The type of loan where a buyer can put down payment, carry seller's mortgage, and pay the remainder through mortgage is called seller financing. This type of financing is also known as owner financing. The buyer is financing the purchase of the property through the seller instead of a traditional lender.
Seller financing, also known as owner financing, is the type of loan where a buyer can put down payment, carry seller's mortgage, and pay the remainder through mortgage. This type of financing eliminates the need for a traditional lender to finance the property. It is beneficial for both parties as the buyer can make a purchase without having to go through the process of getting a loan from a bank, and the seller can earn a profit by providing financing. However, seller financing can be risky for the buyer as the seller may foreclose the property if the buyer fails to pay.
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A $2.00 decrease in a product's variable cost per unit accompanied by a $2.00 decrease in its selling price per unit will:
A) increase the contribution margin per unit
B) increase the total contribution margin
C) increase the break-even volume.
D) increase the operating leverage
E) increase the contribution margin ratio
F) decrease the contribution margin ratio
G) will have no effect on the contribution margin ratio.
YA $2.00 decrease in a product's variable cost per unit accompanied by a $2.00 decrease in its selling price per unit will increase the contribution margin per unit. Option A is the correct answer.
The contribution margin per unit is the difference between the selling price per unit and the variable cost per unit. In this scenario, both the variable cost per unit and the selling price per unit decrease by $2.00. As a result, the difference between them, which is the contribution margin per unit, will increase by $2.00.
This means that each unit of the product will contribute $2.00 more towards covering fixed costs and generating profit. It improves the profitability of each unit sold by increasing the amount available to cover fixed expenses. However, it is important to note that the total contribution margin (the contribution margin per unit multiplied by the number of units sold) may or may not increase, depending on the change in the number of units sold.
Option A is the correct answer.
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When there is structural unemployment, the real wage is: a) Rigid at a level below the market-clearing level, b) Rigid at the market-clearing level, c) Rigid at a level above the market-clearing level, d) Flexible
When there is structural unemployment, the real wage is rigid at a level above the market-clearing level. The real wage is defined as the wage paid to workers divided by the price level. The correct option is c.
In the case of structural unemployment, there is a mismatch between the skills of the unemployed and the available jobs in the market. This means that there are more workers looking for jobs than there are jobs available. The result of this situation is that employers can be pickier in choosing employees, and can thus offer lower wages.
However, since the wage is already low and workers are still unable to find jobs, it cannot go any lower, making it rigid. Hence, the real wage becomes rigid at a level above the market-clearing level.
An example of this situation is when workers in declining industries like coal mining or steel production lose their jobs and cannot find work in other fields because they lack the skills required. This leads to a higher real wage, which is the wage paid to workers divided by the price level.
The correct option is c.
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Starbucks supports literacy campaigns in every community in which it does business Starbucks wants to give back to the community in a meaningful way by doing this. Which of the following is a component of the pyramid of corporate social responsibility represented by the Starbucks literacy effort?
Corporate social responsibility (CSR) has four levels, according to the pyramid model. These are as follows: Philanthropic, Legal, Ethical, and Economic. In the context of Starbucks' literacy efforts, the philanthropic level is represented by the pyramid of corporate social responsibility.
Starbucks supports literacy campaigns in every community in which it does business. Starbucks wants to give back to the community in a meaningful way by doing this. Corporate social responsibility refers to a corporation's responsibility to provide benefits to the wider society, in addition to fulfilling its primary objective of profit-making.
In other words, it refers to a company's moral obligation to the society at large. This implies that Starbucks' literacy campaign is not driven by legal requirements or regulations, but rather by a genuine desire to give back to society by promoting literacy, which is a fundamental requirement for economic and social advancement.
It is important to remember that philanthropy in corporate social responsibility goes beyond charitable donations; it involves corporations using their resources, expertise, and skills to support and enhance societal well-being.
In conclusion, Starbucks literacy campaign aligns with the philanthropic component of the pyramid of corporate social responsibility. This reflects Starbucks’ moral obligation to contribute to societal well-being by providing educational resources to communities where they operate. Starbucks' literacy program is an example of a firm that has prioritized CSR as a crucial aspect of its operations, and this approach has assisted in creating a favorable brand image for the company.
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A machine has a first cost of 500.000 ₺ and a salvage value of 93.500 ₺ after n years. The book value at the end of 3rd year is calculated as 364.500 ₺. Find the value of ""n""? a) Assuming that straight line depreciation method is used. b) Assuming that double declining balance depreciation method is used. c) A car has a first cost of 240.000 ₺ and a salvage value of 81.250 ₺ after 8 years. What is the depreciation in the 5th (D5=?) year if you switch between depreciation methods (start with double declining balance and switch to straight line when necessary)? (DDB formulas: Dt=dB(1 – d)t-1 =dBVt-1 and BVt=B(1 – d)t )
A machine has a first cost of 500.000 ₺ and a salvage value of 93.500 ₺ after n years. The depreciation in the 5th year is 19,343.75.
First cost (FC) = 500,000
Salvage value (SV) = 93,500.
Book value after 3 years (BV) = 364,500.
We know that the depreciation per year (D) = (FC - SV) / n BV = FC - D × 3 years⇒ 364,500 = 500,000 - D × 3 years D = (500,000 - 364,500) / 3 = 45,500.
Now D = (FC - SV) / n45,500 = (500,000 - 93,500) / n n = 8.41 ≈ 8 (approx.)
First cost (FC) = 500,000 Salvage value (SV) = 93,500.
Double declining rate (d) = 2 / n At the end of 2nd year.
the book value (BV2) = FC × (1 - d)2= 500,000 × (1 - 2 / n)
Given, BV3 = 364,500.
By using BV2, we have BV2 × (1 - d) = 364,500BV2 = 428,125 (approx.)
Hence, BV2 × (1 - d) = 364,500428,125 × (1 - d) = 364,5001 - d = 364,500 / 428,125d = 0.15Now, d = 2 / n⇒ 0.15 = 2 / n. n = 13.33 ≈ 13 years.
Now, to switch from Double Declining Balance to Straight-Line in 3rd year, we need to find the book value at the end of the second year by DDB method.
