You have been given the following return information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is 0.97.

Year Fund Market Risk-Free
2008 -15.2% -24.5% 1%
2009 25.1 19.5 3
2010 12.4 9.4 2
2011 6.2 7.6 4
2012 -1.2 -2.2 2

What are the Sharpe and Treynor ratios for the fund?

Answers

Answer 1

Answer:

Sharpe ratio = 0.20

Treynor ratio = –0.005

Explanation:

Note: See the attached excel file for the calculations of average rate of returns, standard deviations and beta used in the calculation below.

a. Calculation of Sharpe ratio

Sharpe ratio refers to a  investment measurement that employed to measure the an investment actual that has been adjusted for the risk associated with the investment.

Sharpe ratio can be calculated using the following formula:

Sharpe ratio = (Average fund rate - Average Risk Free rate) / Standard deviation of fund rate = (5.46% - 2.40%) / 15.05% = 0.20

a. Calculation of Treynor ratio

Treynor ratio refers to investment measurement that is calculated to show the risk of certain investments after the volatility of the market has been taking into consideration.

Treynor ratio can be calculated using the following formula:

Treynor ratio = (Average market return rate - Average Risk Free rate) / Beta = (1.96% - 2.40%) / 87.53% = –0.005


Related Questions

Ten years ago you put $150000.00 into an interest earning account. Today it's worth $275000. What is the effective annual interest earned on the account

Answers

Answer:

the effective annual interest earned on the account is 6.25%.

Explanation:

The effective annual interest earned on the account can be calculated as follows :

PV = - $150,000

N = 10

PMT = $0

P/yr = 1

FV = $275,000

R = ?

Using a Financial calculator, the  effective annual interest, R, earned on the account will be : 6.2488 or 6.25%.

Imagine you want to use conflict in a positive way. You decide to create a sense of competition among your team members. Which of these tactics could create competition?]

Answers

Answer:

a. Acknowledge top performers in the company newsletter.

Explanation:

Conflict among group members could be used for improved results by enhancing the dispute in a constructive manner. This can be achieved by recognizing and rewarding the best performers accordingly.

Therefore according to the given situation, for deciding a sense of competition you need to acknowledge the top performance in the newsletter of the company so that the employees gots motivated that results in their coming better job opportunities

Hence,  the correct option is a

A project with an initial cost of $27,250 is expected to generate cash flows of $6,600, $8,700, $9,100, $8,000, and $7,400 over each of the next five years, respectively. What is the project's payback period?

Answers

Answer:

It will take 4 years and 130 days to recover for the initial investment.

Explanation:

Giving the following information:

A project with an initial cost of $27,250 is expected to generate cash flows of $6,600, $8,700, $9,100, $8,000, and $7,400

The payback period is the time required to recover for the initial investment:

Year 1= 6,600 - 27,250= -20,650

Year 2= 8,700 - 20,650= -11,950

Year 3= 9,100 - 11,950= -2,850

Year 4= 8,000 - 2,850= 5,150

To be more accurate:

(2,850/8,000)*365= 130

It will take 4 years and 130 days to recover for the initial investment.

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 5.50 pounds $ 2.50 per pound $ 13.75
Direct labor 0.50 hours $ 6.50 per hour $ 3.25
During the most recent month, the following activity was recorded:
1. Ten thousand six hundred pounds of material were purchased at a cost of $2.40 per pound.
2. The company produced only 1,060 units, using 9,540 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
3. 630 hours of direct labor time were recorded at a total labor cost of $7,560.
Required:
Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Direct materials 5.50 pounds $ 2.50 per pound.

Actual:

1. 10,600 were purchased for $2.40 per pound.

2. The company produced only 1,060 units, using 9,540 pounds of material.

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (2.5 - 2.4)*10,600

Direct material price variance= $1,060 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

standard quantity= 1,060*5.5= 5,830

Direct material quantity variance= (5,830 - 9,540)*2.5

Direct material quantity variance= $9,275 unfavorable

One characteristic of weekly newspapers is that they usually serve national consumers rather than local consumers. tend to have a larger male readership than daily newspapers. emphasize local news and advertising. have a significantly lower CPM than daily newspapers. do not charge premium rates.

