Answer:
Order for unit B = 440
Explanation:
Given:
Order for unit A = 140 units
Units A in hand = 20 units
Units B in hand = 40 units
1 unit A required 3 units of B
Find:
Order for unit B
Computation:
Total unit of A = 140 + 20
Total unit of A = 160 units
Total unit B required = 160 x 3
Total unit B required = 480
Order for unit B = Total unit B required - Units B in hand
Order for unit B = 480 - 40
Order for unit B = 440
Waterway Industries was organized on January 1, 2021. During its first year, the corporation issued 2,400 shares of $50 par value preferred stock and 150,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2021, $5,800; 2022, $13,100; and 2023, $28,800.
Required:
Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and noncumulative.
Answer:
Preferred dividend is noncumulative which means that it will not accrue if company was unable to pay in any period.
Dividends in 2021
Preferred dividends:
= Number of preferred shares * par value * dividend percentage
= 2,400 * 50 * 5%
= $6,000
Dividends of $5,800 were declared which is not enough to cover even preferred shares so preferred shares will take all the dividends.
Preferred share dividends = $5,800
Common share dividends = $0
Dividends in 2022:
Preferred dividends = $6,000
Common dividends:
= Declared dividends - Preferred dividends
= 13,100 - 6,000
= $7,100
Dividends in 2023:
Preferred dividends = $6,000
Common dividends:
= Declared dividends - Preferred dividends
= 28,800 - 6,000
= $22,800
The following data relate to the direct materials cost for the production of 2,200 automobile tires:
Actual: 55,500 lbs. at $1.7 per lb.
Standard: 56,600 lbs. at $1.65 per lb.
Required:
Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.
Answer and Explanation:
The computation is given below:
Direct Material price variance is
= ($1.70 per lb - $1.65 per lb) × 55,500 lbs.
= $2,775 Unfavorable
Direct Material quantity variance is
= (55,500 lbs. - 56,600 lbs.) × $1.65 per lb
= $-1,815 Favorable
Total Direct Materials Cost Varianceis
= Actual Materials Cost - Standard Materials Cost
= (55,500 lbs. × $1.70 per lb) - (56,600 lbs. × $1.65 per lb)
= $94,350 - $93,390
= $960 Unfavorable
Exercise 19-17 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options [LO19-5, 19-6, 19-7, 19-8] On December 31, 2020, Berclair Inc. had 380 million shares of common stock and 4 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 96 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $600 million. Also outstanding at December 31 were 30 million incentive stock options granted to key executives on September 13, 2013. The options were exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations.)
Answer:
Berclair Inc.
Basic earnings per share = $1.87
Diluted earnings per share = $1.70
Explanation:
a) Data and Calculations:
Common Stock Cumulative Preferred Stock
Dec. 31, 2012 Outstanding 380,000,000 4,000,000 shares
Dividend rate 9%
Stock par value $100
Total value of stock $400 million
Annual preferred dividend $36 million ($400 m * 9%)
March 1, 2021 Treasury stock (96,000,000)
July 1, 2021 Stock dividend 14,200,000 (284,000,000 * 5%)
October 1, 2021 Treasury stock 4,000,000
Outstanding shares 302,200,000 4,000,000 shares
Stock options 30,000,000
Total shares and options 332,200,000
Net income for the year = $600,000,000
Preferred stock dividend 36,000,000
Earnings for available for
common stockholders $564,000,000
Basic earnings per share = $1.87 ($564,000,000/302,200,000)
Diluted earnings per share = $1.70 ($564,000,000/332,200,000)
Can someone look at my resume for my career class please and thank you!
I also have the rubric and directions y’all can look at too.
The cost of capital is:___________
a. the return that a previous project for the firm had earned.
b. the minimum return that a capital budgeting project must earn for it to be accepted.
c. the maximum return a project can earn.
d. none of these.
Answer:
I think that the correct answer is b.
