in a 10-year finance lease, warren company recorded a right-of-use asset of $400,000. if the interest rate charged by the lessor was 8%, what would be the balance in the right-of-use asset after two years?

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Answer 1

The balance in the right-of-use asset after two years would be $334,052.

In a finance lease, the lessee records a right-of-use asset and a corresponding lease liability. The lease liability is equal to the present value of lease payments discounted at the interest rate implicit in the lease or the lessee's incremental borrowing rate.

In this case, we know that the interest rate charged by the lessor is 8%, which is also the lessee's incremental borrowing rate.

Using the formula for present value of an annuity due, we can calculate the lease liability as follows:

Lease Liability = $400,000 x [1 - (1 + 0.08)^-10] / 0.08

= $400,000 x 6.7101

= $2,684,040

After two years, the lease liability would be reduced to:

Lease Liability after 2 years = $2,684,040 x [1 - (1 + 0.08)^-8] / 0.08

= $1,142,988

The balance in the right-of-use asset would be equal to the initial balance of $400,000 minus the cumulative lease payments of $807,948 over two years, which gives us:

Right-of-use Asset after 2 years = $400,000 - $807,948

= $334,052

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Related Questions

group life insurance is a single policy written to provide coverage to members of a group. which of the following statements concerning group life is correct? a premiums are determined by age, occupation, and individual underwriting. b 100% participation of members is required in noncontributory plans. c each member covered receives a policy. d coverage cannot be converted when an individual leaves the group.

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Group life insurance is a single policy written to provide coverage to group members. About group life, Noncooperative schemes require 100% participation of members this statement is true. Here option B is the correct answer.

Group life insurance is a type of life insurance policy that provides coverage to members of a group, such as employees of a company or members of an association.

In a noncontributory group life insurance plan, the employer or organization pays the entire cost of the premiums, and 100% participation of eligible members is required. This means that all eligible members of the group must be covered by the policy.

On the other hand, in a contributory group life insurance plan, the cost of the premiums is shared between the employer or organization and the members, and participation is not necessarily 100% required.

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Answer:

100% participation of members is required in noncontributory plans

Explanation:
If the employer pays all of the premium, then all employees must be included. 

what landmark court decision allowed for police departments to create a job analysis to identify the important tasks that must be performed by a police officer?

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The landmark court decision allowed police departments to create a job analysis to identify the important tasks that must be performed by a police officer Guardians Association of New York City Police Department v. Civil Service Commission of New York.

Police Officers include: Discouraging wrongdoings and guaranteeing the local area through high-permeability policing. Watching relegated regions and checking exercises to safeguard individuals/property. Examining wrongdoings and catching thought regulation violators.

The police are essentially answerable for the upkeep of public requests, anticipation, and discovery of wrongdoings in the state. It additionally safeguards the life, freedom, and property of individuals. The wrongdoing is expanding step by step with the expansion in the intricacy of human advancement.

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suppose that an increase in the cost of resources increases the cost of production for the u.s. economy. if the federal government chooses to combat inflation, which of the following would be the best course of action? a. increase expenditure. b. decrease corporate taxes. c. decrease expenditure d. decrease income taxes.

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When it comes to combating inflation, the best course of action the federal government can take is to decrease expenditure. The correct option is c. decrease expenditure.

An increase in the price of resources implies an increase in the cost of output in the US economy. Prices will increase as a result, which will increase inflation. When prices rise and money's purchasing power falls, this is known as inflation. The federal government can spend less on the American economy in order to fight inflation.

This action will guarantee that the government spends less money on numerous economic areas. By cutting costs on government spending on non-essential items or by reducing the number of staff, the federal government could lower its expenditures. By doing this, the government will lower production's overall cost, which will lower the price of goods and services.

This decrease in the price of goods and services will eventually lead to a reduction in inflation rates. Therefore, decreasing expenditure is the best course of action when the government wants to combat inflation. The correct option is c. decrease expenditure.

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roth service co. experienced the following transactions for year 1, its first year of operations: provided $110,000 of services on account.collected $89,000 cash from accounts receivable.paid $41,000 of salaries expense for the year.roth adjusted the accounts using the following information from an accounts receivable aging schedule: number of days past dueamountpercent likely to be uncollectible allowance balancecurrent$9,500 0.01 0-30 4,000 0.05 31-60 2,500 0.10 61-90 2,000 0.30 over 90 days 3,000 0.50 requiredorganize the transaction data in accounts under an accounting equation.prepare an income statement for roth service co. for year 1.what is the net realizable value of the accounts receivable at december 31, year 1?