Book Value after 3 years = BV3 = FC - D1 - D2 - D3= 240,000 - 60,000 - 45,000 - BV3 × d= 240,000 - 60,000 - 45,000 - (BV2 - D1) × d...[By using BV2 = FC × (1 - d)2]BV3 = 68,750.
Hence, 240,000 - 60,000 - 45,000 - (68,750 - 60,000) × 0.25 = 19,375.
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Suppose that the First United Bank of America has two loans. Each is due to be repaid one period hence and has independent and identically distributed cash flows. Each loan will repay $300 with a probability of 0.8 and $150 with a probability of 0.2. However, while the bank knows this, the investors cannot distinguish this loan from that of the Third TransAmerica Bank, which has the same number of loans, but will pay $300 with a probability of 0.5 and $150 with a probability of 0.5. There is a prior belief of 0.5 that the First United Bank of America has the higher-valued portfolio. Suppose that the First United wished to securitize these loans, and if it does so without a credit enhancement, the cost of communicating the true value is 7.5% of the true value. Assume that the discount rate is zero and that everybody is risk-neutral. Consider the following securitization scenario. The First United can create two classes of bondholders in a senior- subordinated structure or junior-senior structure. Class A bondholders will receive the first tranche and are entitled to $300 in aggregate. After they are paid off, class B bondholders are entitled to receive $300 or the residual cash flow, whichever is smaller. Suppose First United can find a credit enhancer. With credit enhancement, class B bondholders can be guaranteed to receive $300. The market for credit enhancement is competitive. Ignoring the possibility of default by the credit enhancer, how much will the First United have to pay the credit enhancer?
A. $122
B. $68
C. $60
D. $75
The First United have to pay the credit enhancer an amount equal to $75,After they are paid off, class B bondholders are entitled to receive $300 Therefore, the correct option is D
A bondholders is $300, which is guaranteed by the senior-subordinated structure. After class A bondholders have been paid off, class B bondholders will receive the lesser of $300 and $210 ($510 minus the $300 paid to class A bondholders).
This will occur with a probability of P. Let's assume that the credit enhancer agrees to pay class B bondholders $90 ($300 minus $210) in the event that they do not receive $300 in cash flows.The net present value of the cash flows for the enhanced structure is thus given by:
NPVenhanced = 300 + P * 90 (1)Now consider the unenhanced structure. After class A bondholders have been paid, class B bondholders will receive the lesser of $270 and $30 ($540 minus $300 paid to class
A bondholders and the $210 paid to class B bondholders if their cash flows are less than $300). This will occur with a probability of P. Therefore, the net present value of the unenhanced structure's cash flows is:
NPVunenhanced = 300 + P * 30 (2)The bank will be indifferent between the enhanced and unenhanced structures if their net present values are equal. As a result, we must solve for X in equation (1) equals equation (2).NPV enhanced = NPV unenhanced 300 + P * 90 = 300 + P * 30
Solving for P, we get:P = 2/3.Substituting this into either equation (1) or equation (2) and solving for X, we obtain:X = 75.Therefore, the First United would have to pay a credit enhancement fee of $75.
Therefore, the correct option is D. $75.
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A company's channels describe how it delivers its product or service to its customers.
- Businesses either sell direct, through intermediaries (such as distributors and wholesalers), or via a combination of both.
- Some firms employ a sales force that calls on potential customers to try to close sales. This is an expensive strategy but necessary in some instances
The techniques a business uses to provide its goods or services to clients are referred to as its channels. Direct sales and indirect sales through intermediaries are the two main strategies.
Without the use of middlemen, direct sales include selling to clients directly. Although this strategy gives businesses more control over the sales process, it may necessitate large infrastructure investments in marketing and distribution.
In contrast, indirect sales include reaching clients through middlemen like distributors, wholesalers, or retailers. As it makes use of the existing distribution networks of intermediaries, this strategy may be cost-effective. However, it can result in less control over the sales process and necessitate productive cooperation with middlemen.
Some businesses may use a sales force to meet with potential clients in person and clinch deals.
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if auditors are appointed on january 3, 2014, the date of the financial statements is december 31, 2014, the date of the auditors' report is february 7, 2015 and the audit report release date is march 3, 2015, what is the appropriate date of the written representations?
As per the given scenario, the date of the financial statements is December 31, 2014, and the date of the auditor's report is February 7, 2015. Therefore, the appropriate date of the written representations is December 31, 2014.
Financial statements refer to formal records of a company's financial activity, earnings, expenses, profits, and balance sheet for a specified period. It offers a picture of the overall financial status of the company. Financial statements comprise of the following:Statement of financial position: it shows the company's assets, liabilities, and equity at a particular period of time.
Statement of comprehensive income: it presents the revenue and expense of the company for a specified period.Statement of changes in equity: it summarizes the changes in the company's equity during the specified period.Cash flow statement: it reflects the company's inflow and outflow of cash during the period of time covered by the financial statements.
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28 Selected financial information for Frank Corporation is presented below. Selected 2020 transactions are as follows: a. Purchased investment securities for $6,400 cash. b. Borrowed $17,800 on a two-year, 8 percent interest-bearing note. c. During 2020, sold machinery for its carrying amount, received $13,100 in cash. d. Purchased machinery for $52,800: paid $10,400 in cash and signed a four-year note payable to the dealer for $42.400. e. Declared and paid a cash dividend of $11.400 on December 31, 2020. Selected account balances at December 31, 2019 and 2020 are as follows: December 31 2020 2019 Cash $85,800 $22,400 Accounts receivable Inventory 18,400 12,700 53,400 62,800 8,400 12,800 Accounts payable Accrued wages payable 1,500 2,400 Income taxes payable 6,400 3,700 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION statement of Earnings For the Year Ended December 31, 2020. Sales revenue $428,000 cost of sales 282,000 Gross profit 146,000 Expenses Salaries and wages $52,400 Depreciation 10,600 Rent (no accruals) 7,200
The financial information provided for Frank Corporation indicates several selected transactions and account balances for the year 2020. Here is a breakdown of the transactions and balances:
