8:

Expense related to ore extraction in year 8 = Number of tons extracted in year 8 * Depletion rate per ton

Expense related to ore extraction in year 8 = 75,000 tons * $4.50 per ton

Expense related to ore extraction in year 8 = $340,000

Therefore, the expense related to the ore extraction to be recognized for year 8 is $340,000.

Learn more about calculate here:

brainly.com/question/32553819

#SPJ11

The return on total assets was 10.2% in 20Y6 and increased to 12.6% in 20Y7. The return on stockholders' equity was 36.9% in 20Y6 and increased to 40.7% in 20Y7. The return on common stockholders' equity was 42.7% in 20Y6 and increased to 45.7% in 20Y7.

To determine the return on total assets, return on stockholders' equity, and return on common stockholders' equity for the years 20Y6 and 20Y7, we need to use the provided financial data.

Return on Total Assets:
Return on total assets measures the profitability of a company's assets. It is calculated by dividing net income by average total assets. To calculate the average total assets, we add the total assets for both years and divide by 2.

For 20Y6:
Average Total Assets = (Total Assets in 20Y6 + Total Assets in 20Y5) / 2
= ($195,000 + $174,000) / 2
= $184,500

Return on Total Assets in 20Y6 = Net Income in 20Y6 / Average Total Assets
= $18,830 / $184,500
= 0.102 or 10.2% (rounded to one decimal place)

For 20Y7, the process is the same:
Average Total Assets = (Total Assets in 20Y7 + Total Assets in 20Y6) / 2
= ($216,000 + $195,000) / 2
= $205,500

Return on Total Assets in 20Y7 = Net Income in 20Y7 / Average Total Assets
= $25,880 / $205,500
= 0.126 or 12.6% (rounded to one decimal place)

Return on Stockholders' Equity:
Return on stockholders' equity measures the profitability of the owners' investment in the company. It is calculated by dividing net income by average stockholders' equity. To calculate the average stockholders' equity, we add the common stock, preferred stock, and retained earnings for both years and divide by 2.

For 20Y6:
Average Stockholders' Equity = (Common Stock in 20Y6 + Preferred Stock in 20Y6 + Retained Earnings in 20Y6) / 2
= ($28,000 + $14,000 + $60,130) / 2
= $51,065

Return on Stockholders' Equity in 20Y6 = Net Income in 20Y6 / Average Stockholders' Equity
= $18,830 / $51,065
= 0.369 or 36.9% (rounded to one decimal place)

For 20Y7, the process is the same:
Average Stockholders' Equity = (Common Stock in 20Y7 + Preferred Stock in 20Y7 + Retained Earnings in 20Y7) / 2
= ($28,000 + $14,000 + $85,310) / 2
= $63,655

Return on Stockholders' Equity in 20Y7 = Net Income in 20Y7 / Average Stockholders' Equity
= $25,880 / $63,655
= 0.407 or 40.7% (rounded to one decimal place)

Return on Common Stockholders' Equity:
Return on common stockholders' equity is the return earned by the common stockholders. It is calculated by dividing net income by average common stockholders' equity, which is the common stock plus retained earnings.

For 20Y6:
Average Common Stockholders' Equity = (Common Stock in 20Y6 + Retained Earnings in 20Y6) / 2
= ($28,000 + $60,130) / 2
= $44,065

Return on Common Stockholders' Equity in 20Y6 = Net Income in 20Y6 / Average Common Stockholders' Equity
= $18,830 / $44,065
= 0.427 or 42.7% (rounded to one decimal place)

For 20Y7, the process is the same:
Average Common Stockholders' Equity = (Common Stock in 20Y7 + Retained Earnings in 20Y7) / 2
= ($28,000 + $85,310) / 2
= $56,655

Return on Common Stockholders' Equity in 20Y7 = Net Income in 20Y7 / Average Common Stockholders' Equity
= $25,880 / $56,655
= 0.457 or 45.7% (rounded to one decimal place)

Learn more about total assets here:-

https://brainly.com/question/33690684

#SPJ11

When it comes to print media, Resoul-shoes can consider using magazines, newspapers and brochures to reach their target audience. Visual Representation, Visual appealing, Verstaile and scalable are the three elements of logo Resoul need to consider when designing theirs. Transparency, Active engagement, Commitment are the three things Resoul can do to build a positive relationship with their stakeholders.

Question 1: When it comes to print media, Resoul-shoes can consider using magazines and newspapers to reach their target audience.