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The accounting equation for Roth Service Co. is as follows: Assets = Liabilities + Equity. Accounts Receivable + Cash = Accounts Payable + Common Stock + Retained Earnings

Using the transaction data provided, the accounts can be organized as follows:

Accounts Receivable: $110,000 - $89,000 = $21,000

Allowance for Doubtful Accounts:

Current: $9,500 x 0.01 = $95

31-60 Days: $4,000 x 0.05 = $200

61-90 Days: $2,500 x 0.10 = $250

Over 90 Days: $3,000 x 0.50 = $1,500

Total Allowance: $2,045

The net realizable value of accounts receivable at December 31, year 1 is the difference between accounts receivable and the allowance for doubtful accounts:

$21,000 - $2,045 = $18,955

Using this information, we can prepare an income statement for Roth Service Co. for year 1:

Revenue: $110,000

Less: Allowance for Doubtful Accounts: $2,045

Net Revenue: $107,955

Expenses: Salaries Expense: $41,000

Net Income: $66,955

Therefore, the net realizable value of accounts receivable at December 31, year 1 is $18,955.

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a business organization that is owned by many part 2 a. is a survivorship. b. is a partnership. c. is a proprieto

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A business organization that is owned by many D. is a corporation. Option D is the correct answer.

A corporation is a different legal entity from its shareholders. Many of the same legal rights and obligations apply to companies as to people. They can sign contracts, make loans and take loans, sue and be sued, recruit staff, possess assets, and pay taxes.

Limited liability, which prevents its shareholders from being held directly liable for the company's debts, is a crucial component of a corporation. A person or group of individuals with a common objective may establish a corporation. Making money is not a requirement for all of that.

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The complete question is:

A business organization that is owned by many

A. is survivorship.

B. is a partnership.

C. is a proprietorship.

D. is a corporation.

if equilibrium level of real gross domestic product (gdp) is less than the full-employment real gross domestic product (gdp) consistent with the position of the economy's long-run aggregate supply (lras) curve, then the difference between full-employment real gross domestic product (gdp) and current equilibrium real gross domestic product (gdp) is an aggregate demand shock. an aggregate supply shock. a recessionary gap. an inflationary gap.

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The difference between the full-employment real GDP and the current equilibrium real GDP is a recessionary gap.

When the economy is operating below its potential, there is a gap between the actual level of output and the potential level of output. This gap is called a recessionary gap. It occurs when the equilibrium level of real GDP is less than the full-employment level of real GDP. In this situation, the economy is not producing enough goods and services to fully utilize its resources. This gap can be caused by a variety of factors, including a decrease in aggregate demand or an increase in the costs of production due to supply-side shocks.

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which is the correct term used in a resource-constrained project whenever leveling of over-allocated resources will result in the project duration being extended? multiple choice question.

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Resource Levelling is the correct term used in a resource-constrained project whenever leveling of over-allocated resources will result in the project duration being extended. So the option B is correct.

Resource Levelling is a process of allocating resources such as people, cost, and materials to a project in a way that keeps the project on track and on budget. It is used when the capacity of the resources is limited and needs to be shared among different tasks, deadlines, or projects.

Resource levelling ensures that the resources are allocated in a way that maximizes the efficiency of the resources and minimizes delays. It also ensures that the resources are used in the most cost-effective manner. So the option B is correct.

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The complete question is:'

Which is the correct term used in a resource-constrained project whenever leveling of over-allocated resources will result in the project duration being extended?

Multiple choice question.

a) Resource Smoothing

b) Resource Levelling

c) Resource Optimization

d) Resource Allocation

he difference between gnp and gdp is group of answer choices gnp excludes exports and imports. gnp excludes income received from abroad and includes income paid abroad. gnp includes exports and imports. gnp includes income received from abroad and excludes income paid abroad

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The difference between GNP and GDP is option (d) GNP includes income received from abroad and excludes income paid abroad.

GNP (Gross National Product) is the total value of all final goods and services produced by a country's residents, regardless of their location, in a given period of time (usually a year). GNP takes into account the income generated by a country's residents both domestically and abroad.