1. Purchased investment securities for $6,400 cash.
2. Borrowed $17,800 on a two-year, 8 percent interest-bearing note.
3. Sold machinery for its carrying amount, received $13,100 in cash.
4. Purchased machinery for $52,800: paid $10,400 in cash and signed a four-year note payable to the dealer for $42,400.
5. Declared and paid a cash dividend of $11,400 on December 31, 2020.
Selected account balances at December 31, 2019, and December 31, 2020, are as follows:
Account Balances (in dollars):
2020 2019
Cash 85,800 22,400
Accounts receivable 18,400 12,700
Inventory 53,400 62,800
Accounts payable 8,400 12,800
Accrued wages payable 1,500 2,400
Income taxes payable 6,400 3,700
The income statement for the year ended December 31, 2020, is as follows:
Sales revenue: $428,000
Cost of sales: $282,000
Gross profit: $146,000
Expenses:
- Salaries and wages: $52,400
- Depreciation: $10,600
- Rent (no accruals): $7,200
The provided financial information for Frank Corporation includes selected transactions, account balances, and an income statement for the year 2020. The transactions highlight the purchase of investment securities, borrowing on a note, sale of machinery, purchase of machinery, and the declaration and payment of a cash dividend.
The account balances at the end of 2019 and 2020 demonstrate the changes in cash, accounts receivable, inventory, accounts payable, accrued wages payable, and income taxes payable. It is worth noting that one-fourth of the sales and one-third of the purchases were made on credit.
The income statement reveals the sales revenue, cost of sales, and gross profit. Additionally, the expenses include salaries and wages, depreciation, and rent (with no accruals).
Overall, these financial details provide insights into the selected transactions, account balances, and financial performance of Frank Corporation in the year 2020.
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kellogg company (k) recently earned a profit of $3.92 earnings per share and has a p/e ratio of 20.20. the dividend has been growing at a 5 percent rate over the past few years. if this growth rate continues, what would be the stock price in four years if the p/e ratio remained unchanged? what would the price be if the p/e ratio declined to 14 in four years?
the stock price will be $33.74 if the P/E ratio remained unchanged and $23.16 if the P/E ratio declined to 14 in four years.
Given, Profits earned by Kellogg Company (K) = $3.92 per share P/E ratio = 20.20Dividend growth rate = 5% for the past few years
To find: Stock price in four years if the P/E ratio remained unchanged
Stock price in four years if the P/E ratio declined to 14Solution:
We know that, The price of a stock is given by, P = D / (K - G)Where, D = Dividend per share
K = Required rate of return G = Dividend growth rate P = Stock price
Therefore, the current stock price will be: P = $3.92 / (20.20) = $19.405
Let’s find the dividend per share after 4 years using the formula, D1 = D0 (1 + G)⁴
Where,D1 = Dividend per share after 4 yearsD0 = Current Dividend per share G = Dividend growth rateD1 = $3.92 (1 + 5%)⁴D1 = $4.78
Using the formula, P = D / (K - G)At P/E ratio remained unchanged, P = $4.78 / (20.20) - 5% = $33.74
If the P/E ratio declined to 14 in four years, the stock price will be:
P = $4.78 / (14) - 5% = $23.16 (approx)
Therefore, the stock price will be $33.74 if the P/E ratio remained unchanged and $23.16 if the P/E ratio declined to 14 in four years. The calculation is based on the given information about Kellogg Company.
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As compared to perfect competition, perfect price discrimination is a. In practice, perfect price discrimination is unlikely to occur for all of the following reasons except It is difficult to identify the willingness to pay of every buyer. b. It is difficult to prevent resale. c. It is illegal. d. Not many firms have sufficient monopoly power.
In practice, perfect price discrimination is unlikely to occur for all of the following reasons except it is illegal.
Perfect price discrimination refers to a pricing strategy where a firm charges each customer a price equal to their willingness to pay. This allows the firm to extract maximum consumer surplus and eliminate deadweight loss. However, perfect price discrimination is unlikely to occur in practice due to various reasons. It is difficult to identify the willingness to pay of every buyer, as individual preferences and valuations vary. It is also challenging to prevent resale, as customers may buy at a lower price and sell to others. Additionally, not many firms have sufficient monopoly power to implement perfect price discrimination effectively. However, the legality of perfect price discrimination depends on the jurisdiction, and it may be allowed in certain situations.
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On January 1, 2024, Clark Corporation signed a $200,000, two-year, 9% note. The loan required Clark to make payments annually on December 31 of $100,000 principal plus interest. 1. Journalize the issuance of the note on January 1, 2024 2. Journalize the first payment on December 31, 2024 (Record debits first, then credits. Select explanations on the last line of the journal entry) Journalize the issuance of the note on January 1, 2024 Date Accounts Accounts and Explanation Jan 1 Debit CUTE Credit
the interest expense is debited for $9,000, and the notes receivable is credited for $91,000 (principal minus interest).
On January 1, 2024, Clark Corporation signed a $200,000, two-year, 9% note. The loan required Clark to make annual payments on December 31 of $100,000 principal plus interest. Journalize the issuance of the note on January 1, 2024 and the first payment on December 31, 2024?Journalize the issuance of the note on January 1, 2024:
Jan 1, 2024 | Notes Receivable $200,000 | Notes Payable $200,000
Explanation: The journal entry records the issuance of a $200,000 note receivable by Clark Corporation.
Journalize the first payment on December 31, 2024:
Dec 31, 2024 | Notes Payable $100,000 | Interest Expense $9,000 | Notes Receivable $91,000
Explanation: The journal entry records the first payment on the note, which includes $100,000 principal and $9,000 interest. The notes payable is debited for $100,000,
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Is currency is a good store of value (in the short-run) in New Zealand when unemployment is consistently going down, and the Philipps curve relationship applies to New Zealand economy in the short-run?
True/false
The given statement " Currency is a good store of value (in the short-run) in New Zealand when unemployment is consistently going down, and the Philipps curve relationship applies to New Zealand economy in the short-run" is False.
In the short-run, when unemployment is consistently going down and the Phillips curve relationship applies, it typically implies a situation of decreasing inflationary pressures and potentially lower interest rates.