Answers

Answer: emphasize local news and advertising.

Explanation:

One of the main function of the newspaper is to pass message accross to its readership. The newspaper sends information accross to people by informing them about happenings in the local and international scene.

One characteristic of weekly newspapers is that they emphasize local news and advertising. People can advertise on weekly newspapers and gets information across to the local people.

The Hirt & Block mutual fund has assets of $147 million, liabilities of $7 million and 7 million shares outstanding. The shares trade at $21.60 per share. What is the percentage load fee?

Answers

Answer: 8%

Explanation:

The load fee would be the excess percentage amount charged on the share over the Net Asset Value per share.

= [tex]\frac{Trading price per share - Net Asset Value per share}{ Net Asset Value per share}[/tex]

Net Asset value Per share = (Assets - Liabilities) / Number of shares

= (147 - 7) / 7

= $20

Load fee

= [tex]\frac{Trading price per share - Net Asset Value per share}{ Net Asset Value per share}[/tex]

= [tex]\frac{21.60 - 20}{20}[/tex]

= 8%

uestion 5
BROOKLYN LTD has developed a new product and is currently considering the marketing and pricing
policy it should employ for this. Specifically, it is considering whether the sales price should be set at Shs.
15,000 per unit or at the higher level of Shs. 24,000 per unit. Sales volume at these two (2) prices is shown
in the following table:
Sales price Shs. 15,000 per Unit
Forecast Sales volume Probability
20,000
0.1
30,000
0,6
40,000
0.3
Sales price Shs. 24,000 per Unit
Forecast Sales volume Probability
8,000
0.1
16,000
0.3
20,000
0.3
24,000
0.3

Answers

Answer:

BROOKLYN LTD

The selling price should be set at Shs. 15,000.  At this price, there are more sales in unit and value than at the selling price of Shs. 24,000.

Explanation:

a) Data and Calculations:

                                            Shs. 15,000   Probability  Expected Sales

Forecasted Sales Volume     20,000              10%         2,000

Forecasted Sales Volume     30,000              60%       18,000

Forecasted Sales Volume     40,000              30%       12,000

Total Expected sales                                                     32,000

Total Sales Value = Shs. 480,000,000 (Shs. 15,000 x 32,000)

                                       Shs. 24,000     Probability  Expected Sales

Forecasted Sales Volume       8,000              10%             800

Forecasted Sales Volume     16,000              30%          4,800

Forecasted Sales Volume    20,000              30%          6,000

Forecasted Sales Volume    24,000              30%          7,200

Total Expected sales                                                      18,800

Total Sales Value = Shs. 451,200,000 (Shs. 24,000 x 18,800)

Two investment advisors are comparing performance. Advisor A averaged a 20% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the period was 13%, which advisor was the better stock picker?

Answers

Answer:

Advisor A

Explanation:

t bill rate = 0.05

market rate = 0.13

the beta of the market is always 1

the rate of return= 0.05 + (0.13 - 0.05) x 1

= 0.13

which is 13%

this is for advisor A.

with a return of 20% and 1.5 beta

0.05 + ( 0.20 - 0.05) x 1.5

= 27.5% for advisor b

when the return is 15% and beta is 1.2

0.05 + (0.15 - 0.05) x 1.2

= 17%

Therefore advisor a is better

A disadvantage of bonds is: Group of answer choices Bonds require payment of periodic interest Bonds require payment of principal Bonds can decrease return on equity Bond payments can be burdensome when income and cash flow are low All of the above

Answers

Answer:

All of the above.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

The disadvantages of bonds are listed below as;

1. Bonds require payment of periodic interest.

2. Bonds require payment of principal.

3. Bonds can decrease return on equity.

4. Bond payments can be burdensome when income and cash flow are low.

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Per Unit 15,000 Units per Year Direct materials $ 14 $ 210,000 Direct labor 10 150,000 Variable manufacturing overhead 3 45,000 Fixed manufacturing overhead, traceable 6 * 90,000 Fixed manufacturing overhead, allocated 9 135,000 Total cost $ 42 $ 630,000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outside su'

Answers

Answer:

financial disadvantage = $435,000 - $525,000 = ($90,000)

