tock has had returns of 16 percent, 23 percent, 15 percent, −11 percent, 30 percent, and −5 percent over the last six years. What are the arithmetic and geometric average returns for the stock?

Answers

Answer 1

Answer:    arithmetic Average Return =11.33%

                  Geometric Average Return=10.33%

Explanation:

Returns per year

Year 1      16%

year 2       23%

year 3       15

year 4      -11%  

year 5     30 %

year 6      -5%

Total =    68%

Arithmetic Average = Total returns 0f ( year 1 -6) / number of years

= 68%/6 =11.33%

Geometric Average Return  is given as

= ((1 + R1) × (1 + R2) × ... × (1 +Rn))(1/n) - 1

((1 + 16%) × (1 + (23%)) × (1 + 15%) x (1+ -11%) x (1+30%)  x (1+ -5%))^1/6 - 1

((1.16 x 1.23 x 1.15 x 0.89 x 1.30  x (0.95)) ^1/6

((1.16 x 1.23 x 1.15 x 0.89 x 1.30   x 0.95)) ^1/6 -1

(1.8035073 )^1/6  - 1

= 1.10328 -1 = 0.10328 x 100 = 10.328%   =10.33%


Related Questions

If a nation has a higher level of technology than another nation it means that they will be able to produce:

Answers

Answer: b. more outputs with the same inputs.

Explanation:

Better technology means that labor will be more efficient in the production of goods and services. A country with a higher level of technology therefore will be more efficient in production than a country that is not and this will lead to them producing more output with the same input than the other country.

For instance, a country with technology that is able to reduce the wastage of wood will produce more furniture than a country without that technology.

During its first year of operations, Anthony Lupa set up Lupo Inc. and invested $15,000 in the corporation. The company earned $35,000 of revenues and incurred $23,000 of expenses. A cash dividend of $2,000 was paid to Anthony. At the end of the year, the company's equity totaled:

Answers

Answer:

At the end of the year, the company's equity totaled: $25,000

Explanation:

The company earned $35,000 of revenues and incurred $23,000 of expenses.

Net income = Revenue - Expenses = $35,000 - $23,000 = $12,000

Retained earnings of the company = Net income - Cash dividend = $12,000 - $2,000 = $10,000

At the end of the year, the company's equity = Anthony Lupa's invested + Retained earnings =  $15,000 + $10,000 = $25,000

Expected loss for an overbooking reservation strategy would be calculated by multiplying the loss for each no-show possibility and its probability of occurrence, and then adding the products.a) trueb) false

Answers

Answer: True

Explanation:

An overbooking strategy simply has to do with hotels booking more rooms than what is available because they know that some of the reservations will be cancelled.

The Expected loss for an overbooking reservation strategy would be calculated by multiplying the loss for each no-show possibility and its probability of occurrence, and then adding the products.

Pestiferous Manufacturing produces a chemical pesticide and uses process costing. There are three processing departmentslong dash​Mixing, ​Refining, and Packaging. On January​ 1, the first departmentlong dashMixinglong dashhad no beginning inventory. During​ January, 47,000 fl. oz. of chemicals were started in production. Of​ these, 38,000 fl. oz. were​ completed, and 9,000 fl. oz. remained in process. In the Mixing​ Department, all direct materials are added at the beginning of the production​ process, and conversion costs are applied evenly throughout the process. At the end of​ January, the equivalent unit data for the Mixing Department were as​ follows: UNITS Equivalent Units Equivalent Units Units to be accounted for Direct Materials Costs Conversion Costs Completed and transferred out 38,000 38,000 38,000 Ending workminusinminus​process* 9,000 9,000 3,960 47,000 47,000 41,960 ​* Percent complete for conversion​ costs: 44% In addition to the​ above, the cost per equivalent unit were $ 1.35 for direct materials and $ 5.20 for conversion costs. Using this​ data, calculate the full cost of the ending WIP balance in the Mixing Department. The weightedminusaverage method is used.
A. $ 63,450
B. $ 41,960
C. $ 32,742
D. $ 12,150

Answers

Answer:

C. $ 32,742

Explanation:

The cost per equivalent unit were $ 1.35 for direct materials and $ 5.20 for conversion costs.

