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market portfolio is equally likely to increase by 30% or decrease by 10%

31. Suppose the market portfolio is equally likely to increase by 30% or decrease by 10%. A. Calculate the beta of a firm the goes up on average by 43% when the market goes up and goes down by 17% when the market foes down. B. Calculate the bets of a firm that goes up on average by 18% when the market goes down and goes dow

Importance of Trend; Common Size Amounts for Financials

Why is trend just as important if not more important than information that pertains to only one year? What is meant by "presentation of financial statement information in common-size amounts rather than dollar amounts?" Why is this type of presentation sometimes more meaningful than use of actual dollar amounts?

What is the expected return of the WT stock without leverage?

Wolfrum tech.(WT) has no debt. Its assets wiil be worth $450 million in one year if the economy is strong, but only $200 million in one year if the economy is weak. Both events are equally likely. The market value today of assets is $250 million. a) What is the expected return of WT stock without leverage? b) Suppose the r

situation that can benefit from contribution margin analysis

Please help with the following problem. Provide at least 300 words in the solution. Identify one situation at McGro & Associates that could benefit from contribution margin analysis. Discuss any difficulties you may have in obtaining the data to make the analysis.

Paul's Beauty Salon: Contribution margin in dollars, units and as a ratio

In the month of June, Paula's Beauty Salon gave 4,000 haircuts, shampoos, and permanents at an average price of $37. During the month, fixed costs were $21,312 and variable costs were 76% of sales. Determine the contribution margin in dollars, per unit, and as a ratio. (Round contribution margin per unit to 2 decimal places

Retained Earnings Statement

See attached On January 1, 2008, Castle Corporation had retained earnings of $550,000. During the year, Castle had the following selected transactions. 1. Declared cash dividends $120,000. 2. Corrected overstatement of 2007 net income because of depreciation error $30,000. 3. Earned net income $350,000. 4. Declared stoc

Discuss Wayne Hurt and The Kroger Company

Discuss Wayne Hurt and The Kroger Company Executive Summary: Introduce the current status of your company (a brief overview of your company's status. Include the good and the bad. Recommendations & Justifications: You will use the Recommendations below (or make up some of your own) and justify whether the firm should go a

Gross margin and contribution margin income statements

Gross Margin and Contribution Margin Income Statements Tosca Beverages reports the following information for July: Units produced and sold 18,800 Per unit revenue and costs: Sales revenue. $3.20 Direct material costs 0.20 Direct labor costs 0.16 Variable manufacturing overhead 0.06

Acme:Recommend which alternative should be used to finance overseas investment

Having previously identified the location of its Greenfield investment, Acme, a multi-billion public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your jo

Compute Finance Charges, amount of payment and APR

a) Borrow $10,200 from the First National Bank at a fixed rate of 12% per annum, simple interest. The loan would be repaid in equal monthly installments over a 3-yar (36 months) period. b) Obtain a $10,200 installment loan requiring 36 monthly payments from the Store Manager's Credit Union at a 6.5% stated rate of interest.

Returns and the Bell Curve and Using Returns Distributions

Returns and the Bell Curve An investment has an expected return of 8 percent per year with a standard deviation of 4 percent. Assuming that the returns on this investment are at least roughly normally distributed, how frequently do you expect to lose money? Using Returns Distributions Based on the historical record, if

Return Calculations and Returns Distributions

1..Return Calculations A particular stock had a return last year of 4 percent. However, you look at the stock price and notice that it actually didnâ??t change at all last year. How is this possible? 2.Returns Distributions What is the probability that the return on small stocks will be less than 100 percent in a sin

Interpreting beta

A firm wishes to assess the impact of changes in the market return on an assess that has a beta of 1.20 a. If the market return increased by 15%, what impact would this change be expected to have on the asset's return? b. If the market return decreased by 8%, what impact would this change be expected to have on the asset's ret

Rate of return, standard diviation, coefficient of variation

Mike is searching for a stock to include in his current stock portfolio. He is interested in Apple Inc.; he has been impressed with the company's computer products and believes Apple is an innovative market player. However, Mike realizes that any time you consider a so-called high-tech stock, risk is major concern. The rule he f

Portfolio Rebalancing

Using the data below, suppose you are holding a market portfolio, and have invested $12000 in stock C. a) How much have you invested in stock A? b) How many shares of B do you hold? c) If the price of Stock C suddenly drops to $4 per share, what trades would you need to make to maintain a market portfolio? Stock Price/Shar

Gross Margin & Contribution Margin Income Statement

2-41 Gross Margin and Contribution Margin Income Statements Tosca Beverages Reports the following information for July: Units produced and sold 18,800.00 Per unit revenue and costs: Sales revenue $3.20 Direct material costs 0.20 Direct labor costs 0.16 Variable manufacturing overhead 0.06 Fixe

Break Even Point Computed

Rock is sold to contractors who use the product in construction projects. Needs to increase sales by advertising. Spend $100,000 advertising campaign. currently sells 25,000 tons for a total revenue of $5,000,000. Direct Labor...............$1,500,000 Variable production overhead...........200,000 fixed production overhead..

Fianance - Straight Line

E10-8 Jerry Grant, the new controller of Blackburn Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2008. His findings are as follows. Accumulated Useful Life Type Date Depreciation in Years Salvage Value of Asset Acquired Cost 1/1/08 Old Pr

Rem Inc. produces electronic components for sale to manufacturers of radios, television sets, and digital sound systems. In connection with her examination of Rem's financial statements for the year ended December 31, 2007, Maggie Zeen, CPA, completed field work 2 weeks ago. Ms. Zeen now is evaluating the significance of the following items prior to preparing her auditor's report. Except as noted, none of these items have been disclosed in the financial statements or notes. Item 1 A 10-year loan agreement, which the company entered into 3 years ago, provides that dividend payments may not exceed net income earned after taxes subsequent to the date of the agreement. The balance of retained earnings at the date of the loan agreement was $420,000. From that date through December 31, 2007, net income after taxes has totaled $570,000 and cash dividends have totaled $320,000. On the basis of these data, the staff auditor assigned to this review concluded that there was no retained earnings restriction at December 31, 2007. discuss any additional disclosures in the financial statements and notes that the auditor should recommend to her client. (The cumulative effect of the four items should not be considered

Rem Inc. produces electronic components for sale to manufacturers of radios, television sets, and digital sound systems. In connection with her examination of Rem's financial statements for the year ended December 31, 2007, Maggie Zeen, CPA, completed field work 2 weeks ago. Ms. Zeen now is evaluating the significance of the fol