Explanation:

outside vendor offer: cost per unit $35 x 15,000 = $525,000

production costs:

direct materials $14 x 15,000 = $210,000 direct labor $10 x 15,000 = $150,000 variable manufacturing overhead $3 x 15,000 = $45,000 fixed manufacturing overhead, traceable $6 x 15,000 = $90,000 ($60,000 are non-avoidable) fixed manufacturing overhead, allocated $9 x 15,000 = $135,000 (all are non-avoidable) total cost $42 x 15,000 = $630,000

avoidable production costs = $435,000

financial disadvantage = avoidable costs - cost to purchase carburetors from outside vendor = $435,000 - $525,000 = ($90,000)

Rally Quadcopters plans to sell a standard quadcopter (toy drone) for $45 and a deluxe quadcopter for $65. Rally purchases the standard quadcopter for $35 and the deluxe quadcopter for $45. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $14,700. How many of each type of quadcopter must Rally sell monthly to breakeven?
To earn $10,500?
First identify the formula to compute the sales in units at various levels of operating income using the contribution margin approach.

Answers

Answer:

Rally must sell 1,080 units of Standard and 720 units of Deluxe

Explanation:

                                                  Standard       Deluxe        Total

Sales price per unit                      $45                $65

Less: Variable cost                      ($35)              ($45)

Contribution Margin per  unit       $10                $20

Sales Mix units  (A)                        $3                  $2                $5

Contribution margin                      $30                $40             $70

Weighted average Contribution                                              $14    

per unit C= B/A

Appointment of fixed cost between standard and deluxe

Total Fixed cost = 14,700

Break even point = Fixed cost / Weighted average Contribution  per unit

= 14,700 / 14

= 1,050

Apportionment of Break even point sales between Standard and deluxe in sales mix ratio (3:2)

Standard = 1,050 * 3/5 = 630

Deluxe = 1,050 * 2/3 = 420

Unit to be sold to get desired profit = Fixed cost + Desired profit / Weighted average Contribution per unit

= (14,700 + 10,500) / 14

= 1,800

Apportionment of Units to be sold to get desired profit between Standard and Deluxe in sales mix ratio (3:2)

Standard = 1,800 * 3/5 = 1,080

Deluxe = 1,800 * 2/5 = 720

To reach target operating income, Rally must sell 1,080 units of Standard and 720 units of Deluxe

On July 1, 20X1, James and Short formed a partnership. James contributed cash. Short, previously a sole proprietor, contributed property other than cash, including realty subject to a mortgage, which the partnership assumed. Short’s capital account on July 1, 20X1, should be recorded at

Answers

Answer:

James and Short LLC

Short's capital account on July 1, 20X1 should be recorded at the fair value of contributed property minus the mortgage liability, which the partnership assumed.

Explanation:

The fair value of contributed property is the current market value of the contributed property by Short.  It is the market value that will determine how the contributed property can be valued.  The market value assumes that the contributed property is being sold in pieces and not as a whole.  This is why the value is considered a fair basis for recognizing the capital contribution of Short into the partnership.

What are examples of career fields Skills USA prepares students for? Check all that apply.
health science
O education
agriculture
construction
manufacturing
transportation
information technology
public safety

Answers

Answer:

everything except education and agriculture

Explanation:

hope this helps •_•

Answer:

Everything except education and ariculture

Explanation:

edu 2021

If the price that determined where marginal revenue equaled marginal cost were below the bottom of the average variable cost curve, then the profit-maximizing, monopolistically competitive firm would

Answers

Answer: c. shut down because it would cost more to produce and sell output than it would to shut down and lose all fixed costs.

Explanation:

The profit maximizing, monopolistically competitive firm maximises profit at the point where marginal revenue equals marginal costs.

If this point is below Average variable costs then that means that the company is not making enough to cover its variable costs. Should this be the case then the company should shutdown operations because variable costs are only there when the company is producing. If they shutdown then they will no longer incur them which would be the cheaper option.

They would take losses on the fixed costs but these have already been incurred so it would be better to lose the fixed costs than continue to make losses on variable costs.

he carrying value of Blossom’s net identifiable assets, including the goodwill, at year-end is $855,000. Prepare Cullumber’s journal entry, if necessary, to record impairment of goodwill.