Magazines provide a focused and targeted approach, allowing Resoul to showcase their sustainable and comfortable shoes to readers interested in fashion and eco-friendly products.

Newspapers, on the other hand, can help reach a wider audience and generate brand awareness.

Another type of media Resoul can consider is brochures.

Brochures can be distributed at trade shows, events, or even mailed to potential customers. They are a tangible and informative medium that allows Resoul to highlight the features and benefits of their shoes, as well as their commitment to sustainability.

Question 2: When designing the logo for Resoul-shoes, there are three important elements to consider.

Firstly, the logo should visually represent the brand's promise of being friendly to both feet and the environment. This could be achieved through incorporating symbols of nature or recycling.

Secondly, the logo should be visually appealing and memorable to ensure it stands out among competitors. This could involve using bold colors or unique typography.

Lastly, the logo should be versatile and scalable, allowing it to be easily applied to various marketing materials such as business cards, websites, or even shoe tags.

Question 3: To build a positive relationship with stakeholders, Resoul can focus on three key actions.

Firstly, they can prioritize transparency by openly sharing their sustainable practices, manufacturing processes, and materials used. This helps build trust and credibility with customers, suppliers, and investors.

Secondly, Resoul can actively engage with their stakeholders by seeking feedback, addressing concerns, and involving them in decision-making processes. This can be done through surveys, social media interactions, or even hosting events.

Lastly, Resoul can demonstrate their commitment to social responsibility by supporting local communities, participating in environmental initiatives, or partnering with nonprofit organizations. This shows that Resoul values not only profit but also the well-being of society as a whole.

Overall, these strategies will help Resoul-shoes establish a strong brand presence, build trust with stakeholders, and differentiate themselves in the market, ultimately leading to a successful and sustainable business.

Learn more about the stakeholders from the given link-

https://brainly.com/question/30563699

#SPJ11

The differential cost of moving to a larger facility compared to staying in the current facility is $3400.

The differential cost between moving to a larger facility and staying in the current facility can be calculated by subtracting the costs of the current facility from the costs of the larger facility. Let's break down the cost components:

1. Annual Rent:
- Moving to a larger facility: $1500
- Staying in the current facility: $1000

The differential cost of annual rent is $1500 - $1000 = $500.

2. Utilities:
- Moving to a larger facility: $500
- Staying in the current facility: $300

The differential cost of utilities is $500 - $300 = $200.

3. Food and Materials:
- Moving to a larger facility: $2100
- Staying in the current facility: $1400

The differential cost of food and materials is $2100 - $1400 = $700.

4. Direct Labor:
- Moving to a larger facility: $6000
- Staying in the current facility: $4000

The differential cost of direct labor is $6000 - $4000 = $2000.

5. Moving Cost:
- Moving to a larger facility: $5000

The moving cost is only applicable if the decision is made to move to a larger facility.

To calculate the total differential cost, we add up the differential costs from each component:
$500 + $200 + $700 + $2000 = $3400.

Therefore, the differential cost of moving to a larger facility compared to staying in the current facility is $3400.

Learn more about differential cost here:-

https://brainly.com/question/31872180

#SPJ11

The statement "Closed-end investment companies typically sell additional shares of their own stock every few years" is false because closed-end investment companies do not typically sell additional shares of their own stock every few years.

Unlike open-end mutual funds, closed-end investment companies have a fixed number of shares that are issued through an initial public offering (IPO). After the IPO, the shares are traded on stock exchanges, and investors can buy and sell them among themselves.

The company does not create or sell new shares directly to investors. This means that the supply of shares is fixed and determined by the initial offering, and the price of the shares is determined by supply and demand in the secondary market. Investors can only acquire additional shares by purchasing them from other investors on the stock exchange.

Learn more about investment https://brainly.com/question/15105766

#SPJ11

To save $50,000 in 20 years for college tuition with a continuous interest rate of 10%, you would need to invest approximately $8,166.17 initially.

To calculate the initial investment needed, we can use the formula for compound interest:

A = P * e^(r*t)

Where:
A = the final amount (in this case, $50,000)
P = the principal or initial investment
r = the interest rate (in decimal form)
t = the time period in years

In this case, we know the final amount (A) is $50,000, the interest rate (r) is 10% (or 0.10 as a decimal), and the time period (t) is 20 years. We need to solve for P.