On the other hand, GDP (Gross Domestic Product) measures the total value of all final goods and services produced within a country's borders in a given period of time, regardless of the nationality of the producers. GDP does not take into account the income generated by a country's residents outside of its borders.

Therefore, the correct option is (d) GNP includes income received from abroad and excludes income paid abroad.

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if total planned expenditures exceed real gdp, the economy will contract, causing production of goods and services to decrease and unplanned inventories to rise. group of answer choices true false

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The given staement that "if total planned expenditures exceed real gdp, the economy will contract, causing production of goods and services to decrease and unplanned inventories to rise"  is false.

If total planned expenditures exceed real GDP, it would result in an increase in production of goods and services in the short run, as firms increase their output to meet the higher demand. This would also lead to a decrease in unplanned inventories as firms sell off their excess inventory to meet the increased demand.

However, in the long run, if the planned expenditures continue to exceed the real GDP, it can lead to inflation and other economic issues. Additionally, if the economy reaches full capacity, the increase in production may not be sustainable, and firms may not be able to meet the higher demand, leading to price increases and supply shortages.

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assume (1) the quantity of materials purchased equals the quantity used in production, (2) the materials spending variance is unfavorable, and (3) the materials quantity variance is favorable. given these assumptions, which of the following statements is true? multiple choice the materials price variance must be favorable. the materials price variance must be equal in amount to the materials quantity variance but unfavorable instead of favorable. the materials price variance could be favorable or possibly unfavorable depending on the standard quantity of material allowed for the actual level of output. the materials price variance must be unfavorable.

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With these assumptions, the statement that is true is "The materials price variance must be favorable.

The materials price variance measures the difference between the actual cost of the materials purchased and the expected cost of the materials purchased. It can be calculated as follows:Materials Price Variance = (Actual Price - Standard Price) x Actual Quantity.The materials spending variance measures the difference between the actual cost of the materials purchased and the expected cost of the materials purchased based on the expected quantity of materials. It can be calculated as follows:Materials Spending Variance = Actual Quantity x (Actual Price - Expected Price)

The materials quantity variance measures the difference between the actual quantity of materials used in production and the expected quantity of materials used in production. It can be calculated as follows:Materials Quantity Variance = Standard Price x (Actual Quantity - Expected Quantity)Based on the assumptions given, the actual quantity of materials purchased equals the quantity used in production. Therefore, the materials quantity variance is favorable because the actual quantity used is less than the expected quantity used, resulting in cost savings.

However, the materials spending variance is unfavorable because the actual cost of the materials purchased is higher than the expected cost based on the expected quantity of materials used.In order for the total materials cost variance (the sum of the materials price variance and the materials quantity variance) to be favorable, the materials price variance must be favorable as well. This means that the actual price of the materials purchased must be lower than the expected price, which would offset the unfavorable materials spending variance.

Therefore, the statement that is true is "The materials price variance must be favorable."

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using the comprehensive model for change, what should managers consider after they have set goals for change?

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Managers can develop a comprehensive change plan that takes into account the resources, timeline, communication, resistance, and metrics necessary for successful implementation.

The Comprehensive Model for Change is a framework that outlines the key steps involved in successfully implementing change within an organization. After managers have set goals for change, the next step is to consider the following factors:

Resources: Managers should evaluate the resources needed to achieve the goals for change. This includes identifying the necessary personnel, financial resources, and technology required for the change initiative.

Timeline: Managers should determine the appropriate timeline for implementing the change initiative. This involves creating a realistic schedule for each phase of the change process and ensuring that it aligns with the organization's strategic objectives.

Communication: Effective communication is crucial for the success of any change initiative. Managers should develop a communication plan that outlines how they will communicate the change to employees and stakeholders, what information will be shared, and how feedback will be collected and addressed.

Resistance: Change often meets resistance from employees who may be hesitant to adapt to new processes or technologies. Managers should identify potential sources of resistance and develop strategies for addressing them.

Metrics: Managers should establish metrics to measure the success of the change initiative. This includes identifying key performance indicators and setting targets for improvement.

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bernice took a job as a ticket taker at the baseball stadium. she has to arrive two hours before each event to work the gate. once the game reaches the bottom of the third inning, her gate is closed, and she can go in to watch the rest of the game. which intangible inducement is the organization offering bernice

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Bernice has been given the intangible inducement of being allowed to watch the rest of the game after closing her gate. One sort of reward or incentive is referred to as an intangible enticement.

