BUSINESS COLLEGE

The average annual return over the period 1886-2006 for stocks that comprise the S&P 500 is 8%, and the standard deviation of returns is 20%. Based on these numbers what is a 95% confidence interval for 2007 returns?

Answers

Answer 1

Answer:

Answer:

The confidence interval for 2007 returns are 32%, 48%

Explanation:

As per 9% rule

Range = mean +/- 2*Standard deviation

Range = 8 +/- 2*20

Range = 8-40 to 8+40

Range = -32 to 48

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Sorin Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,600 units)$108,000 Variable expenses 49,680 Contribution margin 58,320 Fixed expenses 44,300 Net operating income$14,020 If the company sells 4,300 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)
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Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries. Total spending for the federal government of Lilliput for the last fiscal year was $ 1.06 billion. The country collected $ 1.05 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance

Answers

Answer:

The formula to calculate the Budget Balance is

Government Income - Government Expenditure

in this case

$1.05 billion - $1.06 billion = - 0.01 billion or - $100 million

Explanation:

A budget balance is reached when a government expenditures are equal to it's income.

In this case, since the country's only source of income it is slightly less than than what is required to run the government, it has a budget deficient.

Since the country does not export or trade with outside countries, the government will need to take out a loan to make up for this deficient.

Use the following selected balance sheet and income statement information for Caroline Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.Operating profit before tax Earnings without interest expense (EWI) Average total assets Sales Tax rate on operating profit
$58,300 $93,400 $360,600 $1,135,420 35%

Answers

Answer:

3.15 times

Explanation:

Asset turnover = Sales revenue / Average total assets

Asset turnover = $1,135,420 / $360,600

Asset turnover = 3.15 times

Wentworth's Five and Dime Store has a cost of equity of 11.4 percent. The company has an aftertax cost of debt of 5 percent, and the tax rate is 35 percent. If the company's debt–equity ratio is .74, what is the weighted average cost of capital?

Answers

Answer:

WACC = 6.66%

Explanation:

Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund

WACC = (Wd×Kd) + (We×Ke)

After-tax cost of debt = Before tax cost of debt× (1-tax rate)

Kd-After-tax cost of debt = 5%

Ke-Cost of equity = 11.4%

Wd-Weight f debt -74%

We-Weight of equity = 26%

WACC = (0.74× 5%) + (0.26 × 11.4%) = 6.66%

WACC = 6.66%

Rooney Company established a predetermined variable overhead cost rate at $9.40 per direct labor hour. The actual variable overhead cost rate was $8.40 per hour. The planned level of labor activity was 74,900 hours of labor. The company actually used 79,900 hours of labor. Required Determine the total flexible budget variable overhead cost variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Answers

Answer:

$32,900 favorable

Explanation:

The computation of the total flexible budget variable overhead cost variance is shown below:

= Total budgeted overhead cost - actual budgeted overhead cost

where,

Total budgeted overhead cost is

= $9.40 × 74,900 hours

= $704,060

And, the actual budgeted overhead cost is

= $8.40 × 79,900 hours

= $671,160

So, the total flexible budget variable overhead cost variance is

= $704,060 - $671,160

= $32,900 favorable

Since the standard cost is greater than the actual cost so it would have favorable variance

The purpose of sobriety checkpoints that are set up by community and state police is to deter drunk driving and ultimately save lives.While not mandated,the makers of Blackberry™ have complied with the public request of several legislators and have obediently removed apps that permit smartphone users to navigate around the checkpoints.Google™ and Apple™ have elected not to honor such requests.Google said the apps do not violate the company's content policy.After studying about ethics and social responsibility,which of the following statements applies to this situation? A) Laws represent the minimum guidelines that companies must follow,whereas a firm's ethical stance may venture beyond the minimum level of compliance.
B) Google and Apple are showing corporate social responsibility because they demonstrate concern for their investors,which is exactly where their focus should be.
C) Blackberry is acting philanthropically toward government.
D) Google and Apple are showing their distrust for big government,and their avoidance of contributing toward philanthropic causes.

Answers

Answer:

A) Laws represent the minimum guidelines that companies must follow,whereas a firm's ethical stance may venture beyond the minimum level of compliance.

Explanation:

In the given scenario there are laws that allows community and state police to set up sobriety check points that discourages drunk drivers and saves lives.

The inclusion or removal of applications that helps drunk drivers avoid these checkpoints is not covered by the law. So if a company decides to include such applications it is at their discretion.

Blackberry have chosen to remove applications that helps drunk drivers avoid checkpoints. This is an example of when a company has ventured beyond the minimum level of compliance because of their ethical stance.

Google and Apple however have only ventured beyond the minimum compliance level because they have refused to honour requests by legislators to remove apps that permit smartphone users to navigate around the checkpoints.

The statement that applies to this situation is : "Laws represent the minimum guidelines that companies must follow, whereas a firm's ethical stance may venture beyond the minimum level of compliance."

The correct answer is option A

In the scenario described, the companies are facing a situation where lawmakers have requested the removal of apps that allow users to navigate around sobriety checkpoints.

Option A is the most suitable because it reflects the fundamental distinction between legal compliance (following the law) and ethical behavior (going beyond what the law mandates). Let's break it down further:

Laws represent the minimum guidelines that companies must follow: This statement acknowledges that companies are legally obligated to comply with the laws and regulations of the jurisdictions in which they operate. In this case, lawmakers have made a request, but it's not legally mandated to remove these apps.

A firm's ethical stance may venture beyond the minimum level of compliance: This part of the statement highlights that ethical behavior goes beyond what is legally required.

Therefore, option A is correct.

Learn more about ethical behavior here:

brainly.com/question/27962109

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If a customer values good A at $15, and it costs the firm $10 to produce, current profit per unit is