The Sharpe's measure for Arashpreet's investment portfolio is 1.4, while the Sharpe's measure for the market is 1.1. This information suggests that Arashpreet's portfolio
O exhibits superior performance because its risk premium per unit of risk is above that of the market.
O is overly diversified, and some securities should be sold to bring the portfolio in line with the market.
O exhibits poor performance because its risk premium per unit of risk is below that of the market.
O is inadequately diversified, and more securities should be added to the portfolio in order to bring it in line with the market.

Answers

Answer 1

The correct answer is: Arashpreet's portfolio exhibits superior performance because its risk premium per unit of risk is above that of the market.

The Sharpe ratio measures the risk-adjusted performance of an investment or portfolio. A higher Sharpe ratio indicates a better risk-adjusted return. In this case, Arashpreet's portfolio has a Sharpe ratio of 1.4, while the market has a Sharpe ratio of 1.1. Since Arashpreet's portfolio has a higher Sharpe ratio, it suggests that it is outperforming the market on a risk-adjusted basis.

The portfolio's risk premium (excess return) per unit of risk is higher compared to the market, indicating superior performance. Therefore, correct answer is: Arashpreet's portfolio exhibits superior performance because its risk premium per unit of risk is above that of the market.

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Related Questions

Describe how the phasing out of subsidies to the oil industry
can affect Peak Oil.

Answers

Phasing out subsidies to the oil industry could have a significant impact on Peak Oil, which refers to the point at which global oil production reaches its maximum level and then begins to decline.

Subsidies are financial incentives given to companies to encourage them to produce more oil, which in turn increases supply and keeps prices low. However, this can also lead to overproduction and a depletion of resources, which can accelerate the onset of Peak Oil.

If subsidies are phased out, it would become more expensive for companies to extract and produce oil. This could lead to a decrease in supply, which could slow down the rate at which Peak Oil occurs. However, it could also lead to higher prices, which could incentivize companies to invest in more expensive extraction methods such as fracking or offshore drilling.

Ultimately, the impact of phasing out subsidies on Peak Oil would depend on a number of factors, including the rate at which subsidies are phased out, the response of oil companies, and the development of alternative energy sources.

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A static budget is usually appropriate in evaluating a manager's effectiveness in controlling: fixed manufacturing costs and fixed selling and administrative expenses. variable manufacturing costs and variable selling and administrative expenses. fixed manufacturing costs and variable selling and administrative expenses. variable manufacturing costs and fixed selling and administrative expenses.

Answers

A static budget is usually appropriate in evaluating a manager's effectiveness in controlling: fixed manufacturing costs and fixed selling and administrative expenses. Thus, option A is the correct option.

When the behavior of the expenses in response to changes in activity is stable, a static budget report is useful for assessing the success of managers in controlling costs. Only in situations when the cost is fixed can a static report be used effectively.

A static budget predicts revenues and costs over a predetermined time period but stays the same despite variations in company activity. Government, educational, and non-profit institutions frequently employ static budgets. A flexible budget, as opposed to a static one, adapts to variations in sales and production levels.

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Final answer:

A static budget is most effective in evaluating a manager's ability to control fixed manufacturing costs and fixed selling and administrative expenses. This is because these costs remain consistent regardless of production levels.

Explanation:

A static budget is generally appropriate for evaluating a manager's effectiveness in controlling fixed manufacturing costs and fixed selling and administrative expenses. Fixed costs, like rent or machinery, remain the same regardless of production levels. Therefore, a manager's ability to control these costs in an economic setting can serve as an indicator of their efficiency and effectiveness.

Alternatively, variable costs change in proportion to the level of production, and can include costs like raw materials or direct labor. These costs can fluctuate dramatically, making it more challenging for a static budget to effectively evaluate a manager's ability to control these costs.

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item 4 all overseas supplier factories that pay low wages are engaging in a highly unethical social practice. group startstrue or false

Answers

The statement given "item 4 all overseas supplier factories that pay low wages are engaging in a highly unethical social practice." is false because it is not accurate to categorize all overseas supplier factories that pay low wages as engaging in a highly unethical social practice.

While it is true that low wages in overseas supplier factories can raise ethical concerns, it is important to recognize that the ethical implications of low wages vary depending on various factors, including local economic conditions, cost of living, and legal requirements in different countries. Some overseas supplier factories may pay low wages due to economic realities or local labor market conditions, rather than deliberate exploitation.

Ethical assessments should consider the broader context and engage in a more nuanced analysis rather than making blanket statements about all overseas supplier factories with low wages. Therefore, the statement is false.

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aisha displays convergence (alignment) with people and avoids actions that might place her at odds with others. aisha employs an __________ language orientation.

Answers

Based on the description provided, it seems that Aisha employs a collectivist language orientation.

This means that she values harmony and cooperation within her social groups, and places emphasis on the needs and goals of the group rather than her own individual needs. A collectivist language orientation is often associated with cultures that prioritize interdependence and group loyalty, rather than individualism and self-expression. Aisha's tendency to display convergence with others and avoid actions that might create conflict or tension is consistent with the principles of collectivism. She likely places a high value on maintaining positive relationships with others and may feel uncomfortable asserting herself or expressing opinions that deviate from the group consensus. This approach to communication can be effective in building strong social connections and fostering cooperation, but it can also lead to a lack of individual expression and creativity. It's worth noting that language orientation is not necessarily fixed or immutable - individuals may adopt different communication styles depending on the context or the specific social group they are interacting with. However, in this case, the evidence suggests that Aisha's communication style is oriented toward collectivism.