The Ending Work In Process has Equivalent Units  9000 complete as to materials and 44% complete as to Conversion Costs.

So the costs will be

Materials = 9000 *100% * $ 1.35 = $ 12150

Conversion = 9000 * 44% * 5.20 = $ 20592

Total Costs $ 32742

The Ending Work in Process costs are found by multiplying the unit costs with the Equivalent number of units multiplied with the percentage of completion.

McCurdy Co.'s Class Q bonds have a 12-year maturity, $1,000 par value, and a 5.75% coupon paid semiannually (2.875% each 6 months), and those bonds sell at their par value. McCurdy's Class P bonds have the same risk, maturity, and par value, but the P bonds pay a 5.75% annual coupon. Neither bond is callable. At what price should the annual payment bond sell

Answers

Answer:

$993.08

Explanation:

the market interest is 2.875% semiannual, that is why Q bonds are sold at par. To determine the value of P bonds we must add the present value of the face value and the coupon payments:

the effective interest rate = (1 + 5.75%/2)² - 1 = 5.83%

PV of face value = $1,000 / (1 + 5.83%)¹² = $1,000 / 1.974405523 = $506.48

PV of coupon payments = $57.50 x 8.46254 (PV annuity factor, 5.83%, 112 periods) = $486.60

market price = $993.08

If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%

Answers

Answer:

PV= $30,111.98

Explanation:

Giving the following information:

Future value= $60,000

Number of periods= 8

Interest rate= 9%

To calculate the initial investment, we need to use the following formula:

FV= PV*(1+i)^n

Isolating PV:

PV= FV/(1+i)^n

PV= 60,000 / 1.09^8

PV= 30,111.98

Task _____ is the characteristic of a job that refers to how predictable job duties are from one day to the next.

Answers

Answer:

variability

Explanation:

When a worker is performing a task, he or she might come across a situation that is not expected or a situation not experienced before. Task variability enables the prediction of certain tasks, especially where those task are standardized and repetition of such reduces task variability.

Also, any exceptions experienced when carrying out a duty either in a new situation or at any stage in the value creation process, such would eventually make task variability high. In other words, take variability refers to the numbers of exceptions, a worker experienced when carrying out a duty.

Francisco Olivas of Olivas Medical Supply Company was reading the financial statements of Alvear Corp. to decide whether he wanted to try to acquire the company. He noticed some mistakes in the Alvear Corp. Income Statement:

Answers

Answer:

Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes is $0.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file file for the complete question.

The explanation of the answer is now provided as follows:

Operating income refers to the amount of profit that a business realized from its operations after operating expenses have been deducted.

Operating expenses are cost incurred by a business in its normal business operations.

The following two mistakes are prominent in the income statement in this question:

1. Gain on sale of equipment is included as part of Total Revenue instead of including under Other Income.

2. Interest Expense is included as part of operating expenses instead of including it under Interest income (expenses).

To correct this mistake, the income statement is prepared again appropriately using a Multi-step income statement format that shows gross profit and the detailed of each category of expenses and incomes to arrive at the net income.

Note: See the attached excel file for the new multi-step income statement that shows Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes.

In the attached excel file, Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes is $0 (see red color).

In most situations, the UCC uses the test of _____ for determining when a person is excused from performing contractual obligations.

Answers

Answer:

commercial impracticability.

Explanation:

Uniform Commercial Code (UCC) is a set of comprehensive, codified, and modernized business laws that regulate commercial transactions and financial contracts across different state in the United States of America.

The U.C.C isn't a federal law, but a uniformly adopted state law with the sole aim and purpose to create uniformity of law across multiple court jurisdictions in the United States of America. It is called the backbone of American commerce because it has been adopted by all 50 states, in whole or in large part and thus, enhancing commercial transactions or business to thrive significantly.

In most situations, the uniform commercial code (UCC) uses the test of commercial impracticability for determining when a person is excused from performing contractual obligations.

Commercial impracticability can be defined as the inability to perform a contractual obligation or act based on terms that are considered to be reasonable in commerce.