Answers

Answer:

Goodwill Impairment (Debit)

           Goodwill (Credit)

Explanation:

In case goodwill is impaired, then the entry to record this impairment will be Goodwill Impairment Debit and Goodwill Credit.

By crediting the Goodwill, the account will be reduced. This shows that the business is currently worth less than is accounted for. The Goodwill account is reduced to identify this difference.

The Impairment loss is an expense and must be reflected in the income statement. Therefore, while we reduce Goodwill amount from balance sheet. We record the expense on the income statement, which would mean that the current year profit amount will be reduced.

What is the present value of a perpetuity that pays you annual, end-of-year payments of $950? Use a nominal rate (monthly compounding) of 7.50%.

Answers

Answer:

The present value of the perpetuity is $12,242.27.

Explanation:

A perpetuity is an annuity that provide cash flow for an infinite period .Examples are Non -redeemable Preference Share.

Present Value (perpetuity) = Payments ÷ Required Rate

But, first change the 7.50 % nominal rate to Annual Effective Rate to match the period of Cash flow.

Effective Rate = (1 + r / m)^m - 1

                       = ( 1 + 0.0750 / 12) ^12 -1

                       = 7.76%

Therefore, Present Value (perpetuity) = $950 ÷  7.76%

                                                              = $12,242.27

At the certain interest rate, present value (PV) is the current value of a future sum of money or stream of cash flows.

The discount rate determines the present value of the cash flows, and the higher the discount rate, the lower the current value of future cash flows.

The present value of the perpetuity is $12,242.27.

A perpetuity is an annuity that payments out during an indefinite period of time. Non-redeemable Preference Share is an example.

Present Value (perpetuity) = [tex]\frac{\text{Payments}}{\text{Required Rate}}[/tex]

However, to match the Working capital period, change a 7.50 percent nominal rate to a Yearly Effective Tax rate.

[tex]\text{Effective Rate} = (1 + \frac{r}{m} )^m - 1= [1 + \frac{0.0750}{12}]^{12} -1= 7.76\%[/tex]

Therefore, Present Value (perpetuity)= [tex]\frac{\$950}{7.76\%} = $12,242.27[/tex]

To know more about the calculations of the present value, refer to the link below:

https://brainly.com/question/15036500

United Apparel has the following balances in its stockholders’ equity accounts on December 31, 2018: Treasury Stock, $650,000; Common Stock, $400,000; Preferred Stock, $1,600,000; Retained Earnings, $1,200,000; and Additional Paid-in Capital, $6,800,000. Required: Prepare the stockholders’ equity section of the balance sheet for United Apparel as of December 31, 2018

Answers

Answer:

United Apparel Balance sheet as of December 31, 2018

Stockholders’ Equity section

Common Stock Capital ............................................$400,000

Preferred Stock Capital.............................................$1,600,000

Additional Paid-in Capital..........................................$6,800,000

Total Paid-in Capital....................................................$8,800,000‬

Retained Earnings.......................................................$1,200,000

Less: Treasury Stock...................................................($650,000)

Total Stockholders Equity..........................................$9,350,000

If a bank that faces a 10% reserve ratio received a deposit of $50,000 and makes a loan to a customer for $5,000, what is the consequence if the bank then deposits the rest of the funds at the Federal Reserve?

Answers

Answer:

Excess reserve increases by $40,000

Required reserve increases by $5,000

Explanation:

In order to calculate the reserve, we need to multiply the Deposit received by a required reserve ratio.

DATA

Reserve ratio = 10%

Deposit received = $50,000

Loan to customer = $5,000

Solution

Reserve =  Deposit x Required reserve ratio

Reserve = $50,000 x 10%

Reserve = $5,000

After providing a $5,000 loan to the customer and keeping $5,000 as a reserve remaining $40,000 would be deposited in the Federal Reserve.

You purchased 1,000 shares of stock in Natural Chicken Wings, Inc., at a price of $43.37 per share. Since you purchased the stock, you have received dividends of $.95 per share. Today, you sold your stock at a price of $46.62 per share. What was your total percentage return on this investment?