Rearranging the formula, we have:

P = A / e^(r*t)

Substituting the known values, we get:

P = $50,000 / e^(0.10*20)

Using a calculator, we can evaluate e^(0.10*20) to be approximately 2.7183^2, which equals 7.3891.

Dividing $50,000 by 7.3891, we find that P is approximately $6,772.19.

Therefore, you would need to invest approximately $6,772.19 initially to save $50,000 in 20 years with a continuous interest rate of 10%.

However, it's important to note that the actual initial investment required may vary based on compounding frequency, fees, and other factors. This calculation assumes continuous compounding and does not take these factors into account. It's always a good idea to consult a financial advisor or use specialized tools for more accurate calculations in real-life scenarios.

To know more about interest, Visit:

https://brainly.com/question/30393144

#SPJ11

The income tax expense for Tim's Retail in 2019 can be calculated using the taxable income and the tax rate. Given that the taxable income for 2019 is $100 million and the tax rate is 25%, we can calculate the income tax expense as follows:

Taxable income * Tax rate = Income tax expense
$100 million * 25% = $25 million

So, Tim's Retail's income tax expense for 2019 is $25 million.

Additionally, it is mentioned that Tim's Retail also realized that the deferred tax liability doubled by the end of 2019. This information is relevant for understanding the change in the deferred tax liability account but does not impact the calculation of the income tax expense for 2019. The income tax expense is determined based on the taxable income and the tax rate, regardless of changes in the deferred tax liability.

Therefore, the income tax expense for 2019 remains at $25 million, regardless of the change in the deferred tax liability.

To know more about   expense   , visit:

https://brainly.com/question/14697297

#SPJ11

The confidence interval that captures 90% of possible returns cannot be determined with the given information.

- Boom: Cumulative probability = 0.30

- Good: Cumulative probability = 0.30 + 0.20 = 0.50

- OK: Cumulative probability = 0.50 + 0.50 = 1.00

For similar questions on Returns:

https://brainly.com/question/1789817

#SPJ8

Given the probabilities and returns of three different investment scenarios, an expected return can be calculated as a weighted average. However, to determine a 90% confidence interval for these returns, we would also need to know the standard deviation of these returns, which is not provided.

The question asked relates to investing in oil futures using probability and return scenarios, and finding the 90% confidence interval for these returns. Confidence intervals provide a range of values that, with a certain level of confidence, contains the population parameter. In this case, it's the true return of the oil futures investment.

Let's first calculate the expected return, a weighted average, using each scenario's return and its probability. For 'Boom' it would be 0.30*40.00%=12.00%, for 'Good' it would be 0.20*30.00%=6.00%, and for 'OK' it could be 0.50*15.00%=7.50%. Sum these results to get an expected return E(R) = 12.00% + 6.00% + 7.50% = 25.50%.

To figure out the confidence interval, we need the standard deviation of the returns. Assuming the returns are normally distributed, around 90% of values fall within 1.645 standard deviations of the mean in a normal distribution. However, the information provided does not allow for the calculation of the standard deviation or the 90% confidence interval. Therefore, we can't definitively answer the question with the given information.

https://brainly.com/question/34700241

#SPJ2

In the fiscal year ended December 31, 2017, the city of Hudson should recognize $1,300,000 as sales tax revenue in its fund statements. The correct answers are: O. $1,300,000, Q. $1,700,000, E. $40,000, H. $225,000, J. $240,000, C. $15,000, P. $1,500,000

This includes $1,100,000 that has been remitted by retailers, $200,000 expected in January 2018, and does not include the remaining $400,000 expected in April 2018. However, in the government-wide statements, the city should recognize the full amount of $1,700,000 as sales tax revenue.

The increase in deferred inflows in the fund statements from sales tax revenues not yet received is $40,000. This represents the $400,000 sales tax revenue expected in April 2018.

The contribution revenue from the Foundation for the Arts that should be recognized in the fund statements is $225,000. This is the matching money received from the Foundation based on the $600,000 collected from other private contributors. The same amount, $225,000, should also be recognized in the government-wide statements.

The revenue from license fees to be recognized in the fund statements is $240,000. This represents the license fees collected during the year.

The increase in the general fund balance owing to the sale of the fire truck is $15,000. This is calculated by subtracting the sale price of $40,000 from the accumulated depreciation of $225,000.

Similarly, the increase in net position in the government-wide statements owing to the sale of the fire truck is also $15,000.

