The selling price per calculator after upgrading would need to be $40
The cost of upgrading 500 calculators is $150,000, so the cost per calculator would be $150,000/500 = $300.
If the calculators are sold in their current condition, Tolar would receive $50,000 for all 500 calculators, which translates to $100 per calculator.
If the calculators are upgraded and sold, Tolar would receive a total of $220,000. However, they would need to subtract the cost of upgrading, which is $150,000. This leaves them with a profit of $70,000.
To find the selling price per calculator that would make Tolar as well off as if they just sold the calculators in their present condition, we can set up the following equation:
500x - 150,000 = 50,000
where x is the selling price per calculator after upgrading.
Solving for x, we get:
x = ($50,000 + $150,000)/500
x = $200/5
x = $40
Therefore, the selling price per calculator after upgrading would need to be $40 in order for Tolar to be as well off as if they just sold the calculators in their present condition. None of the given multiple choice options are correct.
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7. Dissolving a partnership is easier than dissolving a sole proprietorship.
This statement is incorrect. Dissolving a sole proprietorship is generally easier than dissolving a partnership.
As a sole proprietorship is owned and operated by a single individual, there is no need for a formal agreement or legal documents to dissolve the business. The proprietor can simply stop operating the business, file the necessary paperwork to cancel any business licenses or permits, and close out any business accounts.
In contrast, partnerships involve multiple owners, and the dissolution process can be more complex. Partnerships are typically governed by a partnership agreement, which outlines the terms and conditions for dissolving the business. If there is no agreement in place, state laws may dictate the process for dissolving the partnership.
The dissolution of a partnership typically involves several steps, including notifying creditors and other stakeholders, distributing assets, settling debts and liabilities, and filing appropriate tax forms. These steps can be time-consuming and complex, and may require the assistance of legal and financial professionals.
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Scenario A
College graduates are moving back in with family in record numbers. They are waiting longer than previous generations to buy homes and start families. Data show downward trends in new home building, mortgage applications, and the birthrate. Multiple markets are complaining of falling demand. A national supplier of home goods permanently shut down. The media is calling babies born today part of the “baby bust generation.” Economists predict future school closings and labor shortages.
Would the Fed address the scenario with expansionary or contractionary policy? Explain.
What is a specific monetary action the Fed might use in this scenario? Identify the tool and how the Fed would use it. Explain how this would address the scenario.
What is a specific fiscal action that Congress might use in this scenario?
The Fed would address the scenario with an expansionary policy as this is the policy that stimulates demand.
The specific monetary action that the Fed can take in this scenario is decreasing the Fed Funds rate, to reduce interest rates on loans.
Congress can use the specific fiscal action by offering tax breaks to young people who buy houses.
How can demand be stimulated ?The Fed Funds rate is the rate that banks borrow from each other. If the Fed was able to decrease this rate, then it would lead to loan interest rates falling which would allow the young college graduates to be better able to buy homes and start families.
Congress for its part, can embark on the fiscal action of giving tax breaks to young college graduates who buy houses and start families. This would encourage them to buy houses knowing they will pay less taxes.
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when hurricanes threaten florida, and with the "price gouging" law in place, what are the market price of plywood, the quantity demanded of plywood, and the quantity supplied of plywood?
When hurricanes threaten Florida, and with the "price gouging" law in place, the market price of plywood remains at its normal, pre-hurricane level, the quantity demand increases and quantity supplied decreases.
The market price of plywood does not change because the "price gouging" law prohibits sellers from raising prices on essential goods and services, such as plywood, during a state of emergency.
However, the quantity demanded of plywood increases significantly during this time as people rush to purchase supplies to protect their homes and businesses. This creates a shortage in the market, as the quantity supplied of plywood is unable to keep up with the increased demand.
In summary, during a hurricane threat in Florida with the "price gouging" law in place, the market price of plywood remains the same, the quantity demanded of plywood increases, and the quantity supplied of plywood is unable to keep up with the demand, creating a shortage.