Answers

Answer:

9.68%

Explanation:

Percent Return on Investment is calculated as Net Profit / Cost of Investment x 100

Net Profit= $46,620 (1,000 x $46.62 per share) + $950 (1,000 x $.95 per share) - $43,370 (1,000 x $43.37 per share) = $4,200

Cost of Investment= $43,370 (1,000 x $43.37 per share)

Percent Return on Investment=  $4,200 / $43,370 x 100 = 9.68%

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Budgeted unit sales 500
Selling price per unit $1,970
Cost per unit $1,460
Variable selling and administrative expenses (per unit) $ 50
Fixed selling and administrative expenses (per year) $196,000
Interest expense for the year $ 13,000
Required:
Prepare the company’s budgeted income statement using an absorption income statement format shown below.
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 74,000
May 85,000
June 114,000
July 92,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month’s sales. The inventory at the end of March was 7,400 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash disbursements$365,000 $335,000 $325,000 $345,000
The company’s beginning cash balance for the upcoming fiscal year will be $25,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.
Required:
Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:
Ending Balances
Cash ?
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings ?
The beginning balance of retained earnings was $32,000, net income is budgeted to be $16,300, and dividends are budgeted to be $2,700.


Required:

Prepare the company’s budgeted balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer:

Gig Harbor Boating

Budgeted Income Statement using absorption costing format:

Sales Revenue                                                        $985,000

Cost of Boats Sold                                                    730,000

Gross profit                                                            $255,000

Total variable selling and

administrative expenses                     $25,000

Fixed selling and

administrative expenses (per year)    196,000     $221,000

Income before interest and taxes                          $34,000

Interest expense for the year                                    13,000

Pretax Income                                                          $21,000

2. Down Under Products, Ltd. of Australia

Production Budget for the second quarter

                                           April            May          June       Total

Sales in Units                     74,000       85,000      114,000      273,000

Ending Inventory                8,500        11,400        9,200         9,200

Beginning Inventory              740        8,500        11,400            740

Units to be produced       81,760       87,900      111,800     241,460

3. Garden Depot

Summary of Cash Budget for the upcoming fiscal year:

                                 1st Quarter  2nd Quarter  3rd Quarter  4th Quarter

Beginning cash bal.   $25,000        $10,000       $63,800      $98,800

Total cash receipts   $310,000     $430,000    $360,000    $380,000

Total cash available $335,000     $440,000    $423,800    $478,800

Total cash

 disbursements     ($365,000)   ($335,000)  ($325,000)  ($345,000)

Bank loan (repyt)         40,000        (40,000)

Bank loan Interest                              (1,200)

Cash Balance           ($30,000)      $63,800       $98,800     $133,800

Required Minimum    $10,000       $10,000        $10,000       $10,000

4. Mecca Copy

Budgeted Balance Sheet for the coming year:

Budgeted Balance Sheet for the next year:

Ending Balances

Cash                                                          $ 18,200

Accounts receivable                                  $ 8,500

Supplies inventory                                     $ 4,700

Equipment                          $ 36,000

Accumulated depreciation $ 14,600       $ 21,400

Total Assets                                           $ 52,800

Accounts payable                                    $ 2,200

Common stock                                        $ 5,000

Retained earnings                                $ 45,600

Total Liabilities and Equity                 $ 52,800

Explanation:

1. Gig Harbor Boating:

Data and Calculations:

Budgeted unit sales 500

Selling price per unit $1,970

Sales Revenue = $985,000 ($1,970 x 500)

Cost per unit $1,460

Cost of Boats Sold = $730,000 ($1,460 x 500)

Variable selling and administrative expenses (per unit) $ 50

Total variable selling and administrative expenses = $25,000 ($50 x 500 )

Fixed selling and administrative expenses (per year) $196,000

Interest expense for the year $ 13,000

2. Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

a) Data and Calculations:

                                  March       April          May          June       July

Sales in Units              7,400      74,000       85,000      114,000      92,000

Ending Inventory          740        8,500        11,400        9,200

Beginning Inventory                      740         8,500        11,400       9,200

Units to be produced               81,760        87,900      111,800

3. Garden Depot

Data and Calculations:

                                1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Beginning cash bal.   $25,000        $10,000       $63,800      $98,800

Total cash receipts   $310,000     $430,000    $360,000    $380,000

Total cash available $335,000     $440,000    $423,800    $478,800

Total cash

 disbursements     ($365,000)   ($335,000)  ($325,000)  ($345,000)

Bank loan (repyt)         40,000        (40,000)

Bank loan Interest                              (1,200)

Cash Balance           ($30,000)      $63,800       $98,800     $133,800

Required Minimum    $10,000        $10,000       $10,000       $10,000

4. Mecca Copy:

Data and Calculations:

Budgeted Balance Sheet for the next year:

Ending Balances

Cash ?

