Tony purchased 100 shares of T-Rex stock for $43 a share. On the same day, Sam also purchased 100 shares of T-Rex stock for $43 a share. Tony paid cash for his purchase while Sam used margin. The initial margin requirement on this stock is 60 percent while the maintenance margin is 40 percent. Both Tony and Sam sold their shares after eight months at a price of $40 a share. The stock pays no dividends. Tony had a holding period percentage return of _ percent as compared to Sam's _ percent return. Ignore margin interest and trading costs.

Answers

Answer 1

Answer:

Answer:

Explanation:

Tony purchased 100 shares of T-Rex stock for $43 a share. On the same day, Sam also purchased 100 shares of T-Rex stock for $43 a share. Tony paid cash for his purchase while Sam used margin. The initial margin requirement on this stock is 60 percent while the maintenance margin is 40 percent. Both Tony and Sam sold their shares after eight months at a price of $40 a share. The stock pays no dividends. Tony had a holding period percentage return of -6.98 percent as compared to Sam's -11.63 percent return. Ignore margin interest and trading costs.

Tony HPR without margin= [100 - ($40-$43)]/(100 x $43)

= -6.98%

Sam HPR without margin= [100 - ($40-$43)]/(100 x $43 x 60%)

= -11.63%

Related Questions

Your family runs a specialty ice cream parlor, Scoops. It manufactures its own ice cream in small batches and sells it only in pint-sized containers. After someone not affiliated with the company sent six pints of your ice cream to a popular talk-show host, she proclaimed on her national TV show that it was the best ice cream she had ever eaten. Immediately after the broadcast, orders came flooding in, overwhelming your small-batch production schedule and your limited distribution system. The company’s shipping manager thinks she can handle it, but you disagree. List the reasons why you need to restructure your channel of distribution.
Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $22,662. Franklin's August bank statement shows $21,837 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 7,350 Outstanding checks $ 5,800 Bank service fees, not yet recorded by company $ 145 The bank collected on a note receivable, not yet recorded by the company $ 870
For fiscal year 2016, Nancy calculated the following costs for Choco-rama’s manufacturing process. Beginning work in process inventory, $22,655 Ending work in process inventory, $28,207 Beginning raw materials inventory, $42,385 Ending raw materials inventory, $44,299 Raw materials purchased, $387,521 Office supplies purchased and used, $15,274 388,400 man-hours of factory labor incurred at $23.60/hour 14,200 man-hours of factory oversight labor incurred at $28.75/hour Administrative salaries, $392,000 Factory utilities, $18,500 Factory depreciation, $9,700 Factory repairs, $15,400
The capital accounts of Harrison and Marti have balances of $160,000 and $110,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Harrison invested an additional $20,000. During the year, Harrison and Marti withdrew $96,000 and $78,000, respectively, and net income for the year was $264,000. The articles of partnership make no reference to the division of net income. Based on this information, the statement ofBased on this information, the statement of partners' equity would show what amount in the capital account for Harrison on December 31?a.$164,000b.$216,000c.$52,000d.$380,000
An apparel manufacturing plant has estimated the variable cost to be $21 per unit. Fixed costs are $1M per year. Forty percent of its business is with one preferred customer and the customer is charged at cost(without profit). The remaining 60% of the business is with several differant customers and they are charged $40 per unit. Find. a.The break even volume for this job. b.The unit cost if 100,000 units are made per year. c.The annual profit for this quantity(100,000 units).

Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $64 billion. Four economists agree that expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used. Economist A believes that the government spending multiplier is 8 and the tax multiplier is 4. Economist B believes that the government spending multiplier is 4 and the tax multiplier is 2. Economist B believes that the government spending multiplier is 4 and the tax multiplier is 8.Compute the amount the government would have to increase spending to close the output gap according to each economist's belief. Then, for each scenario, compute the size of the tax cut that would achieve this same effect.

Answers

Answer:

Check the explanation

Explanation:

Government needs to fill gap of $64 billions

for economist A

Tax multiplier is 2 so in order to fill a output gap of 64 billions, cut taxes by 64/ 2 = 32 billion

tax have to cut by $32 billions

govt spending multiplier is 8, so spendinh has to increase by 64/8=$8 billions.

for economist B

Tax multipler is 8 so to fill a output gap of 64 billions, cut taxes by 64/ 8= 8 billion

tax have to cut by $8 billions

govt spending multiplier is 4, so spending has to increase by 64/4=$16 billions.

⇒This means that Economist C likely believes that:

- Tax cuts induce investment spending and improve workers incentives.This is because cutting the taxes gives an incentive to the workers to work more.

⇒ A rise in government spending completely crowds out private sector spending, because increased govt spending increases the interest rate, hence private spending is crowded out.

Xie Company identified the following activities, costs, and activity drivers for 2017 The company manufactures two types of go-karts Deluxe and Basic.Activity Expected Costs Expected Activity
handling materials $ 625,000 100,000 parts
Inspecting product 900,800 1,500 batches
Processing purchase orders 105,000 700 orders
Paying suppliers 175,000 500 invoices
Ensuring the factory 300,000 40,000 square feet
Designing packaging 75,000 2 models
Required:
1. Compute a single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours
2. In January 2017, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

handling materials $625,000

Inspecting product $900,800

Processing purchase orders $105,000

Paying suppliers $175,000

Ensuring the factory $300,000

Designing packaging $75,000

Total overhead= $2,180,800

First, we need to calculate the plantwide predetermined overhead rate:

Estimated direct-labor hours= 125,000

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 2,180,800/125,000

Predetermined manufacturing overhead rate= $17.45 per direct labor hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Deluxe= 2,500*17.45= $43,625