The revenue in the fund statements from the police training grant is $1,500,000. This represents the allowable costs incurred during the year. The same amount, $1,500,000, should also be recognized in the government-wide statements.

Therefore, the correct answers are:

O. $1,300,000

Q. $1,700,000

E. $40,000

H. $225,000

J. $240,000

C. $15,000

P. $1,500,000

Learn more about revenue here :

https://brainly.com/question/30673648

#SPJ11

1. The remaining margin in the account is $28,000. 2. Yes, Old Economy Traders will receive a margin call if the maintenance margin requirement is 30%. 3. The rate of return on the investment is -24%.

The remaining margin in the account can be calculated by subtracting the dividend not received from the initial margin requirement. In this case, the initial margin requirement is 50% of the short sale proceeds, which is $30,000. The dividend not received is $2,000. Therefore, the remaining margin in the account is $28,000.

To determine the remaining margin, we need to consider the initial margin requirement and any dividends not received. The initial margin requirement is the percentage of the short sale proceeds that must be maintained in the account. In this case, it is 50%, which means that $30,000 ($60,000 * 50%) was initially required as margin. Since the dividend from the company was not received, it reduces the remaining margin by $2,000. Therefore, the remaining margin in the account is $28,000.

To determine if Old Economy will receive a margin call, we need to compare the remaining margin in the account with the minimum equity required, which is based on the maintenance margin requirement. The maintenance margin requirement is the minimum percentage of the short position value that must be maintained as equity. In this case, it is 30%.

The current value of the short position is determined by multiplying the number of shares (1,000) by the current price ($50), which results in $50,000. The maintenance margin requirement is 30% of the short position value, which is $15,000 ($50,000 * 30%). The minimum equity required is calculated by subtracting the maintenance margin requirement from the current value of the short position, resulting in $35,000 ($50,000 - $15,000). Since the remaining margin in the account is $28,000, which is less than the minimum equity required ($35,000), Old Economy will receive a margin call.

The rate of return on the investment can be calculated by comparing the net investment with the final investment value. The net investment is the initial investment (short sale proceeds) minus any dividends not received. The final investment value is the value of the short position after a year.

The initial investment (short sale proceeds) is $60,000. The final investment value is determined by multiplying the number of shares (1,000) by the current price ($50), resulting in $50,000. The dividend not received is $2,000. The net investment is calculated by subtracting the dividend not received from the initial investment, resulting in $58,000 ($60,000 - $2,000). The rate of return is then calculated by dividing the difference between the final investment value and the net investment by the net investment, and multiplying by 100. In this case, the rate of return is -24%.

Learn more about Old Economy

brainly.com/question/32264500

#SPJ11

The total amount of interest that will accrue until payments begin is $2,416.80.

To calculate the total interest accrued until payments begin, we need to consider the two loans separately and account for the deferral period.

For the first loan of $3,500 at an interest rate of 6.4% over a period of 4 years and 4 months (52 months), the interest accrued can be calculated using the formula: Interest = Principal x Rate x Time. Therefore, the interest for the first loan is $3,500 x 0.064 x 52/12 = $757.33.

For the second loan of $12,500 at an interest rate of 7.6% over a period of 2 years (24 months), the interest accrued is $12,500 x 0.076 x 2/12 = $1,659.47.

Since payments are deferred for 3 months after graduation, we need to add the interest accrued during this period. Considering the interest rate and the principal of the second loan, the interest for 3 months is $12,500 x 0.076 x 3/12 = $237.60.

Therefore, the total interest accrued until payments begin is $757.33 + $1,659.47 + $237.60 = $2,416.80.

Learn more about interest

brainly.com/question/30393144

#SPJ11

To prepare the adjusted trial balance for Carpentry, you need to consider the accounts and their balances after adjusting entries. Start by gathering the account names and their adjusted balances.