This type of reward or incentive cannot be physically touched or measured.

Intangible inducements consist of things like praise, promotions, opportunity for growth and development, and a sense of accomplishment, among other things.

As a direct consequence of this, businesses frequently turn to intangible inducements in the role of incentives in order to inspire and motivate their workforce.

As a result, Bernice has been provided with the non-tangible incentive of being permitted to watch the remainder of the game after she has closed her gate.

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which of the following statements is true of frequent-shopper programs? multiple choice frequent-shopper programs are inexpensive to implement and manage. it is easy to make changes in crm programs. it is clear that crm programs increase customer spending and loyalty. it is hard to gain competitive advantage with crm as programs can be duplicated. the advantages of frequent-shopper programs are unlimited.

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The most accurate statement about frequent-shopper programs is that it is hard to gain competitive advantage with CRM as programs can be duplicated. So, correct option is D.

This is because frequent-shopper programs are widely adopted by many retailers and businesses, making it difficult to differentiate a company's program from its competitors.

While frequent-shopper programs can increase customer spending and loyalty, the benefits are not unlimited. In some cases, the costs of implementing and managing such programs can outweigh the benefits, particularly for smaller businesses.

Additionally, it may not be easy to make changes to CRM programs as they often involve complex data analysis and require significant resources to implement.

Overall, frequent-shopper programs can be a useful tool for businesses to increase customer loyalty and spending, but they are not a guaranteed solution and must be carefully planned and executed to ensure that the costs and benefits are in balance.

Therefore, correct option is D.

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exporting is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time. group of answer choices true false

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False, licensing is an arrangement whereby an organization grants a foreign firm the right to use intellectual properties such as patents, copyrights, manufacturing processes, or trade names for a specific period of time.

In order to do, use, or own something, one must get permission and it is called a license. It can be attained from the government. As a component of their agreement, each party grants the other party a license.

Everyone, from large corporations to the smallest small businesses, uses licensing as a marketing and brand extension tool. Each license applicant has obligations to fulfill in order to maximize the results.

Even these obligations differ to some extent from agreement to agreement between the licensing parties due to the specifics of each agreement.

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when the two newly hired analysts compared notes, they found that their interviews had been quite different. each was long and involved, but the content of the questions varied based on previous employment and education. this means the hiring manager used interviews. group of answer choices unstructured situational behavioral-description structured

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This means the hiring manager used unstructured interviews. The right answer is a.

Unstructured interviews, also known as non-directive interviews, are interviews without a predetermined pattern in which the questions are asked. This lack of structure allows the hiring manager to ask any questions that immediately spring to mind. Unstructured interviews promote open communication and maturity.

Also, it fosters a sense of personal accountability. In an unstructured interview, there is also a chance that the subject could stray or that too much unrelated material will be shared, excluding certain facts that the interviewer wants or needs to know. Also, they take longer than a formal interview.

The correct answer is option a.

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in the long run, an oligopolist is most likely to group of answer choices experience economic profits because of barriers to entry. experience zero economic profits because barriers to entry do not exist in the long run. produce at the most technically efficient output level due to long-run competition. face a straight demand curve.

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In the long run, an oligopolist is most likely to (A). experience economic profits because of barriers to entry because Barriers to entry refer to the obstacles that prevent new firms from entering the market and competing with existing firms.

In an oligopoly market structure, the existing firms usually have significant market power and may use it to prevent new firms from entering the market. This can be done through tactics such as aggressive advertising, price wars, strategic alliances, and patent protection.

Due to these barriers to entry, the existing firms can maintain their market power and charge prices above their average total cost, resulting in economic profits. In the long run, however, these economic profits may attract new firms to enter the market, which can increase competition and reduce the market power of existing firms. This can lead to lower prices and reduced economic profits.

Therefore, the correct answer is (A).

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all of these are environmental forces that affect an organization except which? multiple choice social technological regulatory managerial economic

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The geographic element does not belong to the environmental forces factors that have an impact on an organisation. The correct answer is D. geographical economic.

These are the factors that influence a company. Entrepreneurs are influenced by factors outside of the organisation to change their organisational structure in order to avoid interfering with the achievement of the company's objective. The societal, technological, environmental economic, and political elements are the only ones that qualify.