Basic= 6,000*17.45= $104,700

An investment offers to double your money in 30 months (don’t believe it). What rate per six months are you being offered? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer:

The rate of change in 6 months is 14.87%

Explanation:

Let a be the amount that the money is multiplied in one month. We know that in 30 months it is multiplied by 2, so if we power a by 30 wew obtain 2:

a³⁰ = 2

Thus, 2 = a³⁰ = a⁶*⁵ = (a⁶)⁵

(here we use the propiety a^bc = (a^b)^c = (a^c)^b)

We can conclude that a⁶ = 2^(1/5) = 1.1487

The rate in 6 months is (1.1487-1)*100 = 14.87%

Answer:

14.86% every 6 months

Explanation:

Let the original amount be a

An investment offers to double your money in 30 months i.e. 2a in 30 months

Fv = Pv (1 + x)ⁿ

Fv future value (i.e. future value of the cash flow after a particular time period. )

Pv Present value

x interest

n number of compounding period

Fv = Pv (1 + x)ⁿ

2a = a (1 + x)^(30/6)

2^(1/5)= 1 + x

1.1486 = 1 + x

x = 0.1486 0r 14.86%

The SP Corporation makes 38,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $ 9.70 Direct labor $ 8.70 Variable manufacturing overhead $ 3.55 Fixed manufacturing overhead $ 4.50 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $24.55. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:

Answers

Answer:

Explanation:

The fixed cost is relevant in this situation as it can not be avoided and there would be no other use for the facility.

Unit cost

Direct materials 9.70

Variable manufacturing cost 3.55

Fixed manufacturing overhead 4.50

Direct labor 8.70

Total 26.45

Units produced cost of producing 38,000 = 38000* 26.45 = 1,005,100

Cost of buying 38,000 = 38,000 * 24.55 = 932,900

Cost saved = 1,005,100 - 932,900 =72,200

The job search doesn’t end with the interview. After your interview, be sure to follow up with the appropriate correspondence and contact your references if necessary.After an interview, you are told that the company is unsure of when a decision will be made. Because you have some time and want to make the best impression, what advice should you follow when writing a thank-you letter to your interviewer?
Check all that apply.
O Send a separate letter to each interviewer.
O Use a business letter format.
O Mention something you liked about the interview.
O Send thank-you letters to prospective coworkers.
O Send a quick text to the interviewer

Answers

Answer:

The answers that seem to be correct are *Mention something you liked about the interview and *Use a business letter format. This would be a polite and friendly kind of a feedback mixed with good professionalism.

Explanation:

Now let's see why we rejected the other answer options.

1st of all, Sending a separate letter to each interviewer might be difficult as it could be really difficult to find the contact information of all the interviewers.

Sending thank-you letters to prospective co-workers is not a appropriate thing as you have not been selected still for the job.

Sending a quick text to the interviewer might not be appropriate as well. This is because those who interviewed you during the process are much more experienced and qualified than you and you should maintain your relationship with them professionally and with the utmost respect.

Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information: Account Debit Credit Merchandise inventory, 7/1/17 32,800 Sales 388,000 Sales returns 12,800 Purchases 248,000 Purchase discounts 6,800 Purchase returns 10,800 Freight-in 18,600 In addition, you determine that the June 30, 2018, inventory balance is $40,800. Required: 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold.

Answers

Answer and Explanation:

a. The computation of the cost of goods sold is shown below:

Beginning inventory $32,800

Add: Net purchase

Purchase $248,000

Less: Purchase discount -$6,800

Less: Purchase returns -$10,800

Add: Freight in $18,600

Total net purchased $249,000

Less: ending inventory -$40,800

Cost of goods sold $241,000

2. The year end adjusting entry is

Cost of goods sold Dr $241,000

Ending inventory Dr $40,800

Purchase discount Dr $6,800

Purchase returns Dr $10,800

To Beginning inventory $32,800

To Purchase $248,000

To freight in $18,600

(Being the cost of goods sold is recorded)

Other Questions

The RST Company makes 38,000 parts to be used in its main products. The cost per part at this activity level is: Direct materials $ 6.50 Direct labor $ 6.60 Variable manufacturing overhead $ 3.75 Fixed manufacturing overhead $ 3.45 An outside supplier offered to supply RST Company this part at $18 per unit. If RST Company decides not to make the parts, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost. The annual financial advantage (disadvantage) for the company as a result of buying these parts from the outside supplier rather than making them internally would be: ($186,200) ($87,400) ($43,700) $87,400

When a manager treats employees as lazy, unmotivated, and in need of tight supervision, the employees eventually meet the manager's expectations by acting that way. According to Douglas McGregor, this is known as a(n)___________.

I am having a diffiucult time figuring out the advertising expense. I have plugged in several solutions and they are all incorrect.Listed below are several transactions that took place during the second and third years of operations for RPG Company.Year 2 Year 3Amounts billed to customers for services rendered $ 320,000 $ 420,000 Cash collected from credit customers 230,000 370,000 Cash disbursements: Payment of rent 77,000 0 Salaries paid to employees for services rendered during the year 137,000 157,000 Travel and entertainment 27,000 37,000 Advertising 13,500 32,000 In addition, you learn that the company incurred advertising costs of $24,000 in year 2, owed the advertising agency $4,900 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3.Required:1. Calculate accrual net income for both years.2. Determine the amount due the advertising agency that would be shown as a liability on RPG’s balance sheet at the end of year 2.

FarCry Industries, a maker of telecommunications equipment, has 6 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10 thousand bonds. If the common shares are selling for $27 per share, the preferred shares are selling for $15 per share, and the bonds are selling for 119 percent of par ($1,000), what weight should you use for debt in the computation of FarCry's WACC?