Accounts receivable $ 8,500

Supplies inventory $ 4,700

Equipment $ 36,000

Accumulated depreciation $ 14,600

Accounts payable $ 2,200

Common stock $ 5,000

Retained earnings ?

Retained Earnings:

Beginning =   $32,000

Net income =   16,300

Dividends =      (2,700)

Ending =       $45,600

Gig Harbor Boating's budgeted income statement gives a snapshot into the future of its revenue, cost of boats sold, gross profit, and pretax income.  Thus, it uses the projections to guide management towards the achievement of its targets.

Similarly, Down Under Products, Ltd. of Australia prepares a production budget for the second quarter to determine how much units it needs to produce to meet sales or customers' demand.

Garden Depot, as a retailer, ascertains its cash needs by preparing budgeted cash flows for the coming year.

Finally, Mecca Copy cannot operate its center without an idea about its financial position for the next year.  Therefore, it prepares a budgeted balance sheet.  All these budgets guide managements of these various entities and prepare them for taking necessary actions to plan and keep their companies afloat.

Absolute Company has a manufacturing facility in Brooklyn that manufactures robotic equipment for the auto industry. For Year​ 1, Absolute collected the following information from its main production​ line:Actual quantity purchased 200 unitsActual quantity used 110 unitsUnits standard quantity 100 unitsActual price paid $8 per unitStandard price $10 per unitAbsolute isolates price variances at the time of purchase. What is the materials price variance for Year 1?a. $400 favorableb. $400 unfavorablec. $220 favorabled. $220 unfavorable

Answers

Answer:

Direct material price variance= $400 favorable

Explanation:

Giving the following information:

Actual quantity purchased 200 units

Actual price paid $8 per unit

Standard price $10 per unit

To calculate the direct material price variance, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (10 - 8)*200

Direct material price variance= $400 favorable

Sam has contracted with Dave to purchase Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made. Three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, what should he do? Multiple Choice Immediately seek injunctive relief. Immediately sue for specific performance. Immediately sue for compensatory damages. Immediately sue for consequential damages.

Answers

Answer: Immediately seek injunctive relief.

Explanation:

An injunctive relief is an order by the court stopping an action from taking place. From the question, we are told that Sam has contracted with Dave to buy Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made.

We are further told that three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, he should seek injunctive relief. By doing so, the court will stop Dave from selling the bike to Gene.

Which is the first step toward initiating efficient and effective international business negotiations:

Answers

Answer: Selecting an appropriate negotiation team

Explanation:

The first step toward initiating efficient and effective international business negotiations is selecting an appropriate negotiation team.

When an appropriate negotiation team has been selected to negotiate on behalf of a particular company, negotiation becomes easier and are more feasible and both parties can agree on a particular stance.

A production department’s beginning inventory cost includes $478,000 of conversion costs. This department incurs an additional $1,047,500 in conversion costs in the month of March. Equivalent units of production for conversion total 770,000 for March.Required:Calculate the cost per equivalent unit of conversion using the weighted-average method.

Answers

Answer: $1.98

Explanation:

Equivalent Units of Production are used when the manufacturers have not completely finished their products for the year. This helps them express it in terms of fully manufactured units.

Using the weighted average method, the cost per equivalent unit is;

= [tex]\frac{Beginning inventory cost + Cost of current production}{Equivalent units of production}[/tex]

= [tex]\frac{478,000 + 1,047,500}{770,000}[/tex]

= $1.98

Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $350 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $315,000, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $245 per 100 yards of XT rope.
Required:
1. Estimate Product XT's break-even point in terms of (a) sales units and (b) sales dollars.
2. Prepare a CVP chart for Product XT. Use 7,000 units (700,000 yards/100 maximum number of sales units on the horizontal axis of the graph, and $1,400,000 as the maximum dollar amount on the vertical axis.
3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.