Answer:
B
Explanation:
i think the correct answer is B
The nation of Ectenia has 20 competitive apple orchards, which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard:
Q= 100L -L^2
MPL 100-2L
where Q s the number of apples produced in a day, L s the number of workers, and MPL is the marginal product of labor. Now, suppose the price of apples is back at $2 per apple, but a hurricane destroys half the orchards so only 10 orchards remain. Recall that each orchard's labor demand as a function of the daily wage is L 50-0.25W.
Required:
What is the market's labor demand?
The market's labor demand is L=500−2.5W
Since labor demand as a function of the daily wage is L 50-0.25W.
Hence,
The individual labor demand curve is: L=50−0.25W
Now let determine The market labor demand curve
The market's labor demand is :
L=10(50−0.25W)
L=500−2.5W
Inconclusion The market's labor demand is L=500−2.5W
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Radison Enterprises sells a product for $114 per unit. The variable cost is $63 per unit, while fixed costs are $741,285. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $120 per unit. a. Break-even point in sales units fill in the blank 1 units b. Break-even point if the selling price were increased to $120 per unit
Answer:
Results are below.
Explanation:
Giving the following information:
Selling price= $114
Unitary variable cost= $63
Fixed costs= $741,285
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 741,285 / (114 - 63)
Break-even point in units= 14,535
Now, the break-even point if the selling price is $120:
Break-even point in units= 741,285 / (120 - 63)
Break-even point in units= 13,005
Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: Variable Cost per Hula Skirt Direct materials $ 9.60 Direct labor 3.40 Variable manufacturing overhead 1.05 Variable selling and administrative expenses 0.40 Fixed Cost per Month Fixed manufacturing overhead $ 16,125 Fixed selling and administrative expenses 4,950 Dance Creations charges $30 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,375. Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. 2. Complete a variable costing income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full absorption costing income statement. 6. Suppose next month Dance Creations expects to produce 1,500 hula skirts and sell 1,600. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher
Answer:
1. $14.05 per unit
2. Contribution Margin $21,381
Net Operating Income $306
3.$24.08 per unit
4.Gross Margin $7,150
Net Operating Income $4,620
6. $1,075
Variable costing would be higher
Explanation:
1. Calculation to determine the variable manufacturing cost per unit for last month
Using this formula
Variable manufacturing cost per unit = Direct material + Direct labor + variable manufacturing overhead
Let plug in the formula
Variable manufacturing cost per unit= $9.60+3.40+1.05
Variable manufacturing cost per unit=$14.05 per unit
Therefore Variable manufacturing cost per unit is $14.05 per unit
2. Calculation to Complete a variable costing income statement for the last month
Variable costing income statement
Sales Revenue $41,250
($30*1,375)
Less: Variable cost per unit $19,869
1,375*($9.60+3.40+1.05 +$0.4)
Contribution Margin $21,381
($41,250-$19,869)
Less: Fixed costs $21,075
($ 16,125+$4,950)
Net Operating Income $306
($21,381-$21,075)
Therefore the complete variable costing income statement for the last month will have Contribution Margn of $21,381 and Net Operating Income of $306
3. Calculation to determine the full manufacturing cost per unit for the last month
Using this formula
Full manufacturing cost per unit = Direct material + Direct labor + variable manufacturing overhead + Fixed manufacturing overhead per unit
Let plug in the formula
Full manufacturing cost per unit= $9.60+3.40+1.05+ $ 16,125/1,500
Full manufacturing cost per unit=$14.05+ $10.75
Full manufacturing cost per unit=$24.08 per unit
Therefore the full manufacturing cost per unit for the last month is $24.08 per unit
4. Calculation to Complete a full absorption costing income statement
Absorption costing Income Statement
Sales Revenue $41,250
($30*1,375)
Less: Cost of Goods sold $34,100
($24.08*1,375)
Gross Margin $7,150
($41,250-$34,100)
Less: Selling expenses $2,530
($0.4*1,375+4,950)
Net Operating Income $4,620
($7,150-$2,530)
Therefore the Complete a full absorption costing income statement will have Gross Margin of $7,150 and Net Operating Income of $4,620