Additionally, the cause of this inability to perform are typically unforseen or unanticipated.

Reeve has worked as an administrator with employer-sponsored health insurance at Big Company for 10 years and has been diagnosed with a serious heart condition. An offer for a great job at Up and Coming Company with great opportunities for advancement, although it pays slightly less, has been extended to Reeve. Up and Coming has health insurance, but the insurance coverage excludes any preexisting health condition for six months. Reeve says that taking the job at Up and Coming would make continuing health insurance from Big Company unaffordable. Up and Coming wants Reeve to start immediately. What would you advise Reeve to consider?

Answers

Answer:

My advice would be for Reeve to take up the job offer at Up and Coming Company and engage in the private health insurance of himself pending when he would be eligible to be enrolled in a sponsored health insurance in his new company.

Explanation:

A bond with a 8-year duration is worth $1,077, and its yield to maturity is 7.7%. If the yield to maturity falls to 7.57%, you would predict that the new value of the bond will be approximately _________.

Answers

Answer:

$1,085.35

Explanation:

we can use the approximate yield to maturity formula to determine the market price of the bond if the interest rate falls to 7.57%

but first we need to calculate the coupon:

YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]

0.077 = {coupon + [(1,000 - 1,077)/8]} / [(1,000 + 1,077)/2]

0.077 = {coupon - 9.625} / 1,038.50

0.077 x 1,038.50 = coupon - 9.625

79.9645 = coupon - 9.625

coupon = 79.9645 + 9.625 = $89.5895 ≈ $89.60

now we can calculate the new market price for the bond:

YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]

0.0757 = {89.60 + [(1,000 - MV)/8]} /

0.0757 x [(1,000 + MV)/2] = 89.60 + [(1,000 - MV)/8]

0.0757 x (500 + 0.5MV) = 89.60 + 125 - 0.125MV

37.85 + 0.03785MV = 214.60 - 0.125MV

0.16285MV = 176.75

MV = 176.75 / 0.16285 = $1,085.35

What is the present value of a $1,200 payment made every year forever when interest rates are 4.5 percent

Answers

Answer:

26,666.67

Explanation:

A $1,200 payment is made forever

The interest rate is 4.5%

= 4.5/100

= 0.045

Therefore the present value can be calculated as follows

= 1,200/0.045

= 26,666.67

Hence the present value is 26,666.67

When making decisions, managers should consider all relevant benefits and relevant costs, which include: (Check all that apply.)

Answers

Answer: e. a, b and c

Explanation:

Opportunity costs are very important costs to look at because they help a company know if they are picking the best alternative available to them.

Out-of-pocket costs are also quite important because the company needs to know if there is a chance that they will have to pay for special features in the project that are not part of the original project but need to be paid for anyway as these monies come out of the cash reserve.

Incremental costs focus on the additional costs involved in a project and so are very important. When making a decision for processing a good further for instance, management needs to know if the incremental cost will be covered by the extra profit that will be gained.

When making decisions, managers should consider all relevant benefits and relevant costs, which include:

a. Opportunity costs

b. Out-of-pocket costs

c. Incremental costs

The correct answer is: e. a, b, and c

What is the decisions making?

Direct costs are the specific expenses that are directly linked to a decision or action. They include the cost of materials, the payment for labor, and the cost of equipment.

Indirect costs are expenses that are not directly related to a specific decision but still affect the overall decision-making process. These can be expenses like rent, salaries, or other costs needed to run a business or organization.