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costs that a firm remaining in business will still incur even if it halts current production are called
1. [25 MARKS] Two individuals are the only participants in an auction. The rules of the auction are the following. The winner is the one who makes a higher bid than the other (if each individual makes the same offer the winner is chosen at random). The one who wins the good pays a price which is equal to the other individual's offer plus 10 dollars. Suppose that for individual 1 the asset is worth $100 and he only knows that for the other individual the value is positive and less than $200, but does not know the exact value. Argue which offer is worth making for individual 1. Explain your reasoning in detail.
To determine the optimal bidding strategy for individual 1 in the auction, we need to analyze the potential outcomes and expected payoffs based on different bidding strategies. Let's consider two possible scenarios:
Individual 1 bids $0:
If individual 2 bids any amount greater than $0, individual 2 will win the auction and pay $10 (individual 1's bid + $10).
If individual 2 also bids $0, the winner is chosen randomly. In this case, individual 1 has a 50% chance to win and pay $10.
Individual 1 bids $100:
If individual 2 bids less than $90, individual 1 will win and pay $10 (individual 2's bid + $10).
If individual 2 bids $90 or more, individual 2 will win the auction and pay $10 (individual 1's bid + $10).
Based on these scenarios, let's analyze the expected payoffs for individual 1:
The expected payoff when bidding is $0:
Individual 1 wins with a 50% chance and pays $10, resulting in an expected cost of $5 (0.5 * $10).
Individual 1 loses 50% and pays $10, resulting in an expected cost of $10 (0.5 * $10).
Therefore, the expected cost for individual 1 when bidding $0 is $7.50 (0.5 $5 + 0.5 $10).
The expected payoff when bidding is $100:
If individual 2 bids less than $90, individual 1 wins and pays $10, resulting in an expected cost of $10 (assuming individual 2 bids randomly between $0 and $90).
If individual 2 bids $90 or more, individual 1 loses and pays $10.
Therefore, individual 1's expected cost when bidding $100 is $10.
Comparing the expected costs, we can see that bidding $100 has a lower expected cost ($10) than paying $0 ($7.50). Therefore, the optimal bidding strategy for individual 1 in this scenario is $100.
By bidding $100, individual 1 ensures a higher chance of winning the auction and obtaining the good at a lower expected cost than bidding $0. It is critical to note that individual 1's bid reflects their perception of the asset's value and willingness to pay. This bid aims to secure the asset at the lowest cost possible while accounting for the uncertain value of the other individual's bid.
Individual 1 should make an offer equal to the asset's worth, $100, in order to maximize their expected utility. This offer strikes a balance between the potential gain from winning the auction and the potential cost of overpaying for the asset.
In this auction scenario, individual 1 has limited information about the value of the asset for the other participant. They only know that the value is positive and less than $200. Given this uncertainty, individual 1 needs to determine the optimal bid that maximizes their expected utility.
If individual 1 bids below $100, they increase the likelihood of losing the auction, resulting in zero utility. Bidding above $100 poses the risk of overpaying for the asset if the other participant's value is significantly lower than the bid. By offering $100, which is equal to the asset's worth, individual 1 minimizes the risk of overpaying while still having a chance to win the auction and obtain the asset. If the other participant's value is below $100, individual 1 wins the auction and pays a price equal to the other participant's offer plus $10, which is a reasonable cost.
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To be an effective planner, you should be a(n) learner in areas beyond the technicalities of your profession.
It is a true statement about being an effective planner who is a learning professional in many areas beyond the technical aspects of his profession.
How to carry out an effective plan?In the business environment, it is necessary to have a comprehensive understanding of internal and external factors that can impact the future of the organization and generate value and market positioning.
Therefore, it is essential that an effective planner is based on technical, social and visionary aspects to ensure that his action plan is positive and successful.
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Answer:proactive
Explanation:
Use the following template to brainstorm ways a company might market the same
commodity to different segments of their market. The first row has been done for you as
an example.
TABLE 1 Market segments exercise
A commodity is a basic good that is used in trade and can be exchanged for other items of the same kind. The majority of the time, commodities are used as raw materials to create other products or services.
Why do people buy commodities?Portfolio volatility might be reduced by commodities. The historical correlation of commodities to traditional assets is low because factors like weather, politics or global production can influence commodity returns. Consequently, the returns from commodities could aid in lowering portfolio volatility.