6. Calculation to determine the difference in profit between variable costing and full absorption costing.
Difference=(1,600-1,500)*($16,125/1,500)
Difference= 100*($16,125/1,500)
Difference=100*$10.75
Difference= $1,075
Therefore Variable costing would be higher $1,075
You are docking your boat. The current is pushing you toward the dock . What is the best way to dock
The best and the most secure way to dock a boat in a dockyard is by :
moving the boat parallelly along the dock, and approaching towards the dock slowly.A dockyard is a place where ships and boats are sheltered and it provides a secure place to dock or station your boat and a secure place to access the boat.
Now when the current is pushing your boat towards the dock, the best way to dock your boat is :
Allow the current of the water to carry the boat towards the dock.We have approach slowly and parallelly towards the dock.We can also shift the gears whenever we need to adjust the position of the boat.We have to secure the bow lines as well as the stern lines.Learn More :
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Bramble Corp. has a weighted-average unit contribution margin of $30 for its two products, Standard and Supreme. Expected sales for Bramble are 60000 Standard and 40000 Supreme. Fixed expenses are $2400000. How many Standards would Bramble sell at the break-even point
Answer:
160,000 units
Explanation:
Step 1 : Determine the Sales Mix
Bramble : Standard
60000 : 40000
3 : 2
Step 2 : Determine the Overall Break even Point
Break even Point = Fixed Cost ÷ Contribution per unit
= $2400000 ÷ $30
= 80,000
Step 3 : Determine break-even point for Standards
Standards Break even point = 80,000 x 2
= 160,000 units
Thus,
Bramble Corp would sell 160,000 units of Standards at the break-even point
A financial analyst learns that the Bank of England has just issued a new bond that promises to pay £1,000 in one year’s time when it matures. If the market interest is 5% per year,
(a) Calculate the no-arbitrage price of the bond.
(b) If the bond is trading for £952.20 at the moment, what trading strategy should
the financial analyst follow?
(c) What do you think will happen to the bond’s price?
Please explain any formulas or theories used, thanks a lot!
Answer:
the price will go lower and I know how much it would be
Dake Corporation's relevant range of activity is 2,200 units to 5,000 units. When it produces and sells 3,600 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.85 Direct labor $ 2.80 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 3.00 Fixed selling expense $ 0.90 Fixed administrative expense $ 0.60 Sales commissions $ 0.70 Variable administrative expense $ 0.60 If 2,600 units are produced, the total amount of direct manufacturing cost incurred is closest to: rev: 12_18_2020_QC_CS-244896 Multiple Choice $28,990 $36,790 $25,090 $30,810
Answer: $25,090
Explanation:
Direct manufacturing costs are the direct material and direct labor costs tha were incurred to produce the goods in question.
Direct manufacturing costs = (Direct materials per unit + Direct labor per unit) * number of units produced
= (6.85 + 2.80) * 2,600
= 9.65 * 2,600
= $25,090
Enviro Company issues 10.50%, 10-year bonds with a par value of $430,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 7.50%, which implies a selling price of 127.875. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 127.875. what are the issuer’s cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?
Answer:
1.
549,862.5
2.
$331,637.5
3.
$16,581.87
Explanation:
1.
Cash proceeds = Par Value of the bond x Price ratio to par value
Cash proceeds = $430,000 x 127.875%
Cash proceeds = $549,862.5
2.
Bond Interest expense = Total Coupon payment - Premium on bond
Bond Interest expense = ( $430,000 x 10.50% x 10 ) - ( $549,862.5 - $430,000 )
Bond Interest expense = $451,500 - $119,862.5
Bond Interest expense = $331,637.5
3.
Bond Interest expense = Coupon Payment - Premium on Bond amortization
Bond Interest expense = ( $430,000 x 10.5% x 6/12 ) - ( ( $549,862.5 - $430,000 ) / ( 10 x 2 ) )
Bond Interest expense = $22,575 - $5,993.13
Bond Interest expense = $16,581.87
Electronic communication:_____.
a. prevents gossip, insults, threats, harassment, and the release of confidential information.
b. enables participants to pick up on subtle, nonverbal, or inflectional clues.
c. always leads to more satisfying negotiations.
d. requires lessening participation in communication to fewer people.
e. can reduce time and expenses devoted to traveling.