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In relationship quality (SRQ) indexing refers to 1. Balancing the needs of the buying organization and the needs of the supply chain itself II. Assessing the supplier-buyer relationship from the supplier's point of view III. The extent to which cooperation, trust, commitment, satisfaction, and performance expectations influencing the relationships in the same industry a. I and II b. I. II and III c. I and III d. None of the above

Answers

The correct answer is: c. I and III

Relationship quality (SRQ) indexing refers to balancing the needs of the buying organization and the supply chain itself, as well as the influence of cooperation, trust, commitment, satisfaction, and performance expectations on relationships within the same industry.

How is relationship quality (SRQ) indexing defined?

The correct answer is: c. I and III

In relationship quality (SRQ) indexing, it refers to balancing the needs of the buying organization and the needs of the supply chain itself (I), as well as the extent to which cooperation, trust, commitment, satisfaction, and performance expectations influence the relationships in the same industry (III). Assessing the supplier-buyer relationship from the supplier's point of view (II) is not specifically mentioned in relation to SRQ indexing.

Relationship quality (SRQ) indexing involves balancing the needs of the buying organization and the supply chain itself. It also considers the influence of cooperation, trust, commitment, satisfaction, and performance expectations on relationships within the same industry. Assessing the supplier-buyer relationship from the supplier's perspective is not explicitly mentioned.

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Based on the given options, the correct answer is:

c. I and III

In relationship quality (SRQ) indexing, balancing the needs of the buying organization and the needs of the supply chain itself is an important aspect. This refers to ensuring that the relationship between the buyer and the supplier is mutually beneficial and takes into account the requirements of both parties.

Additionally, relationship quality indexing also involves assessing the supplier-buyer relationship from the supplier's point of view. This helps in understanding the supplier's perspective, their level of satisfaction, and their evaluation of the relationship.

Furthermore, relationship quality indexing considers the extent to which cooperation, trust, commitment, satisfaction, and performance expectations influence the relationships in the same industry. These factors play a significant role in shaping and evaluating the quality of the relationship between the buyer and the supplier.

Hence, both I and III are correct, making option c the correct choice

Pretoza Inc. has accounts payable of 841,000 euros (EUR) due in 4 months. The spot rate for euro is 2.0068 US dollars and the forward rate for euro in 4 months is 2.3076 US dollars. The European call option on the euro with the same expiration date as the payable has a strike price of USD 2.2759 and a premium of USD 0.12. In the same vein, a put option on the euro with a strike price of 2.2841 has a premium of 0.12. The company prefers to hedge its transaction exposure using financial instruments that provide flexibility. Assume that on the due date of the account payable, the spot rate is USD 1.95/EUR. The net amount paid in USD by the company if it acts rationally would be: a. 1,639,950 .b. 1,740,870 c. 2,041,612 d. 1,459,892

Answers

The net amount paid in USD by the company if it acts rationally would be 1,740,870 USD, which corresponds to option b. To hedge its transaction exposure using flexible financial instruments, Pretoza Inc. should use options.

Since the company has a payable, it would choose a European call option to buy euros at the strike price.
Step 1: Calculate the cost of the call option premium
Option premium (USD 0.12) * payable amount (841,000 EUR) = 100,920 USD
Step 2: Determine whether to exercise the call option or use the spot rate
On the due date, the spot rate is USD 1.95/EUR, which is lower than the call option's strike price (USD 2.2759). It's more advantageous to use the spot rate.
Step 3: Calculate the net amount paid in USD using the spot rate
Payable amount (841,000 EUR) * spot rate (USD 1.95) = 1,639,950 USD

Step 4: Add the cost of the call option premium
Total amount paid = 1,639,950 USD + 100,920 USD = 1,740,870 USD
The net amount paid in USD by the company if it acts rationally would be 1,740,870 USD, which corresponds to option b.

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insurance coverage of employees who handle financial statements, records, and cash is called

Answers

The insurance coverage of employees who handle financial statements, records, and cash is called "fidelity bond" or "employee dishonesty insurance". This type of insurance protects the employer against any financial loss caused by fraudulent or dishonest acts committed by the employees.

Fidelity bonds typically cover theft, embezzlement, forgery, and other criminal acts that may result in financial loss. It is important for companies to have this type of coverage to safeguard their financial assets and protect against potential liabilities. It is also a requirement for certain industries and government contracts. Fidelity bonds can be purchased as a standalone policy or added as an endorsement to a commercial insurance policy.

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1. Petrochemical Parfum (PP), which counts heavy fuel oil as one of its major inputs, is concerned about the possibility of an increase in the price of the heavy oil. (i) Discuss the several ways in which PP can protect itself against an increase in the price of crude oil by using either options or futures contracts. (20 marks) (ii) Make use of payoff diagrams to demonstrate and explain how the payoffs in each scenario would change depending on whether the price of oil was $70 or $90 per barrel. (20 marks) (iii) Rather than using options to reduce risk, what are the pros and cons of employing futures in PP's risk management strategy? (10 marks)

Answers

The ways to protect against an increase in the price of crude oil using options or futures contracts:

Options Contracts:

a. Call Options

b. Put Options

Futures Contracts:

a. Long Futures Position

b. Short Futures Position

What is the price of crude

Options is one that allow buying/selling of crude oil at a set price within a time frame.

a. PP can buy call options on crude oil to purchase oil at a predetermined strike price if oil prices rise. This secures PP from price hikes by fixating the buying cost.

b. PP can buy put options on crude oil to sell at a strike price if the oil price drops. It hedges against price declines with a minimum selling price.

Futures contracts:  PP can use futures contracts in several ways, including: PP can buy crude oil futures for a long position. Higher oil prices increase futures contract value, offsetting purchase costs.