A commodity market entails the purchase, sale, or trading of raw goods like coffee, gold, or oil. Soft commodities, such as livestock or agricultural products, contrast with hard commodities, which are typically natural resources.
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1. Buyers, sellers, and producers all have someone else they are competing with for economic benefits. This is known as:
O competition
O monopoly
O collusid
O cartels
Answer:monopoly
Explanation:
Which banking document is a summary of what has been put into and taken out of your account?.
A bank statement (also referred to as an account statement) would be a statement (also referred to as a statement) that will be normally delivered by the institution to the account owner every month, summarizing all of the activities of an account throughout the month.
A withdrawal slip would be a form that a consumer must fill out in order to receive money from their bank account. In both circumstances, money could be accepted at the counter as well as withdrawn mostly by consumer.
A deposit slip may be a little paper form that is included by a commercial bank when transferring funds into something like a bank account. A deposit slip must include the date, the depositor's identity, the depositor's account number, as well as the sums being transferred.
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I need q 4 and 5 please:)
20kg of beans at #150/kg are mixed with 15kg of beans at #180/kg , if the mixture is sold at #200/kg , calculate the percentage profit and correct to 3s f
Answer: 18.6%
Explanation:
Cost of 20 kg of beans at #150 per kg is:
= 20 * 150
= #3,000
Cost of 15 kg of beans at #180 per kg is:
= 15 * 180
= #2,700
Total cost is:
= 3,000 + 2,700
= #5,700
Mixing both beans results in a weight of:
= 20 + 15
= 35 kg
This 35kg is sold at #200 per kg so the revenue is:
= 35 * 200
= #7,000
Percentage profit is:
= (Revenue - Cost) / Revenue * 100%
= (7,000 - 5,700) / 7,000 * 100%
= 18.6%
List 7 types of media's with notes about them. Or less.
Answer:
good
Explanation:
Print Media (Newspapers, Magazines)
Broadcast Media (TV, Radio)
Outdoor or Out of Home (OOH) Media.
Internet.
A-3. Assume james and paul formed gte as an s corporation. Compute the tax basis of paul's stock in gte at the end of 2022. What amount of paul's income from gte is subject to fica or self-employment taxes? what amount of income, including its character, will paul recognize on the $34,000 distribution he receives on december 1? what amount of tax does gte pay on the $3,800 qualified dividend it received?
To accurately calculate the tax basis of Paul's stock in GTE at the end of 2022, determine the amount of Paul's income subject to FICA or self-employment taxes, and calculate the income and tax on the qualified dividend, I would require additional information such as Paul's initial investment, any additional contributions, GTE's earnings, and other relevant details.
Stock refers to shares or ownership in a company. When individuals or entities purchase stock, they become shareholders and have a proportional ownership stake in the company. Stocks are typically bought and sold on stock exchanges.
Stock ownership provides certain rights to shareholders, such as voting rights in corporate decisions and the potential to receive dividends. Shareholders may also benefit from the appreciation of the stock's value over time, allowing them to sell their shares at a higher price than their initial investment.
Investing in stocks can be done for long-term growth or short-term trading purposes. It involves analyzing the company's financial performance, industry trends, and market conditions to make informed investment decisions.
Stocks are categorized into different types, including common stock and preferred stock, each with its own set of characteristics and benefits for shareholders. Overall, stocks play a vital role in the financial markets, allowing individuals and businesses to participate in the ownership and growth of publicly traded companies.
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BLACK FRIDAY is related to business and finance in numerous ways and has become a very popular shopping event. Now that you have learned a little bit about the history and business strategies used for offering BLACK FRIDAY DEALS let’s put your purchasing power to the test.
-Find a gift for the person described in the scenario below using BLACK FRIDAY deals online. -Pick a gift that also stays within the BUDGET you have been given for each purchase.
-You can only use the SOURCE (i.e. store online) ONCE. For example, you can use AMAZON only one time.
-NO GIFT CARDS CAN BE USED AS A GIFT SOLUTION.
-You will need to include the following information for each person: Name of Gift Idea, Brief Description of the Gift, Website utilized, and Price of the Gift.
Donald is 38 years old and attends Culinary Arts School at Kirkwood Community College in Cedar Rapids. He would like to become a chef in Chicago someday.
BUDGET: $120.00?