Electronic communication can reduce the time and expenses devoted to traveling. option (E) is correct.
What is communication?The transfer of information is the standard definition of communication. The phrase may also be used to describe the message sent through such transmissions or the area of research that focuses on them. There are several differences of opinion regarding its exact definition.
Any form of communication that is broadcast, transmitted, stored, or viewed using electronic media, such as computers, phones, email, and video, is referred to as electronic communication. But each has a particular purpose and is more appropriate in certain circumstances. A few types of electronic communication include email, instant messaging, websites, blogs, text messages, voicemail, and video messaging.
Therefore, option (E) is correct.
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Ray acquired an activity several years ago, and in the current year, it generates a loss of $50,000. Ray has AGI of $140,000 before considering the loss from the activity.
If the activity is a bakery and Ray is not a material participant, what is his AGI?
Answer:
adjusted gross income should be $140,000
Explanation:
The computation of the adjusted gross income is given below:
Given that
There is the loss of $50,000
And, the adjusted gross income prior considering the loss should be $140,000
So here $50,000 loss should be suspended under the rule of the passive loss as ray should not be the material participant
Therefore adjusted gross income should be $140,000
Assume that the expected return for A is 10% and the expected return for B is 5.5%. Calculate the expected return on a portfolio consisting of 60% A and 40% B. Give your answer in decimal form to 3 decimals places. For example, 8.6% is 0.086.
A 2-year Treasury security currently earns 1.94 percent. Over the next two years, the real risk-free rate is expected to be 1.00 percent per year and the inflation premium is expected to be 0.55 percent per year. Calculate the maturity risk premium on the 2-year Treasury security.
Answer:
cacagada
Explanation:
Trent Inc. needs an additional worker on a multiyear project. It could hire an employee for a $88,000 annual salary. Alternatively, it could engage an independent contractor for a $95,000 annual fee. Trent's income tax rate is 21 percent. Required: Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker
Answer: The cheaper cost is to hire an additional worker.
Explanation:
Employee:
With an employee, Trent is going to have to pay payroll taxes.
After-tax cost of hiring employee:
= Salary * (1 + Payroll tax)
= 88,000 * ( 1 + 7.5%)
= $94,600
The subtract the income tax from this amount:
= 94,600 * ( 1 - 21%)
= $74,734
Contractor:
With a contractor, only the marginal income tax is accounted for:
= 95,000 * (1 - 21%)
= $75,050
The cheaper cost is to hire an additional worker.
1-What will be the effect of the following on the accounting equation: a-Amer started business with cash 1,80,000$ b-Purchased goods for cash 50,000$ and on credit 20,000$ c-Sold goods for cash 40,000$ costing 24,000$ d-Rent paid 10,000$, rent outstanding 2000$The answer will be : a-Assets 2,06,000 , liabilities 22,000 , capital 184,000 b-assets 204,000 , Liabilities 20,000 , capital 184,000 c-assets 186,000 , Liabilities 22,000 , capital 164,000
Answer:
Purchased goods for cash, 20,000. 4. Purchased goods on credit, 36,000. 5. Paid for rent, 700. 6. Goods costing ₹ 40,000 sold at a profit of 20% for cash ...
