Answer:
C. 13.6 percent
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × risk-free rate of return + Beta × market risk premium
= 4% + 0.6 × 4% + 1.2 × 6%
= 4% + 2.4% + 7.2%
= 13.6%
The (Market rate of return - Risk-free rate of return) is also known as market risk premium
Answer:
1. Discount yield = 4.92%
2. Dividend yield = 5.07%
3. Effective annual return = 5.02%
Explanation:
The computation of discount yield, bond equivalent yield, and effective annual return is shown below:-
Discount yield
Commercial paper $2,000,000
Current selling price $1,965,000
($2,000,000 × 98.25%)
Days to maturity 128
Discount yield ( total days in a year)360
Dividend yield 4.92%
($2,000,000 - $1,965,000) ÷ $2,000,000 × (360 ÷ 128)
= $35,000 ÷ $2,000,000 × (2.8125)
= 0.0175 × 2.8125
= 0.04921
= 4.92%
Bond equivalent yield
Commercial paper $2,000,000
Current selling price $1,965,000
($2,000,000 × 98.25%)
Days to maturity 128
Discount yield ( total days in a year)360
Bond equivalent yield 5.07%
= ($2,000,000 - $1,965,000) ÷ $1,965,000 × (365 ÷ 128)
= $35,000 ÷ $1,965,000 × 2.8515625
= 0.017811705 × 2.8515625
= 0.05079119
= 5.07%
3. Effective annual return
Bond equivalent yield 5.07%
Effective annual return 5.02%
= (1 + 5.07% ÷ 365)^365 -1
= 5.02%
Answer:
The cash-basis net income and accrual-basis net income for the year is $19,500 and $22,800 respectively.
Explanation:
The computation is shown below:
1. Net income under cash basis:
= Received cash from customers - paid cash for salaries
= $43,000 - $23,500
= $19,500
2. Net income under accrual basis:
= Cash received - salary paid
where,
Cash received = Cash owed at the end of the year + cash received - cash owed at the beginning of the year
= $6,600 + $43,000 - $1,000
= $48,600
And, the salary paid = salary owed at the end of the year + salary paid - salary owed at the beginning of the year
= $5,600 + $23,500 - $3,300
= $25,800
Now put these values to the above formula
So, the value would equal to
= $48,600 - $25,800
= $22,800
1. Cash basis in as accounting method that recognizes revenues and expenses only when the cash is received or paid out.
Net income under cash basis = Received cash from customers - Cash paid for salaries
Net income under cash basis = $43,000 - $23,500
Net income under cash basis = $19,500
2. Accrual basis is as accounting method where accounting transactions are recorded for revenue when earned and expenses when incurred.
Net income under accrual basis = Cash received - Salary paid
Net income under accrual basis = (Cash owed at the end of the year + Cash received - Cash owed at the beginning of the year) - (Salary owed at the end of the year + Salary paid - Salary owed at the beginning of the year)
Net income under accrual basis = ($6,600 + $43,000 - $1,000) - ($5,600 + $23,500 - $3,300)
Net income under accrual basis = $48,600 - $25,80
Net income under accrual basis = $22,800
See similar question & solution here
Answer:
$3.62
Explanation:
The dividend distributed to common share = total net income - dividend for preferred stock
= $1,004,700 - $278,600
= $726,100
Earnings per share (EPS) = The dividend distributed to common share / common shares outstanding
= $726,100/ 200700
= $3.62
Answer:
Explanation:
Own price elasticity of demand is the degree of the responsiveness of the quantity demanded due to some change in price, keeping other factor constant. Price elasticity of demand on a linear demand curve will fall continuously as the curve slopes.
The four reasons are:
1. Medical aid is enivatble: Because medical services are a necessity for every human beings to live a healthy life, and if their is high change in price with respect to quantity demanded, person cannot ignore to take medical services in bad times or when seriously ill.
2. Comparing the actual size of the population, the number of doctors are compartively less.
3. The services of medical cannot be prolonged or postponed.
4. Love among people- One can be miser in food and clothing, but in diseases they have to take medical help and people will put in the whole money to save his closer one's life, this is the love we people have.
Answer:
the amount of the fire loss is $16,000
Explanation:
The computation of the amount of the fire loss is shown below
January 1 inventory $48,000
Add purchases $46,000
Goods Available $94,000
Less Cost of Goods Sold ($90,000 × 100 ÷ 125) $72,000
Less Cost of undamaged goods ($7,500 × 100 ÷ 125) $6,000
Goods Lost by Fire $16,000
hence, the amount of the fire loss is $16,000
Employees – 29 40 31
Transactions 38,000 – 19,000 76,000
Department direct costs $ 350,000 $ 147,000 $ 950,000 $ 3,750,000
Allocate the cost of the service departments to the operating departments using the direct method.
Answer:
Administration Cost Allocated To Domestic is $197,183.
Administration Cost Allocated To International is $152,817.
Accounting Cost Allocated To Domestic is $29,400.
Accounting Cost Allocated To International is $117,600.
Explanation:
The Direct Method used for allocating Services Departments Cost to Operating Departments ignores the services used by service departments and allocate costs just to operating departments based on each department's consumption of allocation base. So, the costs of Administration and Accounting departments will be allocated to Domestic and International Departments.
Allocation of Administration Department Cost:
Domestic
Direct Cost of Administration * (No. of Employees in Domestic / Total No. of Employee in Operating Departments)
⇒ 350,000 * (40 / 71) = $197,183.
International
Administration Cost Allocated = 350,000 * (31 / 71) = $152,817.
Allocation of Accounting Department Cost:
Domestic
Direct Cost of Accounting * (No. of Transactions in Domestic / Total No. of Transactions in Operating Departments)
⇒ 147,000 * (19,000 / 95,000) = $29,400.
International
Accounting Cost Allocated = 147,000 * (76,000 / 95,000) = $117,600.