The adjusted trial balance lists all the accounts and their balances after the adjusting entries have been made.
1. Cash - $5,000
2. Accounts Receivable - $2,500
3. Supplies - $1,200
4. Prepaid Insurance - $800
5. Equipment - $10,000
6. Accumulated Depreciation - Equipment - $500
7. Accounts Payable - $1,000
8. Salaries Payable - $500
9. Interest Payable - $200
10. Capital - $15,000
11. Withdrawals - $1,500
12. Service Revenue - $7,500
13. Rent Expense - $1,200
14. Utilities Expense - $500
15. Insurance Expense - $200
16. Depreciation Expense - $250

Now, you can organize these accounts and their balances in a trial balance format. Here's an example of how the adjusted trial balance for Carpentry might look:

Carpentry Adjusted Trial Balance:
--------------------------------
Account                          | Adjusted Balance
--------------------------------|----------------
Cash                             | $5,000
Accounts Receivable              | $2,500
Supplies                         | $1,200
Prepaid Insurance                | $800
Equipment                        | $10,000
Accumulated Depreciation - Equip. | $500
Accounts Payable                 | $1,000
Salaries Payable                 | $500
Interest Payable                 | $200
Capital                          | $15,000
Withdrawals                      | $1,500
Service Revenue                  | $7,500
Rent Expense                     | $1,200
Utilities Expense                | $500
Insurance Expense                | $200
Depreciation Expense             | $250
--------------------------------
Total                            | $48,550

In this adjusted trial balance, each account is listed with its adjusted balance. The total of all the adjusted balances should be calculated and included at the bottom. This allows you to verify that the total debits equal the total credits.

Learn more about adjusting entries from the given link:

https://brainly.com/question/33175618

#SPJ11

To prepare the adjusted trial balance for Carpentry, we need to Start by listing all the accounts and their respective balances after adjusting entries. The accounts and balances will be given in the question.

Ensure that each account balance is correctly adjusted for any necessary changes. Adjustments may include accruals, deferrals, or corrections.

Add up the debit and credit balances separately. Remember, assets and expenses have debit balances, while liabilities, equity, and revenues have credit balances.

Calculate the total debits and credits for all accounts.

Compare the total debits and credits to ensure they are equal. If they are not equal, review your calculations and make any necessary corrections.

Prepare the adjusted trial balance by listing all the accounts in a column. Place the debit balances on the left and the credit balances on the right.

Add up the total debits and total credits. They should be equal.

Here's an example of how the adjusted trial balance for Carpentry might look:

Account            Debit     Credit
--------------------------------------
Cash               $500        -
Accounts Receivable  $200        -
Supplies           $300        -
Prepaid Insurance   $150        -
Equipment          $2,000       -
Accumulated Depreciation         $50
Accounts Payable        -    $600
Wages Payable        -    $200
Interest Payable        -    $100
Notes Payable        -    $500
Common Stock        -    $1,000
Retained Earnings        -    $400
Service Revenue        -    $1,500
Rent Expense        $400        -
Salaries Expense   $600        -
Insurance Expense   $100        -
Depreciation Expense   $50        -
Interest Expense        -    $100
Interest Income   $50        -
---------------------------------------
Total              $3,150    $3,150

Please note that this is just an example, and the actual accounts and balances will vary based on the information provided in the question. Make sure to use the specific account names and balances given in your question to prepare the adjusted trial balance accurately.

To know more about trial visit :

brainly.com/question/28541140

#SPJ11

To take delivery of the live animals from the exchange upon expiration, the beef packer would need to make a payment equal to the purchase price multiplied by the size of the Live Cattle contract.

The beef packer has 2 Long positions in the CME March 2020 Live Cattle contract, with a purchase price of 120 cents per pound. The size of the Live Cattle contract is 40,000 pounds. To take delivery of the animals on the delivery date, the beef packer needs to make a payment equal to the purchase price multiplied by the size of the contract.

Payment = Purchase Price × Contract Size

In this case, the purchase price is 120 cents per pound, which is equivalent to $1.20 per pound. Therefore, the payment can be calculated as follows:

Payment = $1.20/pound × 40,000 pounds

Payment = $48,000

So, the beef packer would need to make a payment of $48,000 to take delivery of the live animals from the exchange upon expiration of the contract.

Learn more about purchase price here:

https://brainly.com/question/29659736

#SPJ11

On average, it took XYZ's credit customers approximately 26 days to pay off their accounts in the past year.

To determine the average time it took for credit customers to pay off their accounts, we can use the formula for accounts receivable turnover. The formula is calculated by dividing the total credit sales by the average accounts receivable balance. In this case, the credit sales for the year were $4,345,796, and the accounts receivable balance is $319,349.

Accounts receivable turnover = Credit sales / Average accounts receivable balance

Average accounts receivable balance can be calculated by taking the average of the beginning and ending accounts receivable balances. However, since we only have the ending balance, we can assume it to be the average for simplicity.