Read more about  decisions making here:

https://brainly.com/question/1249089

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See text below

When making decisions, managers should consider all relevant benefits and relevant costs, which include: (Check all that apply.)

a. Opportunity costs

b. Out-of-pocket costs

c. Incremental costs

d. Sunk costs

e. a, b and c

f. Of All of the above

Currently Ark is charged $3,144,267 Depreciation on the Income Statement of Andrews. Andrews is planning for an increase in this depreciation. On the financial statements of Andrews will this

Answers

Question Completion:

A)Have no impact on the Net Cash from Operations as depreciation appears in both the Cash Flow and the Income Statement

B)Decrease Net Cash from Operations on the Cash Flow Statement

C)Increase Net Cash from Operations on the Cash Flow Statement

D)Just impact the balance sheet

Answer:

C)Increase Net Cash from Operations on the Cash Flow Statement

Explanation:

When Andrews increases the depreciation charge of $3,144,267 to a higher amount, this will decrease the net operating income.  In computing the adjustment to net income for non-cash expenses, the increased depreciation will automatically increase the net cash from operations because of the tradeoff effects.  So, on the financial statements of Andrews, specifically on the Statement of Cash Flows, the increased depreciation expense or charge will positively increase the net cash from operating activities.

Headland Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed. Vacation Pay to Earnings to Weekly Be Received Employee July 31 Pay in August Mark Hamill $5,320 $290Karen Robbins 4,620 240 $480Brent Kirk 3,820 200 400Alec Guinness 8,520 340Ken Sprouse 9,120 420 840 Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $8,120 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $107,920 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of $107,920.
Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities.

Answers

Answer:

                          accumulated to July 31      Weekly Pay    Vacation Pay

Mark Hamill                $5,320                           $290

Karen Robbins           $4,620                            $240                  $480

Brent Kirk                    $3,820                           $200                  $400

Alec Guinness            $8,520                            $340

Ken Sprouse               $9,120                            $420                  $840

 

Entries for wages expenses:

Weeks 1 and 4:

Dr Wages expense  1,490

    Cr Federal income tax withholdings payable 149

    Cr FICA taxes withholdings payable 113.99

    Cr Union dues withholdings payable 29.80

    Cr Cash 1,197.21

Weeks 2 and 3:

Dr Wages expense 630

Dr vacation wages expense 860

    Cr Federal income tax withholdings payable 149

    Cr FICA taxes withholdings payable 113.99

    Cr Union dues withholdings payable 29.80

    Cr Cash 1,197.21

Entries for wages expenses:

Weeks 1, 2, 3 and 4:

Dr FICA tax expense 113.99

Dr FUTA tax expense 5.84

Dr SUTA tax expense 18.25

    Cr FICA tax payable 113.99

    Cr FUTA tax payable 5.84

    Cr SUTA tax payable 18.25

Since taxes and other expenses are paid once a month, the journal entry to record their payment:

Dr Federal income tax withholdings payable 596

Dr FICA tax payable 455.96

Dr FICA taxes withholdings payable 455.96

Dr Union dues withholdings payable 119.20

Dr FUTA tax payable 23.36

Dr SUTA tax payable 73

    Cr Cash 1,723.48

Last year Electric Autos had sales of $175 million and assets at the start of the year of $300 million. If its return on start-of-year assets was 15%, what was its operating profit margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places)

Answers

Answer:

Operating profit margin = 25.71%

Explanation:

Amount of return on asset = Rate of return x Asset value

Amount of return on asset = 15% x $300,000,000

Amount of return on asset = $45,000,000

Operating profit margin = Amount of return on asset / Sales

Operating profit margin = $45,000,000 / $175,000,000

Operating profit margin = 0.257143

Operating profit margin = 25.71%

Imagine that you are holding 5,000 shares of stock, currently selling at $40 per share. You are ready to sell the shares but would prefer to put off the sale until next year for tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike of $45 are selling at $2, and January puts with a strike price of $35 are selling at $3.
1. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at:
(a) $30
(b) $40
(c) $50
2. Compare these proceeds to what you would realize if you simply continued to hold the shares.