Mia is five years old. Favorite play themes for Mia include Transformers and Mario.
Her favorite color is red.
BUDGET: $45.00?
Sasha has her own dog-sitting business. As an 8th grader at NW Junior High, she has many customers and little free time to really enjoy the weekend. She has a German Shepard named CALICO.
BUDGET: $100.00?
You work at Hy-Vee as a checker and your manager has been very generous with allowing you to take time off for your school activities. You decide to thank them with a small token of your appreciation.
BUDGET: $20.00?
CONGRATULATIONS! You have won a drawing for a $200 shopping spree at your favorite store. What are you buying? (Spend the whole amount, if you can).
BUDGET: $200.00?
Black Friday is the largest shopping day in the USA. Together with Cyber Monday three days later, it marks the start of Christmas shopping and many Americans start decorating for Christmas and shopping.
Many people visit parents or other relatives during Thanksgiving, which often means a trip, and they therefore do not work on Fridays, but can, for example, engage in shopping. A number of American online stores offer cheaper goods these days and then also target customers outside the United States. Many stores open early, some as early as midnight, others at 5 or 7 in the morning, and close late, for example at 11 p.m.
Although Black Friday is not an official day off in the United States, all schools and many workplaces are closed, to enable a four-day holiday with Black Friday as a so-called squeeze day.
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write a journal post with three things you might be able to do to go to college (or any other option you are considering after high school) without student loan debt?
Answer:
You can apply for scholarships, work in high school, and receive grants.
Explanation:
You can possibly graduate college without debt or little money owed back to a bank.
The first option is a scholarship, this money is usually only offered from a range of $500-fully paid tuition. You may have to apply to hundreds before you are granted some but they are offered from freshmen in high school all the way to almost graduating college.
Your second option is working, sophomore year is when you'd be able to get a job the earliest. Every paycheck you save about 20%, work all the way through college and you can save enough to pay for your first year, possibly second year of college. You could also work while you're a full-time student, it'd be hard work but it can be done.
Your third option, but not last is to apply for grants. This is basically free money, they differ from scholarships though. You do not have to pay grants back, and you can get sponsored by companies to pay your way through college.
Compared to a short-term investment, what is the general return of a long-term investment? A) A long-term investment has a similar return to a short-term investment.
B) A long-term investment has a greater return because it has greater risk.
C) A long-term investment has a greater return because it has lower risk.
D) A long-term investment has a lower return because it has lower risk.
Let understand that "short-term investment" are investments that can be easily converted to cash and has a maturity period of less than a year. Example of this investment are Money Market.
"Long term investment" are investment that runs over a long period of time and yield higher return than the short-term investment". Example of these investment are stocks, bonds, real estate
People invest in "Long term investment" because its offers more risk for higher rewards.
In conclusion, long-term investment has a greater return because it has greater risk.
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Answer:
Compared to short-term investment, what is the general return of long-term investment?
Long-term investment has a similar return to short-term investment.Long-term investment has a greater return because it has greater risk.Long-term investment has a greater return because it has lower risk. <<<CORRECTLong-term investment has a lower return because it has lower risk.Explanation:
Edge 2022
Which of the following would be consequences of more rental properties in the United States being subject to binding price ceilings: Select the two correct answers below.
Select all that apply:
a shortage of apartments
a surplus of apartments
the quantity supplied of apartments will exceed the quantity demanded
the quantity demanded of apartments will exceed the quantity supplied
A shortage of apartments, the quantity demanded of apartments will exceed the quantity supplied
What is quantity demand?Quantity demand is the amount of a particular good or service that is desired by consumers at a specific price and time. It is determined by examining the consumer's willingness and ability to purchase the item at a given price. It is a key factor in economics and is used to determine the supply and demand of goods and services in the market. Quantity demand is affected by a variety of factors such as consumer income, consumer tastes and preferences, the availability of substitutes, and the price of the good or service. Changes in any of these factors can cause a change in the quantity demanded by consumers.