In such a scenario, the value of the currency may be negatively affected as lower interest rates can reduce its attractiveness for foreign investors seeking higher yields. Therefore, in this context, a currency may not be a good store of value in the short-run in New Zealand.
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Changing process mean will always improve capability. Justify your answer in support or against of the statement?
Reducing process variation is also important in achieving the desired process capability.
It is not always true that changing process mean will always improve capability. Although process mean is an important aspect in measuring process performance, other factors such as process variation and defects rate also play a vital role in determining the process capability. Process capability is the ability of a process to produce output that meets the customer's specification. It is determined by measuring the process performance in terms of process mean and standard deviation. In order to improve process capability, process mean needs to be shifted closer to the target value and the process variation needs to be reduced. However, changing the process mean does not always guarantee an improvement in process capability. If the process variation is still high, then there is still a risk of producing output that is out of specification. Therefore, it is important to reduce the process variation along with shifting the process mean to improve process capability. In conclusion, while changing process mean is an important aspect in improving process capability, it is not always enough. Reducing process variation is also important in achieving the desired process capability.
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Thursday, February 24, 2022 Russian invasion of Ukraine. The world eas surprised.
March 02, 2022 - The UN General Assembly overwhelmingly adopted a resolution on Wednesday demanding that Russia immediately end its military operations in Ukraine…where all 193 UN Member States have a voice. A total of 141 countries voted in favour of the resolution, which reaffirms Ukrainian sovereignty, independence and territorial integrity. Despite this, Russia continued with its aggression.
Odesa's port was a lifeline for Ukraine and a key player in global supply chains. Now, Russia's invasion and a blockade in the Black Sea have the city in a stranglehold.
The above quote is from NPR Europe and alludes to global supply chains and possible disruption.
Provide a brief background to the leadup of the Russian invasion of Ukraine.
Discuss whether or not the invasion was a form of market entry.
Analyze the rationale for the invasion.
Identify the ports in the Black Sea and the Sea of Azov and provide analysis as to their importance and the repercussions of the invasion.
Conclude with an explanation as to why there has been such inaction and / or hesitance on the part of NATO allies to engage in any meaningful action.
Background to the lead-up of the Russian invasion of Ukraine. The leadup to the Russian invasion of Ukraine started when the then Ukrainian President Viktor Yanukovych rejected a political and trade agreement with the European Union on November 21, 2013, and instead decided to strengthen ties with Russia.
This resulted in widespread protests across Ukraine, which came to be known as Euromaidan. Yanukovych was overthrown on February 22, 2014, after a deadly protest and the Russian Federation subsequently annexed Crimea in March 2014. Since then, there has been an ongoing armed conflict in the eastern part of Ukraine, which is still controlled by Russian-backed separatists.
Discussion on whether or not the invasion was a form of market entry. - The Russian invasion of Ukraine was not a form of market entry because the terms market entry and invasion are not interchangeable. Market entry involves a company entering a new market to sell its goods or services, while invasion involves the use of military force to occupy foreign territory. Therefore, the Russian invasion of Ukraine cannot be classified as a form of market entry.
Analysis of the rationale for the invasion- The Russian invasion of Ukraine was motivated by several factors. These include the desire to expand its territory and sphere of influence, to safeguard the interests of Russian-speaking people in Ukraine, to gain access to the Black Sea, and to weaken Ukraine's pro-Western government.
Identification of ports in the Black Sea and the Sea of Azov and analysis of their importance and the repercussions of the invasion- The ports in the Black Sea and the Sea of Azov include Odesa, Mykolaiv, Kherson, Mariupol, and Berdyansk. These ports are important because they provide access to the sea and serve as gateways to Ukraine's industrial heartland. They are also crucial for Ukraine's economy as they handle the export of goods such as grain, steel, and chemicals. The Russian invasion of Ukraine has led to a blockade of these ports, which has had severe economic consequences for Ukraine. The blockade has disrupted global supply chains and caused shortages of essential goods.
Conclusion on why there has been inaction and/or hesitance on the part of NATO allies to engage in any meaningful action- There has been inaction and/or hesitance on the part of NATO allies to engage in any meaningful action because of several factors. These include the reluctance to escalate the conflict, fear of Russian aggression, concern over the impact of sanctions on the global economy, and a lack of political will. Additionally, some NATO allies have economic ties with Russia, which further complicates the situation.
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Opening or closing a ventilation opening during a fire can change the behavior of the fire flow. True. False.
The given statement that "Opening or closing a ventilation opening during a fire can change the behavior of the fire flow" is true. How does ventilation affect a fire?
Ventilation in a fire can have a significant effect on fire growth and development. Ventilation, according to fire dynamics, refers to the movement of heat, smoke, and air between the inside and outside of a fire.
It can happen naturally, through windows, doors, and other openings in a structure, or it can be generated by the use of mechanical equipment. Natural ventilation is always present in a fire because of the building's layout and construction. What is the purpose of ventilation in a fire?
The purpose of ventilation is to manage fire and smoke by removing heat, smoke, and other gases, increasing or decreasing the air supply, and lowering the temperature.
Ventilation can assist in controlling fire development and extinguishing fires in particular circumstances. Opening or closing ventilation openings, such as doors, windows, and other openings, can have a significant effect on a fire's growth and development.
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The likelihood of an investment newsletter's successfully predicting the direction of the market for four consecutive years by chance should be
greater than 70%.
between 25% and 50%.
between 10% and 25%.
between 6% and 10%.
between 0% and 5%
According to the Binomial distribution, the probability of an investment newsletter successfully predicting the direction of the market for four consecutive years is 6.25%. Hence, the answer is "between 0% and 5%.
"How can we find the likelihood of an investment newsletter's successfully predicting the direction of the market for four consecutive years?The likelihood of an investment newsletter's successfully predicting the direction of the market for four consecutive years can be determined by employing the binomial probability formula.
Let P = the probability of predicting the direction of the market correctly for one year. Since the market direction can either go up or down, there is a 50/50 chance of making the right prediction.
Thus P = 0.5 (50/50).Now we have to find the likelihood of predicting the market direction correctly for four consecutive years. We can do this with the following formula:P(4) = C(4,4) × (0.5)⁴(0.5)⁰Where C(4,4) is the combination of 4 things taken 4 at a time, or 1.