Answers

Answer:

1. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at:

(a) $30  ⇒ $170,000

(b) $40   ⇒ $195,000

(c) $50  ⇒ $220,000

call strike price $45

call premium received $2

put strike price $35

put premium paid $3

you pay $2 - $3 = -$1

                                                           stock price

                                             $30              $40               $50

stock value                           $30              $40               $50

put value                                $5                 -                     -

call value                                 -                   -                   -$5

premium paid                        -$1                -$1                 -$1

net stock value                     $34              $39               $44

total # of stocks                 5,000          5,000           5,000

portfolio's value             $170,000     $195,000    $220,000

2. Compare these proceeds to what you would realize if you simply continued to hold the shares.

if you hold the stocks:

(a) $30  ⇒ $150,000 - $170,000 = -$20,000 (you gain by using a collar)

(b) $40   ⇒ $200,000 - $195,000 = $5,000 (you lose by using a collar)

(c) $50  ⇒ $250,000 - $220,000 = $30,000 (you lose by using a collar)

Which of the following is NOT a standard approach to writing body copy? A) straightforward B) narrative C) alliteration D) translation E) explanation

Answers

Answer:

C. Alliteration

Explanation:

Hope this helps!

When a municipal dealer gives a customer a "bond appraisal," he is disclosing:_________.

Answers

Answer: a likely price that the bonds can be sold which are based on market prices of similar securities

Explanation:

An appraiser bond is an insurance which is bought by appraise which show that they comply with certain laws and regulations. It gives confidence to the buyer of a home that their appraiser will be honest with them concerning the worth of the house.

When a municipal dealer gives a customer a "bond appraisal," he is disclosing a likely price that the bonds can be sold which are based on market prices of similar securities

Company expected to incur $9,450 in manufacturing overhead costs and use 4,500 machine hours for the year. Actual manufacturing overhead was $9,400 and the company used 5,050 machine hours.
1. Calculate the predetermined overhead allocation rate using machine hours as the allocation base.
_______ / _________ = Predetermined overhead allocation rate
________/ __________ = ____ per machine hour
2. How much manufacturing overhead was allocated during the? year?
________ x ________ = overhead allocated
________ x _________ = ____________

Answers

Answer:

1.Predetermined overhead allocation rate = $2.10 per Machine Hour

2.Overhead allocated = $10,605

Explanation:

1.   Predetermined overhead allocation rate

using

Estimated manufacturing overhead costs / Estimated Machine Hours = Predetermined overhead allocation rate

=$9,450 / 4,500 Machine Hours = $2.10 per machine hour

Therefore,

Predetermined overhead allocation rate = $2.10 per Machine Hour

2. Manufacturing overhead allocated during the year

Actual Machine Hours Used x Predetermined overhead allocation rate = Overhead allocated

5,050 machine hours x $2.10 per Machine Hour = $10,605

Therefore,

Overhead allocated = $10,605

Under FINRA rules, to recommend a direct participation program to a customer, the registered representative must ascertain that the customer:_______.

Answers

Answer:

has a fair market net worth sufficient to sustain the risks of the program.

Explanation:

FINRA is an acronym for Financial Industry Regulatory Authority. It is a non-profit agency in the United States of America, which is saddled with the responsibility of handling the licensing and regulation of broker-dealers in securities.

A direct participation program (DPP) can be defined as a financial security which gives an investor (customer) access to the cash flow and tax benefits of a business venture.

Under FINRA rules, to recommend a direct participation program (DPP) to a customer, the registered representative must ascertain and ensure that the customer has a fair market net worth that is considered to be sufficient to sustain the risks associated with the program, including loss of investment and lack of liquidity.

Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425,000, and land, $125,000) on January 1, 2018. Kellerman signed a 20-year, 6% mortgage payable. Kellerman will make monthly payments of $3,940.37. Round to two decimal places.
a. Journalize the mortgage payable issuance on January 1, 2018. Date Credit Debit 425000 15000 Non BUnding 550000 morigage payuple Prepare an amortization schedule for the first two payments. Principal Amortization
b. Carrying Value Cash Interest Date Payment Expense Borrow Date First Pmt Second Pmt
c. Journalize the first payment on January 31, 2018. Date Debit Credit
d. Journalize the second payment on February 28, 2018. Debit Credit Date

Answers

Answer:

a,                       Journal Entry

Date        Account Title           Debit            Credit  

Jan 1           Building             $425,000  

                   Land                  $125,000  

                      Mortgage payable               $550,000

b.  Date                 Interest       Cash        Principal       Carrying

                             expense     payment  amortization   value

Borrow date                                                                    $550,000