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Current national accounting requirements often differ, with the result that like transactions and events are reported differently in different countries. Such differences can have a significant impact on both the balance sheet and the income statement. These differences make it difficult to distinguish changes in the performance from the effects arising from the use of different accounting requirements. Many stakeholders, such as accounting professionals and business organizations advocated for a single set accounting standards. Critically examine the efforts of the International Accounting Standards Board (IASB) to harmonize the accounting standards. (C2)
The International Accounting Standards Board (IASB) was established in 2001 to develop and promote the use of a single set of international financial reporting standards (IFRS) across all countries. The goal was to harmonize accounting standards to make it easier for stakeholders to compare financial information across different countries.
Since then, the IASB has made efforts to develop a comprehensive set of high-quality, globally accepted accounting standards. The IASB has developed a conceptual framework for financial reporting, which provides a basis for the development of accounting standards. The framework sets out the objectives of financial reporting, the qualitative characteristics of financial information, and the definition and recognition criteria for assets, liabilities, income, and expenses.
The IASB has also developed a number of accounting standards. These standards cover a wide range of topics, including financial instruments, revenue recognition, leases, and insurance contracts. Companies that use IFRS must follow these standards in preparing their financial statements.
The IASB has made significant progress in harmonizing accounting standards. As of 2021, more than 140 countries require or permit the use of IFRS. This includes the European Union, the United States, Japan, Canada, and many other countries. The use of a single set of accounting standards has made it easier for stakeholders to compare financial information across different countries.
However, there are still some challenges to achieving full harmonization. Some countries have not adopted IFRS, and some have made modifications to IFRS that are not consistent with the IASB's standards. This can make it difficult for stakeholders to compare financial information across different countries. The IASB continues to work with national standard-setters to address these challenges.
Overall, the efforts of the IASB to harmonize accounting standards have been successful. The use of a single set of accounting standards has made it easier for stakeholders to compare financial information across different countries. However, further efforts are needed to address the remaining challenges to achieving full harmonization.
The International Accounting Standards Board has made significant progress in harmonizing accounting standards by developing a comprehensive set of high-quality, globally accepted accounting standards. The use of a single set of accounting standards has made it easier for stakeholders to compare financial information across different countries. However, challenges still remain, and further efforts are needed to achieve full harmonization.
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Who is Patrick Jorgenson? What does he do for a living?
Answer:
I think you mean Patrick Jørgensen
Explanation:
He is a musical artist and if you don't mean Patrick Jørgensen I'm sorry
You intend to purchase a 10 year ,10000 face value bond that pays interest of 800 every six months.If your norminal annual required rate of return is 10 percent with semi-annually compounding ,how much should you be willing to pay for this bond ? What's the current yield
Answer:
Market price = $13,738.49
Explanation:
The yield to maturity of the bond is 8% x 2 = 16%
You require a 10% return, so the present value of the bond should be:
PV of face value = $10,000 / (1 + 5%)²⁰ = $3,768.89
PV of coupon payments = $800 x 12.462 (PVIFA, 5%, 20 periods) = $9,969.60
Market price = $13,738.49
Use the fundamental theorem of algebra and the complex conjugate theorem to determine the number and nature of the remaining root(s). Explain your thinking.
To determine the number and nature of the remaining roots of a polynomial equation, consider the fundamental theorem of algebra and the complex conjugate theorem.
Apply the fundamental theorem of algebra, which states that a polynomial equation of degree n has exactly n complex roots, taking into account their multiplicities. By analyzing the coefficients of the polynomial equation, we can determine the number of roots it has.
Additionally, if the coefficients of the polynomial equation are real numbers, the complex conjugate theorem comes into play. This theorem states that if a complex number is a root of a polynomial equation with real coefficients, then its complex conjugate (obtained by changing the sign of its imaginary part) is also a root. This allows us to identify pairs of complex conjugate roots.
Therefore, Utilize these theorems to determine the number and nature of the remaining roots, whether they are real, complex, or complex conjugate pairs.
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an observant salesperson receives a great deal of continual feedback by: group of answer choices attempting to engage buyers presenting a product's benefits and values assessing the buyer's nonverbal cues using verbal supports such as comparisons and analogies in a sales dialogue planning and practicing a sales presentation
By observing the buyer's nonverbal clues, the perceptive salesman gains a lot of continuous feedback.
Which of the following doesn't belong in the buyer choice process' five stages?Consuming luxuries or extravagant goods to improve one's status and lifestyle is conspicuous consumption, not one of the five stages in the buyer selection process.