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i) Petrochemical Parfum (PP) can secure against oil cost increments utilizing alternatives or prospects.

ii) Payoff diagrams appear how payoffs alter with oil costs. Prospects offer coordinated support but come with commitments, whereas choices give adaptability at a premium.

iii) The choice depends on the hazard profile and advertising viewpoint.

How to determine the increase in the price of Petrochemical parfum

(i) Petrochemical Parfum (PP) can ensure itself against an increment within the cost of rough oil utilizing choices or prospects contracts.

Choices: PP can buy call choices, giving the correct to buy oil at a foreordained cost (strike cost) inside a particular period. In the event that the oil cost rises, PP can work out the choice and purchase at a lower cost, supporting the increment.

Prospects: PP can enter into prospects' contracts, obligating them to purchase oil at a foreordained cost on a future date. By locking in a cost, PP fences against cost increments, guaranteeing a settled taken a toll for their input.

(ii) Payoff diagrams can demonstrate payoffs totally different scenarios. Accepting PP may be a buyer of alternatives or prospects:

For a call alternative: On the off chance that the oil cost is $70 per barrel, the payoff depends on the strike cost. In case the strike cost is lower, PP picks up from working out the alternative. In the event that the cost is $90 per barrel, PP's payoff is higher, as they can purchase at a lower strike cost.

For a prospects contract: The payoff is the distinction between the advertising cost and contracted cost. In the event that the cost is $70 per barrel, and the contracted cost is lower, PP picks up. Essentially, in the event that the cost is $90 per barrel, the payoff is indeed higher.

(iii) Stars of utilizing prospects contracts incorporate coordinate supporting, tall liquidity, standardized contracts, and simple position administration. Prospects offer a settled cost for future conveyance, giving a clear fence against cost changes.

Cons incorporate the commitment to fulfill the contract, potential conveyance or capacity issues, and edge prerequisites. Prospects need the adaptability of choices and bolt PP into a particular contract.

Choosing between choices and prospects depends on PP's chance profile, showcase viewpoint, and adaptability needs. Alternatives give more customization and lower forthright costs but come with a premium. Prospects offer a coordinated fence but require cautious administration of legally binding commitments.

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Suppose that the Turkish economy in long-run equilibrium has an inflation rate, π, of 12% per year and a natural unemployment rate, u, of 8%. The expectations-augmented Phillips curve is π = ²-2(uu). Assume that Okun's law holds so that a 1 percentage point increase in the cyclical unemployment rate maintained for one year reduces GDP by 2% of full- employment output. a. Consider a two-year disinflation. In the first year = 0.06 and π = 0.1. In the second year π = 0.06 and π = 0.06. in the first year, what is the unemployment rate? By what percentage does output fall short of full- employment output? In the second year, what is the unemployment rate? By what percentage does output fall short of full-employment output? What is the sacrifice ratio for this disinflation?

Answers

(a) To derive and illustrate Alice's indifference curves, we need to consider her utility function u(t, y) = V

Indifference curves represent different combinations of goods t and y that provide Alice with the same level of utility. Since the utility function is constant, Alice's indifference curves will be straight lines parallel to the t-y axis.(b) To derive Alice's optimal bundle when Pr = 2, Py = 4, and m = 24, we need to maximize her utility subject to her budget constraint. The optimization problem can be stated as follows: Maximize u(t, y) = Vsubject to Pt * t + Py * y = m

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Thunderhorse Oil. Thunderhorse Oil is a U.S. oil company. Its current cost of debt is 7.30%, and the 10-year U.S. Treasury yield, the proxy for the risk-free rate of interest, is 3.70%. The expected return on the market portfolio is 7.80%. The company's effective tax rate is 40%. Its optimal capital structure is 65% debt and 35% equity. a. If Thunderhorse's beta is estimated at 1.70, what is Thunderhorse's weighted average cost of capital? b. If Thunderhorse's beta is estimated at 1.20, significantly lower because of the continuing profit prospects in the global energy sector, what is Thunderhorse's weighted average cost of capital?

Answers

Thunderhorse Oil's weighted average cost of capital (WACC) is 7.92%, with a beta of 1.30. VThe WACC for Thunderhorse Oil falls to 7.39% with a lower beta of 0.90. The WACC is an important financial indicator that shows the typical rate.

Return required by an organisation to cover the cost of capital..It is employed to assess investment possibilities and choose the proper discount rate for potential future cash flows. The cost of debt and equity, as well as Thunderhorse Oil's capital structure.

WACC, or weighted average cost of capital

WACC is calculated as (Equity Weight * Equity Cost) + (Debt Weight * Debt Cost).

Considering a capital structure with 25% ownership and 75% debt:

WACC = (0.25 * 9.76%) + (0.75 7.30%)

WACC = 2.44% + 5.48%

WACC = 7.92%

b. The WACC computation will be different with a beta of 0.90.

Price of Equity

Applying the CAPM

Equity Cost = 3.0% + 0.90* (8.20% − 3.0%)

Equity Cost = 3.0% + 0.90* = 5.20%

Equity Cost = 7.68%

WACC is equal to 0.25 * 7.68% plus 0.75 * 7.30%.

WACC = 1.92% + 5.47%

WACC = 739%.