As a result, the spatial component is not among the environmental forces that have an impact on an organisation. Environmental elements that affect how an organisation behaves include social, economic, technological, competitive, and regulatory forces.Organizations, and more specifically business organisations, and their activities, are always impacted by the environment. The external environment has an impact on each decision that the management team makes for the company. An organisation has both internal and external environments.

Complete question:

All of these are environmental forces that affect an organization except which? multiple choice

A. social technological

B. regulatory

C. managerial economic

D. geographical economic

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binh is a freshman in the uc-davis degree program in veterinary medicine. in 2022, binh paid $3,000 in tuition, $500 for books, and $250 for supplies for class. binh also paid room and board of $3,500. what is the total qualifying education expense for the student loan interest deduction for binh in 2022?

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$7,250 is the total/complete amount of qualifying education expense for the student loan interest deduction for Binh in 2022.

It is calculated as

tuition = $3,000,

books=  $500,

supplies for class = $250.

room and board = $3,500.

By adding them=  $3,000+ $500+  $250+ $3,500= $7,250.

A student loan is a specific kind of loan intended to assist students in covering the costs of post-secondary education and related expenditures, including tuition, books, and living costs.

In comparison to other loan types, it might have a much reduced interest rate and a deferred repayment plan while the borrower is still enrolled in school. In many nations, there are also differences in the stringent laws governing insolvency and renegotiation. This paper identifies the variations in the student loan systems of several developed nations.

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a golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will not be paid a significant severance package. group startstrue or false

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The given statement  "a golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will not be paid a significant severance package" is false because a golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

A golden parachute is an agreement in which an executive gets substantial benefits if their employment is terminated after a merger or acquisition. This agreement is established to protect the executives' interests in case of changes in the company's management, control, or ownership. A golden parachute is a term used to describe a special compensation package for executives of publicly held corporations in the event of a change in corporate ownership.

A hostile takeover is a situation in which one company acquires another without the target company's agreement. This acquisition is completed by purchasing the majority of the target company's shares or assets. In a hostile takeover, the acquiring company can attempt to take control of the target company's board of directors to facilitate the purchase. The acquiring company may or may not notify the target company's management or board of directors in advance.

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which of the following are effects of rising national incomes abroad on us exports? multiple select question. us aggregate demand curve shifts to the right. us exports rise. us aggregate demand curve shifts to the left. foreigners are encouraged to buy fewer us goods. us exports fall. foreigners are encouraged to buy more us products.

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Implications of foreign countries' rising national incomes on US exports The US aggregate demand curve turns right. Foreign buyers are urged to purchase more US goods increased US exports.

Income growth would lead to an increase in aggregate demand, while exchange rate growth would lead to an increase in aggregate demand. The combined demand curve will be directly impacted by a rise in net exports since it causes planned expenditure to increase. As a result, the market's equilibrium will change, which means that overall demand will rise. When foreign incomes rise, a country's net exports and overall demand rise; when foreign incomes fall, net exports and overall demand decline.

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in review of the general ledger there is a purchase for a macbook pro for $1,999 for a new hire posted to office equipment and supplies. how should this be handled for the business in accordance to gaap?

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The purchase of the MacBook Pro for $1,999 should be capitalized as a fixed asset and depreciated over its useful life in accordance with GAAP.

In accordance with GAAP, purchases of fixed assets, such as office equipment, should be capitalized and depreciated over their useful life. The MacBook Pro, being a high-value item with a useful life of more than one year, should be recorded as a fixed asset on the balance sheet.

The cost of the MacBook Pro, $1,999, should be recorded as the initial cost of the asset, and the depreciation expense should be recognized over the asset's useful life.

The depreciation expense will be recorded on the income statement, and the accumulated depreciation will be recorded on the balance sheet as a contra asset account to the MacBook Pro.

By capitalizing and depreciating the MacBook Pro, the business can accurately reflect the value of its assets and the expenses incurred in operating the business over time.

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lamar is researching a business opportunity and has asked his acquisition team to help him review and verify all of the information about the business. this process of research and verification is called

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The process of research and verification that Lamar is undertaking is called due diligence.

This is a comprehensive review of a potential investment opportunity, such as a business, to ensure that all of the relevant information has been verified and to identify any potential risks or red flags. The goal of due diligence is to provide a thorough understanding of the investment opportunity and to help investors make informed decisions based on accurate and reliable information. Lamar's acquisition team will likely review financial statements, legal documents, operational information, and other relevant information during the due diligence process.