First payment        $2,750       $3,940.37  $1,190.37    $548,809.63

Second payment   $2,744.05 $3,940.37  $1,196.32    $547,613.31

Working

First payment date

Interest expenses = 550,000 x 6% x 1/12 = 2,750

Cash payment = 3,940.37

Principal amortization = 3,940.37 - 2,750 = 1,190.37

Carrying value = 550,000 - 1,190.37 = 548,809.63

Second payment date

Interest expenses = 548,809.63 x 6% x 1/12 = 2,744.05

Cash payment = 3,940.37

Principal amortization = 3,940.37 - 2,744.05 = 1,196.32

Carrying value = 548,809.63 - 1,196.32 = 547,613.31

c.                                     Journal

Date        Account Title                Debit        Credit

Jan 31     Mortgage payable    $1,190.37  

               Interest expense       $2,750  

                     Cash                                      $ 3,940.37

d .                                     Journal

Date        Account Title                Debit          Credit

Feb 28    Mortgage payable      $1,196.32  

               Interest expense        $2,744.05

                     Cash                                         $3,940.37

What financial reporting issues would arise as a result of making a foreign direct investment?

Answers

Answer: Converting foreign GAAP to the parent company GAAP; Translating currency.

Explanation:

A foreign direct investment is simply an investment that is made by a particular individual or firm in a particular nation even though the interests of the business are being located in another nation.

The financial reporting issues would arise as a result of making a foreign direct investment are the conversion of foreign GAAP to the parent company GAAP and the translation of currency.

Which of the following is not a potential problem when estimating and using betas, i.e., which statement is false?
A. The beta of an "average stock," or "the market," can change over time, sometimes drastically.
B. Sometimes, during a period when the company is undergoing a change such as toward more leverage or riskier assets, the calculated beta will be drastically different from the "true" or "expected future" beta.
C. The beta coefficient of a stock is normally found by regressing past returns on a stock against past market returns. This calculated historical beta may differ from the beta that exists in the future.
D. The fact that a security or project may not have a past history that can be used as the basis for calculating beta.
E. Sometimes the past data used to calculate beta do not reflect the likely risk of the firm for the future because conditions have changed.

Answers

Answer:

a.) The beta of an "average stock," or "the market," can change over time, sometimes drastically.

Explanation:

Estimation using betas in finance can be associated to the (CAMP) Capital Asset Pricing Model, it allows the calculation of volatility of the stock in relation to the market.

It should be noted that there are potential problems that can be experienced when estimating and using betas, and these are;

1) Sometimes, during a period when the company is undergoing a change such as toward more leverage or riskier assets, the calculated beta will be drastically different from the "true" or "expected future" beta.

2)The beta coefficient of a stock is normally found by regressing past returns on a stock against past market returns. This calculated historical beta may differ from the beta that exists in the future.

3)The fact that a security or project may not have a past history that can be used as the basis for calculating beta.

4) Sometimes the past data used to calculate beta do not reflect the likely risk of the firm for the future because conditions have changed.

Hence among the given option, option A is false.

Which of the following statements regarding early termination of a forward contract is most accurate?
A. Early termination through an offsetting transaction with the original counterparty eliminates default risk.
B. A party who terminates a forward contract early must make a cash payment.
C. A party who enters into an offsetting contract to terminate has no risk.

Answers

Answer: A. Early termination through an offsetting transaction with the original counterparty eliminates default risk.

Explanation:

A Forward contract is an agreement between two parties that obligates one party buying the asset that the seller will sell at a certain price and at a certain point in future.  

If the contract is terminated early but there is an offsetting transaction which mirrors the contract obligation then that means that the obligation has been settled and so the default risk which is the risk that one party was not going to fulfil their obligation will be eliminated.

A company's income before interest expense and income taxes is $200,000 and its interest expense is $70,000. Its times interest earned ratio is:__________

Answers

Answer:

2.86

Explanation:

The times interest earned ratio is used basically to measure a firm's capacity to pay up it's debt. In other words, it is a covenant for loan which is primarily used by lenders to their debtors.

