Answer: b. The premium reflecting the risk that unanticipated events will occur over the term of the security.
Explanation:
The Maturity Risk Premium refers to an additional rate of return that is put on a long term instrument such as a bond to cater for unanticipated events during the time that the bond is to be held.
For example, there is a risk that inflation rates could rise sharply.
This is why the Maturity Risk Premium is important. To ensure that returns are stable even if such events occur.
Answer:
The correct answer is letter "B": Sell-off.
Explanation:
A sell-off is the rapid sale of an asset typically follow by its drastic decline in its value. For example, if ABC corporation releases a bad earning report many of its shareholders may decide to sell their shares. With many sellers and few buyers, ABC stock value will sharply fall.
Kraft Foods Inc., in November 2004, published the sell of its sugar confectionery enterprises because they had discontinued operations. They planned to restructure the organization realigning and lowering the structure cost and optimizing capacity utilization.
Answer:
Option C 16.36% is correct.
Explanation:
We can find the growth using the following growth formula:
g = (Earning per share today / Earning per share n years ago)^(1/5) - 1
EPS of this year is $3.2 per share and 5 ago was $1.5 per share.
So by putting values we have:
g = (3.2 / 1.5) ^(1/5) - 1 = 16.36%
The right option is C.
Answer: See explanation
Explanation:
a. Direct material = 4 × 33300 = Make $133200 ; Net income increase
Direct labor = 5 × 33300 = Make $166500 ; Net income increase
Variable costing= 0.61 × $166500 = Make $101565 ; Net income increase
Fixed manufacturing = Make 43100 ; Buy 43100 ;
Purchase price = 13.16 × 33300 = Buy $438228 ; Net income decrease
Total annual cost:
Make: $444365
Buy: $481328
Net income decrease = $36963
b. No, Pottery Ranch should not buy the finials. There's an incremental cost of $36963.
c. Incremental revenue = $50,367
Incremental cost = $36963
Incremental revenue = $50367 - $36963 = $13404
In this case, it should be bought.
Answer:
$404,000
Explanation:
Production Unit = $135,000 + $18,000 - $14,000 = $139,000
Labor hours per unit = 30 mins = 0.5 hours
Total Labor Hours = $139,000 x 0.5 = 69,500 hours
Variable Overhead 69,500 x 5 = $347,500
Total Overhead Cost = $347, 500 + $56,500 = $404,000