Due diligence is a critical step in any business acquisition or investment process and is typically conducted by experienced professionals with expertise in finance, legal, and business operations.

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the amount of time that a task's duration can be increased without affecting any other task is known as slack. a. free b. total c. independent d. safety

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The amount of time that a task's duration can be increased without affecting any other task is known as the total. The correct answer is b.

Total slack is the amount of time that a task's duration can be increased without affecting the project's completion date. In other words, it is the amount of time that a task can be delayed without delaying the project's overall completion.

Free slack, is the amount of time that a task's duration can be increased without delaying the start of any subsequent tasks. Independent slack and safety slack are not commonly used terms in project management.

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rosemarie just purchased a long-term iou from her town government. the funds are going to help the government build a new bridge in town. this iou can be best described as a

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Rosemarie's long-term IOU can be described as a form of government bond.

A government bond is a debt security issued by a government to raise capital. When individuals like Rosemarie purchase a government bond, they are essentially loaning money to the government in exchange for regular interest payments and the return of their principal investment at a future date.

In this case, the government is using the funds from the sale of the bonds to finance the construction of a new bridge. Long-term IOUs like the one purchased by Rosemarie typically have a maturity date several years in the future, and the government will make regular interest payments to bondholders until the IOU reaches maturity.

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when price ceilings are effective, gains from trade are usually lower than if the available goods are allocated to the highest-value uses. true or false

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The given statement, "When price ceilings are effective, gains from trade are usually lower than if the available goods are allocated to the highest-value uses," is true (T) because price ceilings result in a distortion of the market, leading to a misallocation of resources and a reduction in overall welfare.

Price ceilings create a situation where the price of a good or service is artificially lowered below the market equilibrium price, causing excess demand and shortages. This often results in rationing or allocation of the good based on non-price criteria, such as waiting in line or preference of the seller. As a result, the goods may not be allocated to their highest-value uses, and some consumers who value the good highly may not be able to acquire it.

This inefficiency results in gains from trade being lower than if the goods were allocated to the highest-value uses in a market with a market equilibrium price. Thus, price ceilings can lead to reduced welfare and a misallocation of resources.

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which of the following best explains why expatriates leave their firms within one year of completing an international assignment? group of answer choices desire to spend more time overseas inadequate financial compensation inability to utilize skills learned abroad discord among family and friends

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The best statement that explains why expatriates leave their firms within one year of completing an international assignment inability to utilize skills. (option c).

Among the given options, the most likely reason for expatriates leaving their firms within one year of completing an international assignment is "inability to utilize skills." This refers to the situation where expatriates may not have the opportunity to apply their skills and expertise in their new role, resulting in frustration and dissatisfaction.

While desire to spend more time overseas and learned abroad discord among family and friends may also contribute to expatriates leaving their firms, these are generally not the primary reasons.

Inadequate financial compensation may also play a role in some cases, but it is typically not the primary reason for expatriates leaving their firms within one year of completing their international assignment.

Hence option (c) is the right choice.

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gnomes r us just paid a dividend of $1.80 per share. the company has a dividend payout ratio of 65 percent. if the pe ratio is 15.9 times, what is the stock price?

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The stock price is $44.03 if a dividend of $1.80 per share and the dividend payout ratio of 65 percent, the pe ratio is 15.9 times.

Dividend rate = $1.80 per share

Dividend payout ratio = 65 percent

Pe ratio =  15.9 times

To calculate the stock price, we need to utilize the dividend discount model formula,

P = D / (r - g) ----------equation 1

g =  Return on equity x Retention ratio

g  = 35% * Return on equity

P/E ratio = Stock Price ÷ Earnings per share

Earnings per share = Stock price ÷ P/E ratio

Using the dividend payout ratio and the earnings retention ratio to estimate the earnings growth rate:

g =  Return on equity x Retention ratio

g = 35% x (1 - Dividend payout ratio) * Earnings per share / Stock price

g = 0.35 x (1 - 0.65) * (Stock price / 15.9) / Stock price

g = 0.0082

substituting the g value in equation 1

P = D / (r - g)

Stock price = $1.80 / (r - 0.0082)

15.9 = Stock price / $2.77

r = 0.1327

Stock price = 15.9 * $2.77

Stock price  = $44.03

Therefore, we can conclude that the stock price is $44.03.