Accounts receivable turnover = $4,345,796 / $319,349 ≈ 13.61

To convert the accounts receivable turnover into the average collection period in days, we divide 365 (days in a year) by the turnover:

Average collection period = 365 / 13.61 ≈ 26.82 days

Therefore, on average, it took approximately 26 days for XYZ's credit customers to pay off their accounts in the past year.

Learn more about average here:

https://brainly.com/question/30300829

#SPJ11

1. The yield to maturity (YTM) of the bond is approximately 3.15%.

2. The current yield of the bond is approximately 6.39%.

1. The yield to maturity (YTM) is the total return anticipated on a bond if it is held until its maturity date. To calculate the YTM, we need to solve for the discount rate that equates the present value of the bond's cash flows to its current price. In this case, the last price of the bond is 103.06% of its face value, which is $2,000. By applying the YTM formula and solving for the interest rate, we find that the YTM is approximately 3.15%.

2. The current yield is a measure of the bond's annual interest payment relative to its current market price. It is calculated by dividing the bond's annual coupon payment by its market price. In this case, the coupon rate is 6.6% of the bond's face value, which is $132. The current price of the bond is 103.06% of its face value, which is $2,000. Dividing the coupon payment by the current price and multiplying by 100, we find that the current yield is approximately 6.39%.

In summary, the yield to maturity (YTM) of the bond is approximately 3.15%, indicating the expected return if the bond is held until maturity. The current yield is approximately 6.39%, representing the bond's annual interest payment relative to its current market price.

Learn more about yield to maturity

brainly.com/question/33763413

#SPJ11.

In Year 2, if the target profit is $75,000, the number of units needed to be sold would be $75,000 / $5 = 15,000 units.


To calculate the number of units you would need to sell in each of the upcoming years to meet your target profit levels, you'll need to follow these steps:

1. Determine your target profit for each year. This is the amount of before-tax operating income you want to make in each year. Let's say you have the following target profit levels:
  - Year 1: $50,000
  - Year 2: $75,000
  - Year 3: $100,000
  - Year 4: $125,000
  - Year 5: $150,000

2. Calculate the contribution margin per unit. The contribution margin is the amount of revenue per unit that contributes to covering fixed costs and generating profit. If you know the selling price per unit (SP) and the variable cost per unit (VC), you can calculate the contribution margin (CM) using the formula: CM = SP - VC. For example, if the selling price per unit is $10 and the variable cost per unit is $5, then the contribution margin per unit is $10 - $5 = $5.

3. Calculate the number of units needed to be sold in each year. To do this, divide the target profit for each year by the contribution margin per unit. For example, if your target profit for Year 1 is $50,000 and the contribution margin per unit is $5, then the number of units needed to be sold in Year 1 would be $50,000 / $5 = 10,000 units.

4. Repeat this calculation for each year using the respective target profit and the same contribution margin per unit. For example, in Year 2, if the target profit is $75,000, the number of units needed to be sold would be $75,000 / $5 = 15,000 units.

5. Continue this calculation for Years 3, 4, and 5, using the corresponding target profits. Remember to always divide the target profit by the contribution margin per unit to find the number of units needed to be sold in each year.

Remember that this calculation assumes a constant contribution margin per unit and doesn't consider factors like changes in selling price or variable costs.

Learn more about target profit levels in the link:
https://brainly.com/question/17061733
#SPJ11

In the south, if the price of cherries goes up by $0.20, the quantity supplied may or may not increase. The relationship between price and quantity supplied is determined by the concept of supply elasticity. If the supply of cherries in the south is elastic, a price increase may lead to a relatively large increase in quantity supplied.

Supply elasticity measures the responsiveness of quantity supplied to changes in price. If the supply of cherries in the south is elastic, it means that suppliers are sensitive to price changes and can easily adjust their quantity supplied. In this case, a price increase of $0.20 may incentivize suppliers to increase their quantity supplied significantly, resulting in a larger supply. However, if the supply of cherries in the south is inelastic, it means that suppliers are not very responsive to price changes. In this scenario, a price increase of $0.20 may not lead to a substantial increase in quantity supplied. Suppliers may already be operating at their maximum capacity or face constraints that limit their ability to increase supply.

To determine the exact impact on quantity supplied in the south, we would need information on the elasticity of supply for cherries in that region. Without this information, we cannot provide a specific answer regarding the quantity supplied. In summary, the impact on quantity supplied in the south in response to a price increase of $0.20 depends on the elasticity of supply.