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T-bills currently yield 4.0 percent. Stock in Danotos Manufacturing is currently selling for $77 per share. There is no possibility that the stock will be worth less than $70 per share in one year. a-1. What is the value of a call option with a $60 exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a- What is the intrinsic value? (Do not round intermediate calculations and round your 2. answer to the nearest whole number, e.g., 32.) b- What is the value of a call option with a $48 exercise price? (Do not round 1. intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b- What is the intrinsic value? (Do not round intermediate calculations and round your 2. answer to the nearest whole number, e.g., 32.) C-1. What is the value of a put option with a $60 exercise price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) C- What is the intrinsic value? (Do not round intermediate calculations and round your 2. answer to the nearest whole number, e.g., 32.) es a-1. Call option value a-2. Intrinsic value b-1. Call option value b-2. Intrinsic value C-1. Put option value C-2 Intrinsic value

Answers

a-1. The value of C = 77 * N(d1) - 60 * [tex]e^-^0^.^0^4[/tex]  * N(d2) .

a-2. The Intrinsic Value of the product is  Max(0, 77 - 60).

b-1 . The value of call in option is C = 77 * N(d1) - 48 *  [tex]e^-^0^.^0^4[/tex]  * N(d2).

b-2. The  Intrinsic Value of the product is  Max(0, 77 - 48).

c-1.  The value of P=  60 * [tex]e^-^0^.^0^4[/tex] * N(-d2) - 77 * N(-d1).

c-2.  The  Intrinsic Value of the product is Max(0, 60 - 77)

To calculate the option values and intrinsic values, we need to use the Black-Scholes option pricing model. The formulas are as follows:

Call Option Value:

C = S * N(d1) - X * [tex]e^-^r^t[/tex] * N(d2)

Intrinsic Value:

Intrinsic Value = Max(0, S - X)

Put Option Value:

P = X *  [tex]e^-^r^t[/tex]  * N(-d2) - S * N(-d1)

Intrinsic Value:

Intrinsic Value = Max(0, X - S)

Where:

S = Stock price = $77

X = Exercise price

r = Risk-free interest rate = 4% or 0.04

t = Time to expiration = 1 year

N(d) = Cumulative standard normal distribution function

d1 = (ln(S/X) + (r + (σ²)/2) * t) / (σ * sqrt(t))

d2 = d1 - σ * sqrt(t)

σ = Stock's standard deviation (not provided)

a-1. Call option value with $60 exercise price:

Using the given formula:

d1 = (ln(77/60) + (0.04 + (σ²)/2) * 1) / (σ * sqrt(1))

d2 = d1 - σ * sqrt(1)

C = 77 * N(d1) - 60 * [tex]e^-^0^.^0^4[/tex]  * N(d2)

a-2. Intrinsic value with $60 exercise price:

Intrinsic Value = Max(0, 77 - 60)

b-1. Call option value with $48 exercise price:

Using the given formula:

d1 = (ln(77/48) + (0.04 + (σ²)/2) * 1) / (σ * sqrt(1))

d2 = d1 - σ * sqrt(1)

C = 77 * N(d1) - 48 *  [tex]e^-^0^.^0^4[/tex]  * N(d2)

b-2. Intrinsic value with $48 exercise price:

Intrinsic Value = Max(0, 77 - 48)

c-1. Put option value with $60 exercise price:

Using the given formula:

d1 = (ln(77/60) + (0.04 + (σ²)/2) * 1) / (σ * sqrt(1))

d2 = d1 - σ * sqrt(1)

P = 60 * [tex]e^-^0^.^0^4[/tex] * N(-d2) - 77 * N(-d1)

c-2. Intrinsic value with $60 exercise price:

Intrinsic Value = Max(0, 60 - 77)

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You are a Finance Manager for a major utility company.
Respond to the following in a minimum of 175 words:
Think about some of the capital budgeting techniques you might use for some upcoming projects.
Discuss at least 2 capital budgeting techniques and how your company can benefit from the use of these tools.
Compare your approaches to other students’ responses. How were they similar or different? Why might you use the different approaches shared by your classmates?

Answers

The techniques can provide valuable insights into the profitability and feasibility of upcoming projects are:

Net Present Value (NPV)Internal Rate of Return (IRR)

What is the budgeting techniques?

As Finance Manager for a utility company, I would use NPV and IRR for capital budgeting. These methods above offer insights on upcoming project profitability and feasibility.

NPV considers time value of money in capital budgeting. Calculates expected cash flows and subtracts initial investment. A positive NPV means profitable project. Using NPV helps my company make profitable investments. IRR helps determine a project's rate of return. IRR comparison assesses project appeal.

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Part A: (10 marks) Ahlia, Inc. has budgeted direct materials purchases of $400,000 in March and $300,000 in April. Past experience indicates that the company pays for 40% of its purchases in the month of purchase and the remaining 60% in the next month. Other costs are all paid during the month incurred. During April, the following items were budgeted: Wages expense $130,000 Purchase of office equipment 210,000 Selling and administrative expenses 126,000 Depreciation expense 18,000 Instructions Compute the amount of budgeted cash disbursements for April.

Answers

The amount of budgeted cash disbursements for April will be approximately  $664,000.

To compute the amount of budgeted cash disbursements for April, we need to consider the timing of payments for each expense.

Wages expense; The wages expense of $130,000 is typically paid during the month incurred, so the full amount will be disbursed in April.

Purchase of office equipment; The purchase of office equipment for $210,000 is a one-time expense, and it is not mentioned whether it is paid in the month of purchase or over a period of time. Assuming it is paid in full during the month of purchase, the full amount of $210,000 will be disbursed in April.

Selling and administrative expenses; The selling and administrative expenses of $126,000 are typically paid during the month incurred. Therefore, the full amount will be disbursed in April.

Depreciation expense; Depreciation expense of $18,000 is a non-cash expense and does not require a cash disbursement.

Now let's calculate the cash disbursements for direct materials purchases;

March purchases: $400,000 x 40% = $160,000 will be disbursed in March.

April purchases: $300,000 x 60% = $180,000 will be disbursed in April.