Which of the following is not a content marketing multiple choice question?Response: Content marketing includes the use of pictures, blog entries, and videos. OneNote is a piece of Microsoft software that enables note-taking and the storage of important information; it is not a kind of content marketing.
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Suppose the demand equation is given by P= 100 - 20, and the supply equation is given by P = 20 + 20. If the quantity bought and sold under a price ceiling is Q = 10, what is the price ceiling? a. $80
b. $60 c. $20 d. $40
The price ceiling is $60.
To find the price ceiling, follow these steps:
1. Identify the demand and supply equations: Demand is P = 100 - 20Q and Supply is P = 20 + 20Q.
2. Set quantity bought and sold (Q) to 10, as given in the problem.
3. Plug Q = 10 into both the demand and supply equations to find the corresponding prices.
4. For the demand equation, P = 100 - 20(10) = 100 - 200 = -$100.
5. For the supply equation, P = 20 + 20(10) = 20 + 200 = $220.
6. Since the price ceiling must be below the market equilibrium price, it should be lower than the supply price and higher than the demand price.
7. Out of the given options, $60 is the only price that fits this criterion.
In conclusion, the price ceiling in this scenario is $60. This price is lower than the market equilibrium price and allows for the given quantity bought and sold (Q = 10).
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You are selling friendship bracelets online and you give very clear instructions to the ISP about how to post the listing and photos. The ISP
erroneously posts P. Navajo's pictures, at half price, and states that you give a certificate of authenticity. None of this was included in your
instructions. The posting goes viral and tweens and teens from all over the world order over 50 million bracelets in one day. You are liable.
Answer. false,
someone else answered it, same question on another brainly
One of the largest suppliers of customer relationship management software solutions is ? Multiple Choicea.Salesforce. b.Microsoft. c.HubSpot. d.Oracle.
Salesforce. With over 56,600 employees worldwide, Salesforce is one of the world's leading cloud-based CRM systems. It was founded in California, USA, by Marc Benioff and Parker Harris.
What does customer relationship management look like in practice?Sending a thank-you note to customers who make purchases. If a customer purchases a particular product, you can upsell or cross-sell it to them. distributing a coupon code as a birthday greeting. giving a customer who hasn't bought in a while a discount.
Which business created CRM?Numerous businesses and independent developers attempted to maximize lead potential by following this trend, including Tom Siebel of Siebel Systems, who developed the first CRM product in 1993, Siebel Customer Relationship Management.
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ABM Services paid a $4.15 annual dividend on a day it closed at a price of $54 per share. What
was the yield?
Answer:
Explanation:
94:15
in the current period, forward co.started with the production of 21,000 units and completed 8,400 units, leaving 13,200 units in process that are 42% complete. how many equivalent units of production did forward co.have for the period?
The equivalent units of production cost per equivalent unit for the period is $2.51.
What is meant by equivalent units?Unit Production Rate = (Original Value – Salvage Value) / Estimated Unit Production.
21.000 = ( 8,400 - 13,200 ) / 42%
The amount of labour put into a certain number of tangible goods is measured in equivalent units. The quantity of physical goods can be multiplied by the amount of work done on them to easily calculate equivalent units. Cost per equivalent unit is calculated by dividing the total cost for the current period by the cost for the initial task in progress. The number of hypothetical units that a business could have produced using a specific amount of raw materials, labour, and production costs is known as the "equivalent units" figure. Multiplying the quantity of physical (or actual) units on hand by the units' percentage of completion yields the equivalent units.It is the number of finished units of a product that a business could have potentially produced, given the quantity of direct materials, direct labour, and manufacturing overhead costs incurred during that time for the products that weren't yet finished.To learn more about equivalent units refer to:
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You were recently hired by Citigroup in the currency management department. Your role is to monitor the market and identify any arbitrage opportunities. When you checked the prices in the market, you noticed that the spot price of the Euro (EUR) is $0.78, and the spot price of the Norwegian Krone (NOK) is $0.2. If the risk-free interest rate on a 1-year Treasury bill in the United States, the home country, is 2.2%, in Europe is 1.55%, and in Norway is 1.3% (all rates are continuously compounded). If you found that the 1-year forward price of the EUR is $1.6077 and of the NOK is $0.1983, then (A) Is there an arbitrage opportunity in any of the two currencies? Explain why? [Round your answer to the nearest ten thousandths (e.g. 1.1234)] (B) Your boss instructs you that the maximum you can borrow is $2,000,000 (or its equivalent in EUR or NOK) to exploit any arbitrage opportunity. How much will be your arbitrage profit, if there is an arbitrage opportunity? How could you lock in this opportunity?