On December 18, Intel receives $249,000 from a customer toward a cash sale of $2.49 million for computer chips to be completed on January 23. The computer chips had a total production cost of $1.49 million. What journal entries should Intel record on December 18 and January 23
Answer:
December 18
Debit cash $249,000
Credit deferred revenue $249,000
January 23rd
Debit Cash $2,241,000
Debit deferred revenue $249,000
Credit sales revenue $2,490,000
January 23rd
Debit Cost of goods sold $1.49 million
Credit Inventory $1.49 million
Explanation:
Preparation of the journal entries that Intel should record on December 18 and January 23
December 18
Debit cash $249,000
Credit deferred revenue $249,000
January 23rd
Debit Cash $2,241,000
($2.49 million-$249,000)
Debit deferred revenue $249,000
Credit sales revenue $2,490,000
($2,241,000+$249,000)
January 23rd
Debit Cost of goods sold $1.49 million
Credit Inventory $1.49 million
Tangerine, Inc. provides the following data: Surround, Inc. Comparative Balance Sheet Dec. 31, 20X9 Assets Current Assets: Cash and Cash Equivalents $29,000 Account Receivable, Net 31,000 Merchandise Inventory 53,000 Total Current Assets $113,000 Property, Plant, and Equipment, Net 120,000 Total Assets $233,000 Liabilities Current Liabilities: Accounts Payable $4000 Notes Payable 3000 Total Current Liabilities $7000 Long-term Liabilities 84,000 Total Liabilities $91,000 Stockholders' Equity Common Stock $30,000 Retained Earnings 112,000 Total Stockholders' Equity $142,000 Total Liabilities and Stockholders' Equity $233,000 Calculate the debt to equity ratio.
Answer:
The debt to equity ratio is 0.64.
Explanation:
The debt to equity ratio can be calculated using the following formula:
Debt to equity ratio = Total Liabilities / Stockholders' Equity ……………………. (1)
Where:
Total Liabilities = $91,000
Stockholders' Equity = $142,000
Substitute the relevant data into equation (1), we have:
Debt to equity ratio = $91,000 / $142,000 = 0.64
Therefore, the debt to equity ratio is 0.64.
From a macroeconomic point of view, increases in ____________ are an addition to aggregate demand, while increases in ___________ are a subtraction from aggregate demand. rates of return; exchange rates exchange rates; rates of return exports; imports imports; exports
Answer:
exports; imports.
Explanation:
Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Hence, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.
Simply stated, macroeconomics studies the overall operation of the national and global economy.
Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.
Basically, trade can be categorized into two (2) main groups and these are;
I. Import: this involves bringing in goods from a foreign country to sell in a different (domestic) country.
II. Export: it involves the sales of goods produced in a domestic country to a foreign country.
From a macroeconomic point of view, increases in exports are an addition to aggregate demand, while increases in imports are a subtraction from aggregate demand.
Aggregate demand (AD) can be defined as the total quantity of output (final goods and services) that is demanded by consumers at all possible price levels in an economy at a particular time.
Judd, Inc., owns 35% of Cosby Corporation. During the calendar year 2010, Cosby had net earnings of $300,000 and paid dividends of $30,000. Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained earnings, respectively?
a. Understate, overstate, overstate
b. Overstate, understate, understate
c. Overstate, overstate, overstate
d. Understate, understate, understate
Answer: d. Understate, understate, understate
Explanation:
If using fair value, the effects of net earnings and dividends would not be accounted for. With the equity method however, this would have done leading to the investment account, net income, and retained earnings being understated if using fair value as opposed to equity.
The Equity method would have sent 35% of the net earnings to the investment account which would have increased it. 35% of the Cosby dividends would have been sent to the net income which would have increased it as well and when net income increases, so does retained earnings.
Selma has developed and patented a new process for recycling discarded tires. A multinational corporation has expressed an interest in buying her company in order to gain access to the technology and keep it exclusively for itself. Should Selma sell her company, the buyer will have acquired technology via
Answer:
acquisition of the technology owner
Explanation:
In the given scenario a multinational corporation has expressed an interest in buying her company in order to gain access to her technology (a new process for recycling discarded tire).
The corporation is trying to obtain this technology by acquisition of the technology owner.
When they purchase Selma's company they will automatically own the technology.
Another method that can be used to get the technology would have been through liscensing. Where they will get permission to use the technology with the permission of the owner.