Finally, we can calculate the total budgeted cash disbursements for April by summing up the cash disbursements for each expense:

Total cash disbursements = Wages expense + Purchase of office equipment + Selling and administrative expenses + Depreciation expense + April purchases

= $130,000 + $210,000 + $126,000 + $18,000 + $180,000

= $664,000

Therefore, the amount of budgeted cash disbursements for April is $664,000.

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what are three major project components that are worked out during the planning phase?

Answers

Answer:The three major project plan are-scope,budget,timeline.

Explanation:

Scope. The scope determines what a project team will and will not do. It takes the team's vision, what stakeholders want and the customer's requirements and then determines what's possible. As part of defining the project scope, the project manager must set performance goals.

Budget. Project managers look at what manpower and other resources will be required to meet the project goals to estimate the project's cost.

Timeline. This reveals the length of time expected to complete each phase of the project and includes a schedule of milestones that will be met.

During the planning phase of a project, there are three major components that are typically worked out. The first is the project scope, which outlines the goals, objectives, deliverables, and constraints of the project.

This helps to ensure that everyone involved in the project has a clear understanding of what needs to be achieved and what limitations exist. The second component is the project schedule, which establishes timelines, deadlines, and milestones for the project. This helps to ensure that the project stays on track and that everyone involved is aware of key dates and deadlines. Finally, the third component is the project budget, which outlines the financial resources required for the project and how they will be allocated. This helps to ensure that the project is financially viable and that resources are being used efficiently.

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The firm Turf plans to acquire Chit, another firm in the same industry. Both firms are financed entirely by equity and have the same business risk. There are no taxes or other market imperfections.
Turf Chit
Price per share 9 4.40
Number of shares 20,000,000 10,000,000
Turf is considering 2 possible acquisition methods: a share exchange or a cash acquisition financed by borroqing. The acquisition will result in expected operating cost savings for the merged (post-acquisition) firm with a total present value of $45 million. Reorganisation costs for the merged business will have a present value of $10 million, regardless of the acquisition method.
Suppose Turf offers new shares in itself in exchange for Chit entire 10million shares.
(A) WHat will be the value of the merged firm? What is the maximum number of shares that Turf should offer, such that existing shareholders will not be worse off?

Answers

To determine the value of the merged firm and the maximum number of shares Turf should offer in the share exchange, we need to consider the value created through cost savings and the impact on existing shareholders.

The value of the merged firm can be calculated as the sum of the individual firm values plus the present value of the expected cost savings:

Value of the merged firm = Value of Turf + Value of Chit + Present value of cost savings

Given that both Turf and Chit have the same business risk and are financed entirely by equity, their values can be calculated using the price per share and the number of shares:

Value of Turf = Price per share (Turf) * Number of shares (Turf)

Value of Chit = Price per share (Chit) * Number of shares (Chit)

To ensure that existing shareholders are not worse off after the share exchange, the value of the merged firm should be equal to the sum of the individual firm values before the acquisition:

Value of the merged firm = Value of Turf + Value of Chit

Therefore, the maximum number of shares that Turf should offer in the share exchange would be the difference between the value of Chit and the present value of cost savings divided by the price per share of Turf:

Max shares to offer = (Value of Chit - Present value of cost savings) / Price per share (Turf)

By offering this maximum number of shares, Turf ensures that the value of the merged firm remains the same as the sum of the individual firm values, and existing shareholders are not worse off.

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(a) Your investment advisor expects that interest rate will fall due to economic recession this year. Your parents decide to buy a bond as a major source of income to support their livings and also to see capital gain from it. After visiting the bank's website, they are interested to buy ONE of the 2 bonds below with yield to maturity of 5% and par value of $1,000: A B Bond Coupon rate Time to maturity 0% 6% (paid annually) 3 years 1 year (1) Which ONE they should buy? Explain with calculations. (ii) After your parents bought bond in (i), the bond yield decreases by 30 basis points immediately because the central bank cuts interest rate. Calculate the new bond price based on duration.

Answers

(i) To determine which bond your parents should buy, we need to compare the present values of the cash flows from each bond.

For Bond A:

Since it has a 0% coupon rate, the only cash flow your parents will receive is the par value of $1,000 at maturity. The present value of this cash flow can be calculated using the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the yield to maturity, and n is the number of years to maturity. Plugging in the values, we have: PV(A) = $1,000 / (1 + 0.05)^3 = $863.84.

For Bond B:

With a 6% coupon rate paid annually, your parents will receive coupon payments of $60 every year for 3 years, in addition to the par value of $1,000 at maturity. To calculate the present value of these cash flows, we need to discount each cash flow individually and sum them up. Using the formula: PV = C / (1 + r)^n, where C is the coupon payment, r is the yield to maturity, and n is the number of years to each cash flow, we can calculate the present value of the cash flows from Bond B. The present value of the coupon payments can be calculated as follows: PV(coupons) = $60 / (1 + 0.05) + $60 / (1 + 0.05)^2 + $60 / (1 + 0.05)^3 = $166.33. The present value of the par value is already given as $1,000. So, the total present value of the cash flows from Bond B is: PV(B) = PV(coupons) + PV(par value) = $166.33 + $1,000 = $1,166.33.

Comparing the present values, we can see that Bond B has a higher present value ($1,166.33) compared to Bond A ($863.84). Therefore, your parents should buy Bond B.

(ii) To calculate the new bond price based on duration, we need to use the formula: New Bond Price = Bond Price / (1 + Δy), where Δy is the change in yield, expressed as a decimal, and Bond Price is the original price of the bond.

Assuming the original bond price (from Bond B) is $1,166.33 and the change in yield is 0.003 (30 basis points = 0.003), we can calculate the new bond price as follows: New Bond Price = $1,166.33 / (1 + 0.003) = $1,162.14.