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stocks offer an expected rate of return of 18%, with a standard deviation of 22%. gold offers an expected return of 10% with a standard deviation of 30%. in light of the apparent inferiority of gold with respect to average return and volatility, would anyone hold gold in his portfolio? b.assume that the correlation between stocks and gold is -0.5. find the weights ws and wg of the efficient risky portfolio which is invested in stocks and gold and which has an expected return of 15%

Answers

The weights of stocks and gold that minimize the portfolio's standard deviation subject to the given constraints. The solution is: ws = 0.75 and wg = 0.25.

The decision to hold gold in a portfolio depends on the investor's risk preferences and their overall investment goals. While stocks offer a higher expected rate of return, they also have a higher level of volatility. On the other hand, gold may offer a lower expected rate of return but may be less volatile, making it a more stable investment option.

To find the weights of the efficient risky portfolio which is invested in stocks and gold and which has an expected return of 15%, we can use the formula for the expected return of a portfolio:

Expected Return of Portfolio = Weight of Stocks x Expected Return of Stocks + Weight of Gold x Expected Return of Gold

We want to find the weights of stocks (ws) and gold (wg) such that the expected return of the portfolio is 15%. Therefore, we have:

0.15 = ws x 0.18 + wg x 0.10

We also know that the correlation between stocks and gold is -0.5. Using this information, we can calculate the standard deviation of the portfolio as:

Portfolio Standard Deviation = sqrt[(ws^2 x Stock Standard Deviation^2) + (wg^2 x Gold Standard Deviation^2) + 2 x ws x wg x Stock Standard Deviation x Gold Standard Deviation x Correlation]

Substituting the given values, we have:

Portfolio Standard Deviation = sqrt[(ws^2 x 0.22^2) + (wg^2 x 0.30^2) + 2 x ws x wg x 0.22 x 0.30 x (-0.5)]

We want to find the minimum standard deviation of the portfolio subject to an expected return of 15%. Therefore, we can use the formula for the portfolio's Sharpe ratio:

Sharpe Ratio = (Expected Portfolio Return - Risk-Free Rate) / Portfolio Standard Deviation

Since we do not have information on the risk-free rate, we can assume it to be 0. Solving for the weights of stocks and gold that maximize the Sharpe ratio, we get:

Sharpe Ratio = (0.15 - 0) / Portfolio Standard Deviation

Maximizing the Sharpe ratio is equivalent to minimizing the portfolio's standard deviation subject to an expected return of 15%.

Therefore, the efficient risky portfolio should be invested 75% in stocks and 25% in gold to achieve an expected return of 15%.

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on january 1 of the current year, jones company borrowed $20,000 on a five-year, 7% note payable. on december 31 of the current year, jones company should record:

Answers

Interest Expense = $20,000 * 7% * (12/12) = $1,400 Note Payable = $20,000 - $1,400 = $18,600 The journal entry to record this would be: Debit: Interest Expense = $1,400 Credit: Note Payable = $18,600

At the end of the current year, Jones Company should record the following journal entry to account for the interest expense and the reduction in the note payable: Interest Expense = $20,000 * 7% * (12/12) = $1,400 Note Payable = $20,000 - $1,400 = $18,600 The journal entry to record this would be: Debit: Interest Expense = $1,400 Credit: Note Payable = $18,600

This entry reflects the interest expense accrued on the note payable for the year and the reduction in the outstanding balance of the note payable.

This journal entry will ensure that the company's financial statements reflect the correct amount of interest expense for the year and the remaining balance of the note payable.

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the upward-sloping portion of the long-run average cost curve is a result of multiple choice economies of scale. constant returns to scale. diseconomies of scale. increasing marginal productivity.

Answers

The upward-sloping portion of the long-run average cost curve is a result of "diseconomies of scale". Therefore the correct answer is c).

The upward-sloping portion of the long-run average cost curve (LRAC) is known as the "diseconomies of scale" region. In this region, as the scale of production increases, the average cost per unit of output also increases.

This occurs because the firm may experience difficulties in managing its operations as it grows, such as communication problems, coordination issues, and higher costs of monitoring and control. As a result, the LRAC curve slopes upward as the firm moves beyond the optimal scale of production, where it achieves the lowest average cost per unit of output.

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