A) There is an arbitrage opportunity in this case since the interest rate parity condition is not being satisfied.
The interest rate parity condition implies that the forward exchange rate should be equal to the spot exchange rate adjusted for the interest rate differential between the two countries.
However, in this case, the 1-year forward price of the EUR is $1.6077, which implies an expected appreciation of the EUR against the USD of (1.6077 - 0.78)/0.78 = 105.5%.
On the other hand, the interest rate differential between Europe and the United States is (1.55% - 2.2%) = -0.65%, which suggests an expected depreciation of the EUR against the USD.
Therefore, an investor could borrow USD, exchange them for EUR, invest the EUR in Europe, and lock in a riskless profit by investing in the USD risk-free rate. A similar argument can be made for the NOK.
B) Assuming that the maximum amount that can be borrowed is in USD, the arbitrage profit can be calculated as follows:
Borrow $2,000,000 and exchange them for EUR at the spot rate of $0.78/EUR, which gives €2,564,103. Then, sell the EUR forward at the 1-year forward rate of $1.6077/EUR, which gives $4,124,308.
Invest $4,124,308 in the US risk-free rate for 1 year at 2.2% continuously compounded, which gives $4,234,132.
At the end of the year, receive the EUR from the forward contract, which will be worth $4,124,308/$1.6077 = €2,564,103. Convert the EUR to USD at the spot rate of $0.78/EUR, which gives $3,300,000.
Repay the loan of $2,000,000 and keep the remaining profit of $1,300,000.
Therefore, the arbitrage profit is $1,300,000.
To lock in this opportunity, the investor could simultaneously buy EUR spot and sell EUR forward. Alternatively, the investor could borrow NOK, exchange them for USD, and invest in the US risk-free rate, then sell USD forward and buy NOK forward to lock in the arbitrage opportunity in the NOK.
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What is an investment portfolio?
A. A selection of varied accounts
B. A selection of varied instruments
C. A selection of varied applications
D. A selection of varied stocks and bonds
Answer:
In finance, a portfolio is a collection of investments aka stocks and bonds!
OCTAVE, NIST SP 800-30, and AS/NZS 4360 are different approaches tocarrying out risk management within companies and organizations. What are thedifferences between these methods?A. NIST SP 800-30 and OCTAVE are corporate based, while AS/NZS isinternational.B. NIST SP 800-30 is IT based, while OCTAVE and AS/NZS 4360 arecorporate based.C. AS/NZS is IT based, and OCTAVE and NIST SP 800-30 are assurance based.D. NIST SP 800-30 and AS/NZS are corporate based, while OCTAVE isinternational.
Option B) NIST SP 800-30 is specifically designed for IT systems, while OCTAVE and AS/NZS 4360 take a broader approach to risk management. Risk management is an essential process for companies and organizations to identify, assess, and mitigate potential risks that could impact their operations, reputation, or bottom line.
There are various approaches to carrying out risk management, and three popular methods are OCTAVE, NIST SP 800-30, and AS/NZS 4360.
OCTAVE, which stands for Operationally Critical Threat, Asset, and Vulnerability Evaluation, is a risk management framework that focuses on identifying and evaluating the most critical assets of an organization and developing a risk mitigation strategy based on the potential impact of a risk on these assets.NIST SP 800-30, which is an IT-based risk management framework, was developed by the National Institute of Standards and Technology. It involves a comprehensive approach to assessing and managing risks that are specific to information technology systems and the data they process.AS/NZS 4360, which is a corporate-based risk management framework, was developed by the Australian and New Zealand Standards bodies. It involves a comprehensive approach to identifying and evaluating potential risks and developing a risk mitigation strategy that is tailored to the unique needs and goals of the organization.Know more about risk management here:
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