Risk means different things to different people, depending on the context and on how they feel about taking chances.
a. True
b. False
Answer:
you are true that the risk means different things to different people, depending on the context and on that they feel very happy about taking chances to do anything
"Idaho Mining, Inc. borrows at prime plus 1.5% on its line of credit. The line requires a 15% compensating balance. If the prime rate is 9% and Idaho Mining plans on borrowing for a period of one year, what is the nominal APR of the line of credit?"
Answer:
the nominal annual percentage rate for the line of credit is 12.4%
Explanation:
The computation of the nominal annual percentage rate is given below:
Nominal Annual percentage rate is
= (Prime rate + line of credit) ÷ (1 - compensation balance percentage)
= (9% + 1.50%) ÷ (1 - 15%)
= 10.50% ÷ 85%
= 12.4%
Hence, the nominal annual percentage rate for the line of credit is 12.4%
The same should be considered
Kindly help me here
Answer:
pic quality is too low so I didn't understand
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:
Quarter 1 $4,600,000
Quarter 2 5,100,000
Quarter 3 5,000,000
Quarter 4 7,600,000
In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $4,900,000 and for the fourth quarter of the current year are $6,850,000.
Required:
Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year.
Answer:
Shalimar Company
Cash Sales and Credit Sales:
a) Last two quarters of the current year:
Current Year Quarter 3 Quarter 4
Budgeted Sales $4,900,000 $6,850,000
Cash (10%) 490,000 685,000
Credit (90%) 4,410,000 6,165,000
b) Each quarter of the next year:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Budgeted
Sales $4,600,000 $5,100,000 $5,000,000 $7,600,000
Cash (10%) 460,000 510,000 500,000 760,000
Credit
Sales (90%) 4,140,000 4,590,000 4,500,000 6,840,000
Explanation:
a) Data and Calculations:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Budgeted
Sales $4,600,000 $5,100,000 $5,000,000 $7,600,000
Cash (10%) 460,000 510,000 500,000 760,000
Credit
Sales (90%) 4,140,000 4,590,000 4,500,000 6,840,000
Current Year Quarter 3 Quarter 4
Budgeted Sales $4,900,000 $6,850,000
Cash (10%) 490,000 685,000
Credit (90%) 4,410,000 6,165,000
If a consumer is always indifferent between an additional one grapefruit or an additional two oranges, then when oranges are on the horizontal axis the indifference curves: Group of answer choices will be straight lines with a slope of 1/2. will be straight lines with a slope of -1. will be right angles whose corners occur on a ray from the origin with a slope of 2. none of these options is correct. will be straight lines with a slope of -1/2.
Answer: will be straight lines with a slope of -1/2.
Explanation:
An indifference curve simply means the combination of two goods that can give a consumer equal satisfaction, and this makes the consumer indifferent.
It should be noted that along the curve, the consumer will have an equal preference which is for the combinations of the goods that are shown.
If a consumer is always indifferent between an additional one grapefruit or an additional two oranges, then when oranges are on the horizontal axis, then the indifference curves will be straight lines with a slope of -1/2. Here, the fact that the slope is negative
is due to the fact that the curve is downward sloping.
On the Tokyo Stock Exchange, Honda Motor Company stock closed at ¥2,915 per share on Monday, June 6, 2016. Honda trades as an ADR on the NYSE. One underlying Honda share equals one ADR. On June 6, 2016, the ¥/$ exchange rate was ¥107.65/$1.00. (Round your answer to 2 decimal places.) At this exchange rate, what is the no-arbitrage U.S. dollar price of one ADR?
Answer:
$27.08
Explanation:
Calculation to determine the no-arbitrage U.S. dollar price of one ADR
Using this formula
No-arbitrage U.S. dollar price of one ADR=Stock closed per share /Exchange rate
Let plug in the formula
No-arbitrage U.S. dollar price of one ADR=¥2,915 / ¥107.65
No-arbitrage U.S. dollar price of one ADR=$27.078
No-arbitrage U.S. dollar price of one ADR=$27.08 (Approximately)
Therefore the no-arbitrage U.S. dollar price of one ADR is $27.08