Therefore, the new bond price after the decrease in yield is $1,162.14.

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Answer the following question:
The firm is expected to have after-tax operating earnings of $320 million in year 6 and these earnings are expected to grow 2.5% a year in perpetuity. The firm is also expected to have a return on capital of 8% and a cost of capital of 5% in perpetuity. Estimate the terminal value of the firm at the end of year 5 in million dollars.

Answers

To estimate the terminal value of the firm at the end of year 5, we need to calculate the present value of the perpetuity of after-tax operating earnings beyond year 5. The terminal value of the firm at the end of year 5 would be $13,120 million, or $13.12 billion.

Given that the firm is expected to have after-tax operating earnings of $320 million in year 6 and these earnings are expected to grow 2.5% annually, we can use the Gordon Growth Model to calculate the perpetuity value.

The Gordon Growth Model formula is: Terminal Value = (Year 6 Earnings * (1 + Growth Rate)) / (Cost of Capital - Growth Rate)

Plugging in the values:

Terminal Value = ($320 million * (1 + 0.025)) / (0.05 - 0.025)

Terminal Value = ($320 million * 1.025) / 0.025

Terminal Value = $13,120 million

Therefore, the terminal value of the firm at the end of year 5 would be $13,120 million, or $13.12 billion, in million dollars. This represents the present value of the perpetuity of after-tax operating earnings beyond year 5, discounted at the cost of capital rate of 5%.

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Which of the following explains the recent decline in union membership in the United States?

Answers

The recent decline in union membership in the United States can be attributed to the change from a manufacturing to a service-based economy. The correct option is a.

Historically, unions have had a strong presence in industries such as manufacturing, where large numbers of workers were concentrated in specific locations, making it easier to organize and collectively bargain for better wages, benefits, and working conditions.

However, with the decline of manufacturing and the rise of the service sector, which includes industries like retail, healthcare, and hospitality, the composition of the workforce has changed significantly.

Service-based industries tend to have a more decentralized and fragmented workforce, with workers spread across various locations and often employed in smaller establishments.

This presents challenges for traditional union organizing efforts, as it is more difficult to gather and mobilize workers in these settings.

Furthermore, service sector jobs often have high turnover rates and a significant portion of part-time or temporary employment, which can make it harder to sustain union membership and engagement.

Another contributing factor to the decline in union membership is the increasing market concentration in many industries. As large corporations and conglomerates gain more power and influence, they have been able to resist unionization efforts more effectively.

These powerful entities often have greater resources to hire anti-union consultants, lawyers, and engage in aggressive union avoidance strategies.

Their ability to exert pressure and influence over workers, combined with the weakened labor laws and enforcement in recent decades, has made it harder for unions to organize and maintain membership.

While technological changes have undoubtedly affected the labor market, they have not necessarily contributed to the decline in union membership.

In some cases, automation and technological advancements have led to job losses, but they have also created new industries and opportunities. The impact of technology on unionization largely depends on how it is managed and the responses of both employers and workers.

An increase in female participation in the job market has not directly led to the decline in union membership. In fact, women have been joining unions and participating in labor movements, advocating for better working conditions and gender equality.

However, it is worth noting that the composition of the workforce has changed with more women employed in service-based industries where unionization rates have historically been lower.

When workers have access to robust social protections, such as unemployment benefits, healthcare, and retirement security, they may be less inclined to seek union representation. However, it is important to note that this factor is just one piece of a complex puzzle and should not be seen as the sole cause for declining union membership.

In conclusion, while several factors contribute to the recent decline in union membership in the United States, the shift from a manufacturing to a service-based economy stands out as a significant driver. The correct option is a.

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Complete question :

Which of the following explains the recent decline in union membership in the United States?

O a. the change from a manufacturing to a service-based economy

O b. increasing market concentration

O c. slower technological changes

O d. an increase in female participation in the job market

O e. availability of smaller government safety nets

At the beginning of the year, Ron Weasley Inc. had supplies (an asset) amounting to $820. During the year, Ron Weasley Inc. purchased supplies for $1,500 cash. When the supplies were purchased, Ron Weasley Inc. debited supplies expense (not supplies) for $1,500. At the end of the year, Ron Weasley Inc. had $990 of supplies on hand. Consequently, Ron Weasley Inc. would record which one of the following adjusting entries at the end of the year: a) Debit supplies expense for $170 and credit supplies for $170 O b) Debit supplies expense S510 and credit supplies for $510 c) Debit supplies for $1.500 and credit supplies expense for $1,500 d) Debit supplies for $170 and credit supplies expense for $170

Answers

Debit supplies expense for $170 and credit supplies for $170. This adjusting entry is necessary because the supplies on hand at the end of the year need to be reflected accurately in the financial statements. The correct answer is option A.

The beginning balance of supplies was $820, and $1,500 of supplies were purchased during the year, making a total of $2,320. However, since only $990 of supplies were on hand at the end of the year, it means that $1,330 worth of supplies were used up during the year.

Therefore, supplies expense needs to be adjusted by $1,330 to reflect the true cost of supplies used during the year, and supplies need to be adjusted to reflect the remaining amount on hand, which is $990.

The adjusting entry for this would be a debit to supplies expense for $170 and a credit to supplies for $170.The answer is A.

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Outline and discuss in detail a relevant example of any company
or organisation to illustrate the importance of function of
management with around 400 words

Answers

Management is a vital function in any company or organization. It involves planning, organizing, leading, and controlling resources to achieve organizational goals. A relevant example of the importance of the function of management is the McDonald's Corporation.