Times interest earned is calculated by dividing income before interest expense and income taxes by interest expense

= $200,000 / $70,000

= 2.86

Consider the statements. Indicate whether each statement falls mainly under the field of microeconomics or macroeconomics.
1. A tax on tires increases the price of tires Microeconomics Macroeconomics
paid by car owners.
2. As a result of a severe recession, the total
output gross domestic product of a nation falls
by 4%.
3. Increased consumer spending causes the
national unemployment rate to fall.
4. Increased consumer spending causes the rate
of rate of inflation to rise
5. Optimism about future car sales leads General
Motors to hire more auto workers.
6. Robotic technology reduces the demand for auto
workers.

Answers

Answer:

1. Microeconomics

2. Macroeconomics

3. Macroeconomics

4. Macroeconomics

5. Microeconomics

6. Microeconomics

Explanation:

Macroeconomics can be described as the study of the behavior of an overall economy. Macroeconomics studies issues that are related to the whole economy such as changes in unemployment, economic growth rate, national income, inflation, price levels, and gross domestic product (GDP).

On the other hand, Microeconomics can be described as the behavior of economic agents such as individuals and firms as regards their decision making relating the scarce resources allocation and the interactions among the economic agents.

Based on the above explanation, we can have the following categorizations:

1. A tax on tires increases the price of tires paid by car owners. This is Microeconomics because it concerns the behavior of individuals, i.e., car owners.

2. As a result of a severe recession, the total output gross domestic product of a nation falls by 4%.. This Macroeconomics because it concerns the gross domestic product which total values of goods produced in an economy.

3. Increased consumer spending causes the national unemployment rate to fall. This is Macroeconomics because it relates the national unemployment.

4. Increased consumer spending causes the rate of rate of inflation to rise. This is Macroeconomics because it relates an increase in inflation rate.

5. Optimism about future car sales leads General Motors to hire more auto workers. This is Microeconomics because it relates to the decision and action of a firm, i.e. General Motors.

6. Robotic technology reduces the demand for auto workers.This is Microeconomics because it relates to the decision and action of individuals, i.e. auto workers.

Based on the definitions of microeconomics and macroeconomics, the statements below fall under:

Macroeconomics:

2. As a result of a severe recession, the total  output gross domestic product of a nation falls by 4%. 3. Increased consumer spending causes the  national unemployment rate to fall. 4. Increased consumer spending causes the rate of inflation to rise

Microeconomics:

1. A tax on tires increases the price of tires  paid by car owners.5. Optimism about future car sales leads General  Motors to hire more auto workers.6. Robotic technology reduces the demand for auto  workers.

Macroeconomics relates to issues that affects the economy as a whole as opposed to a single industry or firm. A decrease in GDP, issues regarding national unemployment and inflation rising are therefore macroeconomic as they affect the entire economy.

Microeconomics on the other hand, relates to issues affecting an industry or only a single entity. This is why the other entries are microeconomics as they relate to a single industry.

Find out more at https://brainly.com/question/21123344.

After receiving a reward for information leading to the arrest of a notorious criminal, you are considering investing it in an annuity that pays $5,000 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity

Answers

Answer:

The maximum that should be paid for this annuity today is $62311.05

Explanation:

To calculate the maximum that should be paid for the annuity, we will calculate the present value of annuity. As the cash flow from annuity occur at the end of the period, it is an ordinary annuity. The formula for the present value of ordinary annuity is attached.

Present value = 5000 * [ 1 - (1+0.05)^-20 / 0.05 ]

Present value = $62311.05171 rounded off to $62311.05

The __________ component deals with the management and control of the ways entities are granted access to resources.

Answers

Answer:

Access management

Explanation:

The "access management" component deals with the management and control of the ways entities are granted access to resources.

Access management regulates the ways and methods entities are granted access to resources. It determines which user is able to access the resources.

An increase in the supply of money will lead to a(n) _____ in equilibrium real GDP and a _____ equilibrium interest rate.

Answers

Answer:

Increase and decrease

Increase, decrease.

The following information should be considered:

In the case when there is an increase in the supply of money so there should be increasein the real GDP. While on the same time, there is the decrease in the rate of interest.

Learn more: brainly.com/question/17429689

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