Answers

Answer:

1a. 3,000 units

1b. $1,050,000

2. See attachment.

3. contribution margin income statement

Sales  ($350 × 7,000 units)                            $2,450,000

Less Variable Cost  ($245 × 7,000 units))     ($1,715,000)

Contribution                                                       $735,000

Less Fixed Costs                                              ( $315,000)

Operating Profit                                                 $420,000

Explanation:

Break-even point (sales units ) = Fixed Cost ÷ Contribution per unit

                                                   = $315,000 ÷ ($350 - $245)

                                                   = 3,000

Break-even point (sales dollars) = Fixed Cost ÷ Contribution Margin Ratio

                                                     = $315,000 ÷ ($105/$350)

                                                     = $1,050,000

Fallow Corporation has two separate profit centers. The following information is available for the most recent year: West Division East Division Sales (net) $ 410,000 $ 560,000 Salary expense 47,000 61,000 Cost of goods sold 143,000 259,000 The West Division occupies 10,250 square feet in the plant. The East Division occupies 6,150 square feet. Rent, which was $ 82,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.

Answers

Answer:

$168,750

Explanation:

The data below are extracted from the above question.

West division

Sales (S) = $410,000

Salary expense (E) = $47,000

Cost of goods sold (C) = $143,000

Proportional rent (R) = $82,000 % of square footage

Area of the division = 10,250 square feet.

Total area of both division = 10,250 + 6,150

= 16,400 square feet

Therefore, the operating income (I) for the West Division is given by the amount of sales minus salary expenses , cost of goods sold and rent.

I = S - E - C - R

= $410,000 - $47,000 - $143,000 - (82,000 × 10,250 / 16,400)

= $220,000 - $51,250

= $168,750

The yearly operating income for Fallow's Corporation West Division is $168,750.

The smartest thing a firm involved in an oligopoly market could do is to cut their prices and capture more of the market share from their competitors.

a) We learned in class that the best move would be to raise prices.

b) We also learned that cutting prices on an elastic demand curve will be a smart way of getting more revenues.

c) Cutting prices is no gaurantee of success. Indeed if the firm does capture more market share and customers, then their costs will go up and it will be harder for them because they will have lower profit margins - if they can earn any profit at all.

d) Both A and C are correct.

Answers

Answer:

Correct Answer:

c) Cutting prices is no gaurantee of success. Indeed if the firm does capture more market share and customers, then their costs will go up and it will be harder for them because they will have lower profit margins - if they can earn any profit at all.

Explanation:

An oligopoly market is a market form wherein a market or industry is dominated by a small group of large sellers. A pure monopoly maximizes profits by producing that quantity where marginal revenue = marginal cost. however, it is much more difficult for an oligopoly to determine at what output it can maximize its profit.

The business case for why companies should act in a socially responsible manner includes: Select one: a. It generates internal benefits including employee recruiting, workforce retention, training, and improved worker productivity b. It reduces the risk of reputation-damaging incidents c. It is in the best interest of shareholders and offers potential for increased buyer patronage d. All of the above

Answers

Answer:

d. All of the above

Explanation:

All alternatives are correct due to the fact that when a company acts in a socially responsible manner, it achieves several internal and strategic benefits that help in the success of the business.

Currently, organizations are no longer just profitable entities but are also promoters of positive social transformations for the locality in which they operate and for the world.

Being socially responsible includes having benefit programs for stakeholders, which includes improving the perception with which the company is seen, generating a position that attracts shareholders, retains employees, generates greater job satisfaction, which increases productivity and retention of staff.

Generally, corporate governance programs include the review and culture of continuous improvement of organizational processes, which reduces costs, risks and waste, which contributes to the generation of competitive and profitable advantages for the organization.