McDonald's is a global fast-food restaurant chain that operates in over 100 countries. The company's success can be attributed to effective management practices. McDonald's has a clear mission statement, which is to provide customers with quality food and service at an affordable price. The company's management team is responsible for implementing strategies that align with this mission statement.

One of the key functions of management at McDonald's is planning. The company has a comprehensive planning process that involves setting goals, analyzing market trends, and developing strategies to achieve those goals. The planning process ensures that the company is always innovating and improving its products and services.

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Requirement a. What were​ Long-Term Liabilities on ​1/31/23​?
Long-Term Liabilities on 1/31/23 =
Part 2 Requirement b. What was the total of​ Property, Plant, and Equipment on
​1/31/22​?
Property, Plant, and Equipment on 1/31/22 =
Part 3 Requirement c. What was​ Stockholders' Equity on​1/31/23​?
Stockholders' Equity on 1/31/23 =
Balance Sheet Data
1/31/22
1/31/23
Retained Earnings
$1,100
$1,300
Investments
$400
$700
Long-Term Liabilities $1,100??
Property, Plant, and Equipment?

Answers

Requirement a. Long-Term Liabilities on 1/31/23 = $1,100

Requirement b. Property, Plant, and Equipment on 1/31/22 = The information for Property, Plant, and Equipment on 1/31/22 is not provided in the given balance sheet data. Without that information, we cannot determine the specific value for Property, Plant, and Equipment on that date.

Requirement c. Stockholders' Equity on 1/31/23 = The information for Stockholders' Equity on 1/31/23 is not provided in the given balance sheet data. Without that information, we cannot determine the specific value for Stockholders' Equity on that date.

Please note that the values for Property, Plant, and Equipment on 1/31/22 and Stockholders' Equity on 1/31/23 are missing from the provided data, so we cannot provide those specific values.

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A put option on yen is written with a strike price of yen 105.00/$. Which spot price maximizes your profit if you choose to exercise the option before maturity? yen 100/$ yen 105/$ yen 110/$ yen 115/$ None of the above

Answers

The spot price that maximizes your profit when exercising a put option with a strike price of yen 105.00/$ before maturity is yen 105/$.

If the spot price is lower than the strike price, you can make a profit by exercising the option and selling yen at the higher strike price. If the spot price is higher than the strike price, it would not be profitable to exercise the option. Therefore, the answer is yen 105/$. None of the other options would maximize your profit.

A put option on yen with a strike price of yen 105.00/$ allows the holder to sell yen at this price. To maximize profit when exercising the option before maturity, you should aim for a lower spot price. In the given choices, yen 100/$ is the lowest and would maximize your profit. So, the correct answer is yen 100/$.

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Bavarian Sausage has the following details. Sales: $525,000 COGS: $215,000 AR: $125,000 AP: $185,000 Net Income: $126,000 What is the Profit margin? What is the Average Collections Period?

Answers

The Profit Margin of Bavarian Sausage is and the Average Collections Period is

Profit margin is calculated by dividing the net income by sales as a measure of percentage.

Profit Margin = Net Income / Sales × 100

Profit Margin = $126,000 / $525,000 × 100

Profit Margin =24%

Average Collections Period is calculated by dividing the Accounts receivable (AR) by average daily sales.

Average Daily Sales = Sales / 365

Average Daily Sales = $525,000 / 365

Average Daily Sales ≈ $1,438.36

Average Collection Period = AR / Average Daily Sales

Average Collection Period = $125,000 / $1,438.36

Average Collection Period ≈ 86.84 days

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"Is that food delivery riders deliver incorrect orders
are ethical?pls explain your answers

Answers

No, food delivery riders delivering incorrect orders cannot be considered ethical.

Ethical behavior in any profession requires adhering to principles of honesty, integrity, and professionalism. When a delivery rider delivers incorrect orders, it goes against these principles. Customers rely on accurate and timely delivery of their orders, and any errors can lead to inconvenience, dissatisfaction, and even potential health risks if allergies or dietary restrictions are not taken into account.

Ethical conduct entails taking responsibility for ensuring accurate deliveries and promptly rectifying any mistakes made. It is important for delivery riders to prioritize accuracy and customer satisfaction to maintain trust and uphold ethical standards in their profession.

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(c) Examine the determinants of online Peer-to-Peer (P2P) lending. I [10 [11

Answers

The determinants of online peer-to-peer (P2P) lending include technological infrastructure and a supportive regulatory environment.

A robust technological infrastructure, encompassing secure payment systems and efficient loan origination processes, is crucial for the functioning of P2P lending platforms. Additionally, a favorable regulatory environment that balances consumer protection with innovation is essential.

Regulations addressing licensing, risk management, investor protection, and transparency contribute to building trust and confidence among participants.

These factors collectively contribute to the growth and success of online P2P lending by providing a reliable and efficient platform for borrowers and lenders to connect and transact.

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The town council of Frostbite, Ontario, is trying to decide whether to build an outdoor skating rink which would cost S1 million and last for only one season. Operating costs would be zero. Yearly passes would be sold to anyone who wanted to use the rink. If p is the price of the pass in dollars, the number demanded would be q 1200-0.6p. The council has asked you to advise them on building the rink. Your report should say that A) revenue won't cover construction costs at any ticket price. There is no way to B) if the rink is built and price is set to maximize profits, the town makes a profit and C) if the rink is built and price set to maximize profits, the town makes a profit but D) there is no price at which ticket revenues still cover costs, but total consumer surplus E) None of the above increase total consumer surplus by building the rinlk consumers will be better off consumers are worse off than without a rink. from the rink exceeds costs.