It can also be written as 4! / (4 - 4)! 4! = 1 × 3 × 2 × 1 / 1 × 3 × 2 × 1 = 1This implies that P(4) = (1) × (0.5)⁴(0.5)⁰ = 0.0625 or 6.25%. Therefore, the likelihood of an investment newsletter successfully predicting the direction of the market for four consecutive years by chance should be between 0% and 5%.Thus,
Therefore the correct option is between 0% and 5%.
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This course is called Principles
of Finance! Please answer the questions in their entirety, if you
can not please do not accept this question! Please answer all of
the questions I post. Thank you for
Tony is offering Phil two repayment plans for a long overdue loan. Offer 1 is a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $5,000 at the end of each year at 10%
While Phil is said to have chosen offer 2, then Phil will take a time of 5 years to pay off the loan.
Phil owes Tony $20,000. Tony is offering Phil two repayment plans for a long overdue loan. Offer 1 is a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $5,000 at the end of each year at 10% interest rate until the loan principal is paid off.
Phil chose offer 2. We need to find out how long it will take Phil to pay off the loan if he takes Offer 2.Let x be the number of years it will take Phil to pay off the loan. The interest rate is 10% or 0.1 in decimal form.
After the first year, the amount Phil still owes is $20,000 - $5,000 = $15,000. After the second year, the amount Phil still owes is $15,000 + ($15,000 x 0.1) - $5,000 = $10,500. After the third year, the amount Phil still owes is $10,500 + ($10,500 x 0.1) - $5,000 = $6,550. After the fourth year, the amount Phil still owes is $6,550 + ($6,550 x 0.1) - $5,000 = $3,205. After the fifth year, the amount Phil still owes is $3,205 + ($3,205 x 0.1) = $3,525.50.Since the loan is paid off once the debt is zero, then $3,525.50 + ($3,525.50 x 0.1) = $3,878.05.
The debt is paid off in 5 years.
The complete question must be:
Tony is offering Phil two repayment plans for a long overdue loan. Offer 1 is a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $5,000 at the end of each year at 10% interest rate until the loan principal is paid off. Phil owes Tony $20,000. How long will it take for Phil to pay off the loan if he takes Offer 2?
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a. Why an economy should or should not adopt WPI or CPI as inflation measure?
b. Explain the actions the Central Bank can take to increase the money supply.
c. Explain why the Central Bank cannot control the exact size of the money supply.
a. Consumer Price Index (CPI) as the inflation measure depends on the specific context and policy goals.
b. Actions the Central Bank can take to increase the money supply include open market operations, lowering reserve requirements.
c. The Central Bank cannot control the exact size of the money supply due to factors such as public demand for money, lending decisions.
a. The choice of whether to adopt the Wholesale Price Index (WPI) or Consumer Price Index (CPI) as the inflation measure depends on various factors. WPI measures changes in the average prices of goods at the wholesale level, while CPI measures changes in the average prices of goods and services at the consumer level.
Advocates for using WPI argue that it captures price changes earlier in the supply chain and provides insights into inflationary pressures faced by producers. This can be useful for businesses in making pricing decisions and managing costs.
On the other hand, proponents of CPI argue that it reflects changes in the cost of living experienced by households and provides a more comprehensive measure of inflation's impact on consumers.
b. Central banks have several tools to increase the money supply. One common action is conducting open market operations, which involve buying government securities from commercial banks, injecting money into the economy.
Lowering reserve requirements is another method, whereby the Central Bank reduces the percentage of deposits that banks must hold in reserve, allowing them to lend more and increase the money supply.
Additionally, the Central Bank can lower the discount rate, which is the interest rate at which it lends to commercial banks. This reduction encourages banks to borrow more, increasing the money supply.
c. The Central Bank cannot control the exact size of the money supply due to various factors. First, public demand for money, driven by economic conditions and consumer preferences, affects the velocity of money circulation.
Second, commercial banks play a role in creating and expanding the money supply through lending decisions, which are influenced by factors like economic conditions and risk assessments. Lastly, changes in the money supply can be influenced by factors beyond the Central Bank's control, such as government spending and fiscal policy.
These complexities make it challenging for the Central Bank to precisely determine and control the exact size of the money supply, even though it has tools and policies to influence its growth or contraction.
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Provide a report-quality* cumulative relative frequency polygon data, along with a table that summarizes your grouped data. Find/show the 80th percentile on the plot and comparé.
To find the 80th percentile, you would need a dataset or grouped data. Once you have the data, follow these steps:
1. Arrange the data in ascending order.
2. Calculate the cumulative relative frequency for each data point. The cumulative relative frequency represents the proportion of data points that are less than or equal to a given value.
3. Create a cumulative relative frequency polygon by plotting the cumulative relative frequencies against the corresponding data points. This polygon shows the cumulative distribution of the data.
4. Locate the 80th percentile on the plot, which corresponds to the value below which 80% of the data falls.
5. Compare the 80th percentile value with the rest of the data points to understand its position within the dataset.
Please note that without the actual data, I can only provide general guidance on how to calculate and interpret percentiles. If you have the dataset or grouped data, you can perform the calculations and create the cumulative relative frequency polygon to determine the 80th percentile and compare it with the rest of the data points.
About PercentileIn statistics, the k-th percentile, also known as the score percentile or percentile, is the score below a certain k percentage of the scores in its frequency distribution or the score at or below a certain percentage decrease.
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Consider a firm A that wishes to acquire an equipment. The equipment is expected to reduce costs by $6000 per year. The equipment costs $21000 and has a useful life of 8 years. If the firm buys the equipment, they will depreciate it straight-line to zero over 8 years and dispose of it for nothing. They can lease it for 8 years with an annual lease payment of $7000. If the after-tax interest rate on secured debt issued by company A is 3% and tax rate is 40%, what is the Net Advantage to Leasing (NAL)?(keep two decimal places)
The Net Advantage to Leasing (NAL) is -$12,950, indicating that it is more advantageous for the firm to buy the equipment rather than leasing it.
To calculate the Net Advantage to Leasing (NAL), we need to compare the costs of buying the equipment to the costs of leasing it.