A firm's total cost function is given by the equation TC=4000+5Q+10Q and marginal cost is given by the equation MC=5+20Q
(A) Write an expression for each of the following cost concepts:
a. Total Fixed Cost
b. Average Fixed Cost
c. Total Variable Cost
d. Average Variable Cost
e. Average Total Cost
(B) Calculate the values of marginal cost and the costs in (a)-(e) above for Q=0,1,2,3.
(C) Determine the quantity that minimizes average total cost. Demonstrate that the predicted relationship between marginal cost and average cost holds.

Answers

The answer is A because of 5q allowing it to be MC

Following are the calculation to the given question:

[tex]\to TC = 4,000 + 5Q + 10 \ Q2\\\\\to MC = 5 + 20\ Q\\\\[/tex]

For point A)

[tex](a)\ TFC = 4,000\\\\(b)\ AFC = \frac{TFC}{ Q} = \frac{4,000}{ Q}\\\\(c)\ TVC = 5Q + 10\ Q2\\\\(d)\ AVC = \frac{TVC }{Q} = 50 + 10\ Q\\\\(e)\ ATC = \frac{TC }{ Q} = (\frac{4,000}{ Q}) + 50 + 10Q \ \text{Also, ATC = AVC + AFC}\\\\[/tex]

For point B)

TFC remains unchanged at 4,000, regardless of the price of Q.

i)

[tex]\to Q = 0[/tex]

AFC, AVC, and ATC cannot be calculated (division by zero is not possible).

ii)

[tex]Q = 1\\\\AFC =\frac{4,000}{ 1} = 4,000\\\\TVC = (5 \times 1) + (10 \times 1) =5 + 10 = 15\\\\AVC = \frac{TVC}{ Q} = \frac{15}{1} = 15\\\\ATC = 4,000 + 15 = 4,015\\\\MC = 5 + (20 \times 10 = 5 + 20 = 25[/tex]

iii)

[tex]Q = 2\\\\AFC = \frac{4,000}{ 2} = 2,000\\\\TVC = (5 \times 2) + (10 \times 2 \times 2) = 10 + 40 = 50\\\\AVC = \frac{50}{2} = 25\\\\ATC = 2,000 + 25 = 2,025\\\\MC = 5 + (20 \times 2) = 5 + 40 = 45\\\\[/tex]

iv)

[tex]Q = 3\\\\AFC = \frac{4,000}{ 3} = 1,333.33\\\\TVC = (5 \times 3) + (10 \times 3 \times 3) = 15 + 90 = 105\\\\AVC = \frac{105}{3} = 35\\\\ATC = 1,333.33 + 35 = 1,368.33\\\\MC = 5 + (20 \times 3) = 5 + 60 = 65\\\\[/tex]

For point C)

i)

[tex]ATC[/tex] is minimized when [tex]\frac{dATC}{dQ} = 0[/tex]

[tex](- \frac{4,000}{Q2} ) + 10 = 0\\\\\frac{4,000}{Q2} = 10\\\\Q2 = 400\\\\Q = 20\\[/tex]

ii)

Part (B) shows that as MC increases from Q = 0 to Q = 3, ATC decreases, validating the link.

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Which of the following is not a reason why it is important for parties to memorialize their agreements in writing?

a. A party enhances his/her chances of proving that an obligation was undertaken and makes it harder for the other party to deny making the promise.
b. Signing a writing communicates the seriousness of the occasion to the signer.
c. A person's signature on a written contract provides a basis for the contract to be authenticated.
d. Writings are subject to the danger that a person might fabricate terms.

Answers

Answer:

B. singing a writing communicates the seriousness of the occasion to the singer

The reason which is not important for parties to memorialize their agreements in writing is  signing a writing communicates the seriousness of the occasion to the signer. Thus, the correct answer is C.

What is an agreement?

Agreement refers to consent of individual on a particular opinion. When the both parties agree on a concept they will make it in writing. When this agreement enforceable by law it is considered as contract.

The reason it is important top memorialize the agreements in writing are it will act as proof or evidence when formulated in written to be presented in case of obligation.

An agreement will be duly signed by both the parties which shows its authenticity and reliability and avoid any false interpretation of the deal. When the agreement is in writing the violation of terms and conditions is not possible as it clearly mentions the drawbacks of circumstances if any party failed to fulfill the conditions of the agreement.

Therefore, the option C signing a writing communicates seriousness is the appropriate answer.

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