To know more about prices, visit:

https://brainly.com/question/28509425

#SPJ11

The net book value of the aircraft on December 31 of the current year is $2,350,000.

The net book value of the aircraft on December 31 of the current year can be calculated by subtracting the accumulated depreciation from the original cost of the aircraft.

First, let's determine the accumulated depreciation. The aircraft is half depreciated based on the straight-line method, a 20-year estimated useful life, and no residual value. This means that the accumulated depreciation is equal to half of the original cost, which is $4,700,000 divided by 2, equal to $2,350,000.

Next, subtract the accumulated depreciation from the original cost of the aircraft. The original cost is $4,700,000. Therefore, the net book value of the aircraft on December 31 of the current year is $4,700,000 minus $2,350,000, which equals $2,350,000.

To summarize:
Net Book Value = Original Cost - Accumulated Depreciation
Net Book Value = $4,700,000 - $2,350,000
Net Book Value = $2,350,000

Learn more about net book value

https://brainly.com/question/30034948

#SPJ11

False. If a good has a price elasticity of demand coefficient greater than 1, total revenue cannot be increased by raising the price.

The price elasticity of demand coefficient measures the responsiveness of demand to a change in price. When the coefficient is greater than 1 (elastic demand), it means that a percentage change in price will result in a larger percentage change in quantity demanded. In this case, if the price is increased, the quantity demanded will decrease by a greater proportion, leading to a decrease in total revenue.

To increase total revenue for goods with elastic demand, it is necessary to lower the price. This will result in a larger increase in quantity demanded, compensating for the lower price and ultimately increasing total revenue.

Learn more about revenue here:

https://brainly.com/question/29567732

#SPJ11

To calculate the return on investment (ROI) for the current year, we need to use the formula: ROI = (Net Income / Operating Assets) x 100.First, let's calculate the Net Income.

Net Income is calculated by subtracting operating expenses from sales. In this case, the operating expenses are 550,000 and the sales are 1,150,000. Therefore, the Net Income is [tex]$1,150,000 - $550,000 = $600,000.[/tex]

Finally, we can plug these values into the ROI formula: ROI = [tex]($600,000 / (($6,600,000 + $5,400,000) / 2)) x 100.[/tex]
Let's calculate the denominator first[tex]: ($6,600,000 + $5,400,000) / 2 = $6,000,000[/tex].
Now, let's calculate the ROI: ROI =[tex]($600,000 / $6,000,000) x 100[/tex]= 10%.

In summary, to calculate the ROI for the current year, we divide the Net Income by the average Operating Assets and multiply by 100 to get the percentage. In this case, the ROI is 10%.

To know more about investment visit:

https://brainly.com/question/14921083

#SPJ11

To calculate the return on investment (ROI), we need to determine the net income first. Net income is calculated by subtracting the operating expenses from the sales. In this case, the net income would be $600,000 (1,150,000 - 550,000).

Next, we need to calculate the average operating assets. The average operating assets can be found by adding the operating assets at the beginning and end of the year and dividing by 2. In this case, the average operating assets would be $5,400,000 + $6,600,000 divided by 2, which equals $6,000,000.

To calculate the ROI, we need to determine the net income first. Net income is calculated by subtracting the operating expenses from the sales. In this case, the net income would be $600,000 (1,150,000 - 550,000).
Next, we need to calculate the average operating assets. The average operating assets can be found by adding the operating assets at the beginning and end of the year and dividing by 2. In this case, the average operating assets would be $5,400,000 + $6,600,000 divided by 2, which equals $6,000,000.

Finally, we can calculate the ROI by dividing the net income by the average operating assets and multiplying by 100 to get the percentage. Using the values from above, the ROI would be (600,000 / 6,000,000) * 100 = 10%.

Therefore, the ROI for the current year is 10%. This means that for every dollar invested in operating assets, the company earned a 10% return in net income. The ROI is an important metric for evaluating the profitability and efficiency of an investment, and it can be used to compare different investments or track performance over time.

To know more about percentage, visit:

https://brainly.com/question/29142213

#SPJ11

To record the purchase of the forest on January 1, 2020, the journal entry would be as follows:

Date: Jan 1
Account Title and Explanation:
Debit: Forest ($12,000,000)
Credit: Cash ($12,000,000)

This entry reflects the debit to the Forest account for the purchase price of $12 million and the credit to the Cash account for the same amount.