Answers

Based on the information provided, we can analyze the different scenarios and advise the town council of Frostbite, Ontario, regarding the construction of the outdoor skating rink.

The equation for the number of passes demanded, q, is given as q = 1200 - 0.6p, where p is the price of the pass in dollars.

A) Revenue won't cover construction costs at any ticket price: In this scenario, we need to determine if the total revenue generated from selling passes would be sufficient to cover the construction cost of S1 million. Since there are no operating costs, the revenue from pass sales is the only source of income. However, based on the given demand equation, the revenue generated (p * q) would not be enough to cover the construction costs regardless of the ticket price. Therefore, we can conclude that revenue won't cover construction costs at any ticket price.

Therefore, the correct answer is A) Revenue won't cover construction costs at any ticket price.

B), C), D), and E) are not applicable since they involve scenarios where the town makes a profit or there is a possibility of consumer surplus, which is not the case based on the given information.

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Compare total profits and the total output in the Cournot equilibrium to a monopolist's profit- maximising choices (assuming the same demand, zero fixed costs and the same constant marginal costs). In Cournot equilibrium, • total output is • total profits are

Answers

Monopoly is a single-firm market where the singular firm has full command over the market and the result it produces is lower than some other market structure and the cost it charges is higher than some other market structure.

Cournot is a market circumstance where there are two firms and the result here is more prominent than the restraining infrastructure yield as the two firms produce more than the single firm result. Cost charges are beneath the syndication cost and subsequently, the benefit is additionally underneath the restraining infrastructure benefits.

Hence, in course equilibrium total output is higher than monopoly and total profits are lower than monopoly.

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This question is not complete, Here I am attaching the complete question:

Compare total profits and the total output in the Cournot equilibrium to a monopolist's profit- maximising choices (assuming the same demand, zero fixed costs and the same constant marginal costs). In Cournot equilibrium,

total output is total profits are:

Which of the following statements is true about an adjustable-rate mortgage (ARM)?
It completely eliminates the interest risk of a lender
Lenders and borrowers share the interest rate risk
It eliminates default risk
Compared to a fixed-rate mortgage, it has higher interest rate risk to lender

Answers

The statement "Compared to a fixed-rate mortgage, it has higher interest rate risk to lender" is is true about an adjustable-rate mortgage.

What is  an adjustable-rate mortgage (ARM)

Adjustable rate mortgage (ARM) - alternatively known as a flexible rate mortgage, unlike conventional fixed interest mortgages that can leave little room for movement or negotiation over time ARMs let borrowers enjoy greater flexibility with their payment plans by allowing periodic adjustments to their interest rates based on predetermined indexes or benchmarks.

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Trace the passage of cash from the financial markets to the firm and from the firm back to the financial markets. A) 1. Cash flows to the firm from the financial market. 2. The firm invests the cash in current and fixed assets. 3. These assets generate cash. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders. B) 1. The firm invests the cash in current and fixed assets. 2. These assets generate cash. 3. The rest goes back to the financial markets as cash paid to creditors and shareholders. 4. Cash flows to the firm from the financial market. 5. Corporate taxes are paid. 6. Cash flow is reinvested in the firm. O c) C 1. The firm invests the cash in current and fixed assets. 2. These assets generate cash. 3. Cash flows to the firm from the financial market. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders. D) 1. The firm invests the cash in current and fixed assets. 2. Corporate taxes are paid. 3. These assets generate cash. 4. Cash flows to the firm from the financial market. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders. E) 1. The firm invests the cash in current and fixed assets. 2. Cash flows to the firm from the financial market. 3. These assets generate cash. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.

Answers

The correct option is A) 1. Cash flows to the firm from the financial market. 2. The firm invests the cash in current and fixed assets. 3. These assets generate cash. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.

The passage of cash from the financial markets to the firm and back involves several stages.

First, cash flows to the firm from the financial market, which can occur through various channels such as equity issuances, debt financing, or investments from venture capitalists.

Once the firm receives the cash, it invests it in current and fixed assets. These investments may include purchasing inventory, equipment, or real estate. The purpose is to utilize the funds to generate revenue and profit through the operations of the firm.

As the firm operates, these assets generate cash inflows in the form of sales revenue, rental income, or other sources of income. The generated cash is then used to cover various expenses, including operating costs, employee salaries, and interest payments on debt.

After the deduction of expenses, corporate taxes are paid to the government, as applicable based on the firm's taxable income. The remaining cash flow is reinvested in the firm for growth, expansion, or debt repayment.

Finally, the excess cash, after meeting the firm's needs, goes back to the financial markets as cash paid to creditors (interest and principal payments) and shareholders (dividends or stock buybacks). This enables investors, lenders, and shareholders to receive returns on their investments in the firm.

Overall, this process reflects the flow of cash from the financial markets to the firm for investment and operations, and the subsequent return of cash to the financial markets as payments to stakeholders.

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a bricks-and-mortar strategy includes marketing and selling goods and services on the internet. T/F

Answers

Internet marketing and online sales are part of a bricks-and-mortar strategy. This statement is false.

A brick-and-mortar strategy refers to a business model that primarily operates through physical locations, such as retail stores, offices, or service centers. This approach focuses on establishing a strong presence in the physical world and engaging with customers face-to-face.

On the other hand, marketing and selling goods and services on the Internet is commonly known as e-commerce or online retailing. It involves leveraging digital platforms, websites, and online marketplaces to reach customers and conduct transactions electronically.

While it is true that many businesses today employ a hybrid approach by combining both physical and online channels to maximize their reach and sales potential, it is important to differentiate between the two strategies. A brick-and-mortar strategy predominantly relies on physical locations, while online marketing and selling are part of an e-commerce or digital strategy.

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