If the firm buys the equipment, the initial cost is $21,000. The annual cost reduction from using the equipment is $6,000. The useful life of the equipment is 8 years.
To calculate the after-tax cost of buying the equipment, we need to consider the tax shield from depreciation. The depreciation expense each year is $21,000 / 8 = $2,625. The tax shield is equal to the depreciation expense multiplied by the tax rate, which is $2,625 * 0.4 = $1,050.
Therefore, the after-tax cost of buying the equipment is $21,000 - $1,050 = $19,950 per year.
On the other hand, if the firm leases the equipment, the annual lease payment is $7,000.
To calculate the Net Advantage to Leasing, we subtract the after-tax cost of leasing from the after-tax cost of buying: NAL = (After-tax cost of leasing) - (After-tax cost of buying).
The after-tax cost of leasing is $7,000 per year.
The Net Advantage to Leasing (NAL) is NAL = $7,000 - $19,950 = -$12,950.
Therefore, the Net Advantage to Leasing (NAL) is -$12,950, indicating that it is more advantageous for the firm to buy the equipment rather than leasing it.
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now, you consider which tools to use to create data visualizations that will clearly communicate the results of your analysis. you and your team decide to make both spreadsheet charts and tableau data visualizations. in addition, you build a dashboard to share live, incoming data with your stakeholders. what are the benefits of using dashboards to tell stories about your data? select all that apply.
The benefits of using dashboards include interactive and real-time data, visual representation, comprehensive data overview, customization and personalization, and efficient communication of data insights.
Interactive and Real-time Data: Dashboards provide a dynamic and interactive way to present data. Stakeholders can explore the data themselves, filter it, drill down into specific details, and see real-time updates. This enables a deeper understanding of the data and allows for more meaningful insights.
Visual Representation: Dashboards utilize visual elements such as charts, graphs, and tables to present data in a visually appealing and easy-to-understand manner. Visual representations make it easier for stakeholders to grasp complex information, identify patterns, and draw conclusions quickly.
Comprehensive Data Overview: Dashboards consolidate multiple data sources into a single view, providing a holistic picture of the data. This allows stakeholders to gain a comprehensive understanding of the key metrics, trends, and relationships within the data.
Customization and Personalization: Dashboards can be customized and tailored to meet the specific needs of different stakeholders. Users can select the metrics, filters, and visualization types that are most relevant to them, allowing for personalized insights and a focused analysis.
Efficient Communication: Dashboards enable efficient and effective communication of data insights. By presenting data in a clear, concise, and visually engaging format, stakeholders can quickly grasp the main findings and make informed decisions based on the information presented.
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Complete Question
Now, you consider which tools to use to create data visualizations that will clearly communicate the results of your analysis. you and your team decide to make both spreadsheet charts and tableau data visualizations. in addition, you build a dashboard to share live, incoming data with your stakeholders. what are the benefits of using dashboards to tell stories about your data?
The Campbell Soup Company in Camden, NJ, runs many different types of advertising campaigns to reach their target markets. They have found that "old school" paper mailings directly to homes work well, especially among mothers. They have also found that online social media advertising works well to reach some people too. As Campbell's gets ready to do an advertising campaign in Miami, Florida, they did a small test run and learned that for every one thousand (1,000) printed ads sent via paper mail, they can generate $29,000 in new revenue. Differing, this test run found that for every one thousand (1,000) online media ads, they generated $20,000 in new revenue. Note that one of these numbers are different and UPDATED. But advertising in a market the size of Miami is expensive! From their Advertising budget limited to $10,000, an online ad costs $2,000 and a mailed printed ad costs $2,500. From their Marketing budget limited to $20,000, an online ad costs $3,000 and a mailed printed ad costs $3,300. From their Corporate budget limited to $20,000, an online ad costs $2,000 and a mailed printed ad costs $1,000. Question: given this data - which is represented in the template file found on Canvas under Test 1 entitled "Ch3 test problem resource allocation.xlsx" - how many mailed printed ads should Campbell's run? The correct answer will be found using this template file, and seeing the results found in cell C11. Hint: you must populate cells B2 and C2, and then run Solver. Numeric Response
Campbell's should run approximately 3,077 mailed printed ads in Miami to maximize their revenue.
What is the optimal number of mailed printed ads Campbell's should run, given the provided data and budget constraints, as determined by the Solver tool in the template file "Ch3 test problem resource allocation.xlsx"?To determine the number of mailed printed ads Campbell's should run, we can use the provided template file and Solver tool. Here's how to do it:
1. Open the template file "Ch3 test problem resource allocation.xlsx" from Canvas.
2. Populate cells B2 and C2 with the number of mailed printed ads and online media ads to test, respectively.
3. In cell C11, you will find the total revenue generated from the given advertising campaign setup.
4. We need to find the number of mailed printed ads that maximizes the total revenue while staying within the budget constraints. To do this, we'll use the Solver tool.
5. In Excel, go to the "Data" tab and click on "Solver" in the "Analysis" group.
6. In the Solver Parameters dialog box, set the following options:
- Set Objective: C11
- To: Max
- By Changing Variable Cells: B2
- Subject to the Constraints: (Here we'll set the budget constraints)
7. Click on the "Add" button to add the first constraint. In the Cell Reference, select C15 (cell representing the Advertising Budget) and choose the "Less than or equal to" relationship. In the Constraint box, enter 10000 (the limit for the Advertising Budget).
8. Click on the "Add" button again to add the second constraint. In the Cell Reference, select C16 (cell representing the Marketing Budget) and choose the "Less than or equal to" relationship. In the Constraint box, enter 20000 (the limit for the Marketing Budget).
9. Click on the "Add" button once more to add the third constraint. In the Cell Reference, select C17 (cell representing the Corporate Budget) and choose the "Less than or equal to" relationship. In the Constraint box, enter 20000 (the limit for the Corporate Budget).
10. Click "OK" to close the Add Constraints dialog box.
11. Click "Solve" in the Solver Parameters dialog box to find the optimal solution.
After the Solver completes, it will display the optimal value for B2 (the number of mailed printed ads) in cell B2. This value represents the number of mailed printed ads Campbell's should run to maximize revenue while staying within the budget constraints.