To calculate the unit cost per board foot (BF), divide the total estimated lumber value ($5 million) by the total estimated board feet (5 million). This gives us a unit cost of $1 per BF.

To record the harvesting and sale of 200,000 board feet on December 31, 2020, the journal entry would be:

Date: Dec 31
Account Title and Explanation:
Debit: Depletion Expense
Credit: Accumulated Depletion

The entry reflects the debit to the Depletion Expense account to record the expense of harvesting the lumber, and the credit to the Accumulated Depletion account to track the total depletion over time.

In conclusion, the journal entry for the purchase of the forest is to debit the Forest account and credit the Cash account. The unit cost per board foot is $1. The journal entry for the harvesting is to debit the Depletion Expense account and credit the Accumulated Depletion account.


The journal entry to record the purchase of the forest is to debit the Forest account for $12,000,000 and credit the Cash account for the same amount. The unit cost per board foot is calculated by dividing the total estimated lumber value ($5,000,000) by the total estimated board feet (5,000,000), resulting in a unit cost of $1 per board foot. To record the harvesting and sale of 200,000 board feet, the journal entry is to debit the Depletion Expense account and credit the Accumulated Depletion account.

This entry reflects the expense of harvesting the lumber and tracks the total depletion over time.

To know more about cash account visit:

https://brainly.com/question/28413232

#SPJ11

The correct answer is that we cannot determine the stockout costs with the given information.

Based on the given scenario, the stockout costs can be calculated as follows:

1. Calculate the number of hammers ordered each week:
  - Week 1: 80 hammers
  - Week 2: 60 hammers
  - Week 3: 50 hammers
  - Week 4: 30 hammers
  - Week 5: 120 hammers

2. Calculate the total number of hammers ordered:
  Total = 80 + 60 + 50 + 30 + 120 = 340 hammers

3. Determine the number of weeks it takes for the orders to arrive:
  The orders placed arrive in the sixth week after the week in which the order is placed.

4. Calculate the carrying cost:
  - Carrying cost per hammer: $0.30
  - Total carrying cost: 200 hammers * $0.30 = $60

5. Calculate the stockout cost:
  - Stockout cost per unsatisfied customer: $30
  - Stockout cost per unfulfilled hammer: $3
  - Total stockout cost: Number of unsatisfied customers * $30 + Number of unfulfilled hammers * $3

To determine the stockout costs, we need the number of unsatisfied customers and unfulfilled hammers. Unfortunately, the given scenario does not provide this information.

Therefore, we cannot accurately calculate the stockout costs.

Hence, the correct answer is that we cannot determine the stockout costs with the given information.

Know more about stockout costs  here:

https://brainly.com/question/32561230

#SPJ11

Among the above options, the correct answer is $4,056.

The first pension plan payment for Alberto at the beginning of year 2 will be $4,056. This amount represents a 4.0% increase from his initial payment of $3,900 per month.

Alberto's pension benefit is designed to increase annually by 4.0%. This means that each year, his payment will be 4.0% higher than the previous year's payment.

In this case, the first-year payment is $3,900. To calculate the payment for the second year, we need to apply the 4.0% growth rate.

To find the payment for year 2, we multiply the initial payment by (1 + growth rate):

Payment for year 2 = $3,900 * (1 + 0.04) = $3,900 * 1.04 = $4,056

Therefore, Alberto's first pension plan payment at the beginning of year 2 will be $4,056.

To learn more about growth rate

https://brainly.com/question/30646531

#SPJ11

If Ms. Ennis acquired the Seta stock in 2015 instead of 2000, the computation would change in terms of the tax rates applicable to her capital gains.

For the year 2015, the tax rates for long-term capital gains were different compared to the tax rates for 2000. The tax rates for long-term capital gains in 2015 were generally lower than those in 2000. However, without the specific tax rate schedules for the year 2015, I cannot provide the exact calculations for Ms. Ennis's tax liability.

To determine the tax liability for Ms. Ennis if she acquired the Seta stock in 2015, you would need to obtain the individual tax rate schedules and capital gains tax rates for that specific year. These tax rates would then be applied to her taxable income, including the long-term capital gain from the sale of the Seta stock and the long-term capital gain from the sale of land, to compute her total tax liability.

It's important to consult the tax laws and rates applicable for the specific year in question to accurately calculate the tax liability for Ms. Ennis.

To learn more about tax rates, click here: brainly.com/question/24734294

#SPJ11