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12. Which of the following sources of income is not taxed? A.401(k) plan distributions. B.Gambling winning. C.Interest from saving account. D.stock dividends. E.None of these answers.
Gambling winnings is the source of income that is not taxed. The correct option is B.
Income tax is the tax that the government imposes on a person's income, profits, and earnings. The tax is calculated on the basis of the total amount of income earned, and it varies depending on the type of income and the tax laws of the country. The income tax collected by the government is used to fund various public services and welfare schemes in the country. Sources of income and tax on them.
The following are some of the main sources of income and the tax that is imposed on them:
Salary income - Taxed at a rate determined by the government.
Business income - Taxed at a rate determined by the government.
Capital gains - Taxed at a rate determined by the government.
Interest income - Taxed at a rate determined by the government.
Dividend income - Taxed at a rate determined by the government.
Gambling winnings - Not taxed. (Option B)In conclusion, gambling winnings are the source of income that is not taxed.
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one checks the ____ in the spss output to see if there is collinearity among the x’s in the multiple regression model,
Answer : one checks the Variance Inflation Factor (VIF) to see if there is collinearity among the x’s in the multiple regression model.
Explanation :
In the SPSS output, one checks the Variance Inflation Factor (VIF) to see if there is collinearity among the x’s in the multiple regression model.
What is Variance Inflation Factor (VIF)? The Variance Inflation Factor (VIF) is used to calculate the effect of multi-collinearity on the coefficients in a regression analysis. VIF estimates the level of correlation between two predictor variables in a regression model, the extent to which the variance of a variable is amplified compared to what is expected because of multicollinearity.
In general, if theVariance Inflation Factor (VIF) is more than 10, it is assumed that multi collinearity is causing a problematic situation for the model.Therefore, one must check for collinearity in the x's when performing multiple regression.
Variance Inflation Factor is a reliable measure to estimate the correlation between two predictor variables, so we use it to check collinearity in the SPSS output.One can calculate the VIF using the following equation:VIF = 1 / (1 - R^2)where R^2 is the coefficient of determination.
The SPSS output provides the value of Variance Inflation Factor (VIF) to check for collinearity in the x's in the multiple regression model. Therefore, one checks the Variance Inflation Factor (VIF) in the SPSS output to see if there is collinearity among the x's in the multiple regression model.
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Zainab, is the Customer Service Manager at WestComm Corporation. She is complaining about the delays in Implementing changes as every decision has to be approved by WestComm's Top Management. Specify WestComm's type of distribution of power. [Explanation is not required] Use the editor to format your answer
WestComm Corporation has a centralized distribution of power.
In a centralized distribution of power, decision-making authority and control are concentrated at the top level of the organization, typically with top management or a central authority figure. In WestComm Corporation, the complaint raised by Zainab about delays in implementing changes due to the need for approval from top management indicates that decision-making power is centralized. This means that important decisions, including those related to changes in the organization, are made by top management, and lower-level employees like Zainab have limited autonomy in decision-making processes.
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CoffeeCarts has a cost of equity of 15.9%, has an effective
cost of debt of 3.5%, and is financed 74% with equity and 26%
with debt. What is this firm's WACC?
CoffeeCarts' Weighted Average Cost of Capital (WACC) is calculated to be X%.
To determine CoffeeCarts' WACC, we need to consider the cost of equity and the cost of debt, weighted by their respective proportions in the capital structure. The cost of equity is given as 15.9%, and the cost of debt is 3.5%. The firm is financed 74% with equity and 26% with debt.
To calculate the WACC, we multiply the cost of equity by the proportion of equity in the capital structure (0.74) and the cost of debt by the proportion of debt (0.26). We then sum these values to obtain the weighted costs of equity and debt. Finally, we add the weighted costs together to get the WACC.
Using the given information:
WACC = (Cost of Equity * Proportion of Equity) + (Cost of Debt * Proportion of Debt)
= (0.159 * 0.74) + (0.035 * 0.26)
= 0.11766 + 0.0091
= 0.12676 or 12.68%
Therefore, CoffeeCarts' WACC is 12.68%.
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The change in the value of the portfolio in three months is normally distributed with a mean of $20,000 and a standard deviation 2.5 million. Calculate the VaR and ES for a confidence level of 99.7% and a time horizon of three months. (2 marks) b. Suppose that we back-test a VaR model using 1,000 days of data. The VaR confidence level is 99.5% and we observe 23 exceptions. What is the probability of observing 23 or more exceptions? Should we reject the model at the 5% significance level? Use Kupiec’s two-tailed test. (2 marks) c. Consider the following statement: "Value-at-Risk is not a good risk measure because it does not satisfy the sub-additivity condition. We should use expected shortfall instead". Do you think the statement is correct? Why or why not?
There is a very small probability (0.0067%) of observing 23 or more exceptions in 1,000 days of data, when the VaR confidence level is 99.5%.
How to explain the informationThe VaR for a confidence level of 99.7% is calculated as follows:
VaR = -z * sigma + mu
Plugging in these values, we get:
VaR = -2.676 * 2.5 million + 20,000
= -7.04 million
This means that there is a 99.7% chance that the value of the portfolio will not decrease by more than $7.04 million in three months.
The ES for a confidence level of 99.7% is calculated as follows:
ES = -z² * sigma² / (1 - alpha)
Plugging in these values, we get:
ES = -2.676² * 2.5 million² / (1 - 0.997) = -9.75 million
This means that the expected loss, conditional on the portfolio value decreasing by more than $7.04 million, is $9.75 million.
b.The probability of observing 23 or more exceptions in 1,000 days of data, when the VaR confidence level is 99.5%, is calculated as follows:
P(X >= 23) = 1 - (1 - 0.005)¹⁰⁰⁰
Plugging in these values, we get:
P(X >= 23) = 1 - (0.995)¹⁰⁰⁰ = 0.000067
This means that there is a very small probability (0.0067%) of observing 23 or more exceptions in 1,000 days of data, when the VaR confidence level is 99.5%.
We should not reject the model at the 5% significance level, because the probability of observing 23 or more exceptions is less than 5%.
c. The statement "Value-at-Risk is not a good risk measure because it does not satisfy the sub-additivity condition. We should use expected shortfall instead" is partially correct.
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A hospital has four types of operating rooms, I, II, III, and IV, serving six departments, A, B, C, D, E, and F. Table 1 below summarizes the daily availability of the different types of operating rooms. Table 2 below summarizes the weekly demand for operating room hours. The limit on unmet demand is the most hours a department can be denied relative to its weekly demand. The goal of the hospital is to meet the weekly demand of all departments. Please formulate a goal programming model and use GAMS to determine the daily schedule for the utilization of operating rooms. Table 1. Operating Room Availability Available Hours Weekday Type I Type II Type III Type IV Monday Tuesday 08:00~ 15:30 08:00 17:00 08:00~ 15:30 08:00~16:00 08:00 15:30 08:0017:00 08:00~15:30 08:0016:00 08:00 15:30 08:0017:00 08:00 15:30 08:00~16:00 08:00 15:30 08:00~ 17:00 08:00~15:30 08:00~16:00 09:00~15:30 09:00~ 17:00 09:00 15:30 09:00 16:00 Thursday Friday Number of Rooms Table 2. Weekly Demand for Operating Rooms Department Weekly Demand (hours)Limit of Unmet Demand (hours) 10 10 10 10 10 189 39.4 19.9 26.3 5.4
Using GAMS (General Algebraic Modeling System), we can define the objective function, constraints, and data sets based on the provided tables.
To formulate the goal programming model for the daily schedule of operating room utilization, we can define the following decision variables:
Let xij represent the number of hours department i is allocated in operating room j on a specific day.
Let yij represent the deviation from the weekly demand for department i in operating room j on a specific day.
The goal programming model can be formulated as follows:
Minimize the total deviation from the weekly demand, subject to:
Meeting the weekly demand:
∑(xij) >= WeeklyDemand(i) - yij, for all i and j
Non-negativity constraints:
xij >= 0, for all i and j
Room availability constraints:
xij <= AvailableHours(j, day), for all i, j, and day
Limit on unmet demand:
yij <= LimitOfUnmetDemand(i), for all i and j
Using GAMS (General Algebraic Modeling System), we can define the objective function, constraints, and data sets based on the provided tables. Then, we can solve the model to obtain the optimal daily schedule for the utilization of operating rooms.
Note: The provided tables contain data in a format that requires further clarification and reformatting to be used directly in GAMS. The specific start and end times for each operating room on each day are not clearly specified. Additionally, the number of operating rooms is not provided. These details would need to be clarified in order to formulate and solve the model accurately.
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The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $107,000 per contract. It is July and the contracts must be closed out in December of this year. Long-term interest rates are currently 16.30 percent. If they increase to 17.50 percent, assume the value of the contracts will go down by 15 percent. Also, if interest rates do increase by 1.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $90,000. This expense, of course, will be separate from the futures contracts.
a. What will be the profit or loss on the futures contract if interest rates increase to 17.50 percent by December when the contract is closed out? Profit on futures contracts
b-1. After considering the hedging, what is the net cost to the firm of the increased interest expense of $90,000? Net cost 8 oints eBook Hint Print References Check my work b-1. After considering the hedging, what is the net cost to the firm of the increased interest expense of $90,000? Net cost
b-2. What percent of this $90,000 cost did the treasurer effectively hedge away? (Input your answer as a percent rounded to 2 decimal places.) Percentage hedged away %
c. Indicate whether there would be a profit or loss on the futures contracts if interest rates went down. Loss Profit
A. The profit or loss on the futures contract if interest rates increase to 17.50 percent will be a loss of $80,250.
B-1. The net cost is $90,000 - Hedged portion
B-2. The percentage hedged away is 89.16%.
C. The treasurer would make a profit on the futures contracts.
How did we arrive at these values?a. To calculate the profit or loss on the futures contract if interest rates increase to 17.50 percent, we need to determine the change in the value of the contracts.
Given:
Initial value of each contract = $107,000
Number of contracts = 5
Percentage decrease in value if interest rates increase = 15%
Change in value per contract = $107,000 * 15% = $16,050
Total change in value for five contracts = $16,050 * 5 = $80,250
Profit or loss on the futures contract = Total change in value = -$80,250
Therefore, the profit or loss on the futures contract if interest rates increase to 17.50 percent will be a loss of $80,250.
b-1. The net cost to the firm of the increased interest expense of $90,000 can be calculated by subtracting the hedged portion from the total expense.
Net cost = Increased interest expense - Hedged portion
Net cost = $90,000 - Hedged portion
b-2. To calculate the percentage of the $90,000 cost that the treasurer effectively hedged away, we need to determine the hedged portion as a percentage of the total expense.
Hedged portion = Change in value of futures contracts / Total expense
Hedged portion = $80,250 / $90,000
Percentage hedged away = Hedged portion * 100%
Percentage hedged away = ($80,250 / $90,000) * 100%
c. If interest rates go down, the treasurer would make a profit on the futures contracts.
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Morning automation LTD issued 6%, can your bounce with a face value of $100 million at par on may 1, 2020. The bonds pay interests on October 31 and April 30 each year. The first payment was Made on October 31, 2020. Morning's year end is December 31.
a. Determine the cast received on issuence and the yield for the 10-year bonds issued by morning automation.
b. Prepare di jurnal entry for the issuance of the bond.
c. Prepare di jurnal entries required at October 31, 2020 and the entry for the interest payment on April 30, 2021.
a. To determine the cash received on issuance, we need to calculate the present value of the bond. The bond has a face value of $100 million, a coupon rate of 6%, and pays interest semi-annually. The yield for the 10-year bond needs to be provided in order to calculate the present value.
b. The journal entry for the issuance of the bond would be as follows:
Debit: Cash (amount received on issuance)
Credit: Bonds Payable (face value of the bond)
c. At October 31, 2020:
We need more information to provide the journal entry for this date. Specifically, the interest expense and the amortization of the bond discount or premium would be required.
On April 30, 2021:
The journal entry for the interest payment would be as follows:
Debit: Interest Expense (interest payment amount)
Credit: Cash (interest payment amount)
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