If you expect the market to increase which of the following portfolios should you purchase?

 If you expect the market to increase which of the following portfolios should you purchase?
Select one:
a. a portfolio with a beta of 1.0
b. a portfolio with a beta of 0
c. a portfolio with a beta of -0.5
d. a portfolio with a beta of 1.9

Answer

The correct option is "d. a portfolio with a beta of 1.9"
Explanation
when you are expecting the market to increase, so you should buy a portfolio whose beta with the market is high. The portfolio with 1.9beta means that if the market increases by 1 then the portfolio will increase by 1.9times.

A firm is evaluating an investment proposal which has an initial investment of $5,000 and cash flows presently valued at $4,000. The net present value of the investment is ______.
Select one:
a. $9,000
b. -$4,000
c. -$1,000
d. $4,000

 Answer

c. -$1,000

Working

Net Present value = Present value of cash flow to be received - Initial Investment

Net Present value = 4000 - 5000

Net Present value = -1000

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Milestone One: Supply, Demand, and Market Equilibrium. This milestone should be a paper structured as follows:

 Milestone One: Supply, Demand, and Market Equilibrium. This milestone should be a paper structured as follows: a. Describe the price elasticity of supply or demand for a product or service at any Walmart store. b. Explain how two nonprice factors impact the demand on the chosen product or service. c. Explain how two nonprice factors impact the supply of the chosen product or service. d. Define the industry and market equilibrium associated with thr product or service. e. Predict thr effect of changes in supply and demand on the market equilibrium. f. Describe the decisions related to supply and demand for the product or sevice you would make based on the predicted changes in supply and demand on the market equilibrium.

 Answer

Price elasticity refers to how quantity demanded or supplied of a good changes when it's price changes. In other words it is how much people react to a change in price of an item.

Price elasticity of demand refers to how changes to price affect the quantity demanded of a good. Conversely, price elasticity of supply refers to how changes in price affect the quantity supplied. Thus market equilibrium is achieved when demand is equal to quantity supplied.

Nonprice factors play an important role in determination of price elasticity. There are various non-price factors such as income, price of related goods, taste and preferences,etc which affect demand of a good. As income increases demand for a particular good also increases and vice versa. Price of substitute good also affect the demand.

Non-price factors also affect supply such as cost of production, improvement in technology,taxes etc. When cost of production as well as taxes increase price will also increase resulting in fall in supply.

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Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment.

 Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment. The test revealed the following: book value of division’s assets, $26.5 million; fair value of division’s assets, $21 million; undiscounted sum of estimated future cash flows generated from the division’s assets, $24 million.
 
What amount of impairment loss should C&R recognize?

 

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Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment.

 Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment. The test revealed the following: book value of division’s assets, $26.5 million; fair value of division’s assets, $21 million; undiscounted sum of estimated future cash flows generated from the division’s assets, $28 million.
 
What amount of impairment loss should C&R recognize

 

Lawler Clothing sold manufacturing equipment for $16,000. Lawler originally purchased the equipment for $80,000, and depreciation through the date of sale totaled $71,000.

 Lawler Clothing sold manufacturing equipment for $16,000. Lawler originally purchased the equipment for $80,000, and depreciation through the date of sale totaled $71,000.

What was the gain or loss on the sale of the equipment?

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On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is expected to be $2,000. The company expects the equipment to operate for 10,000 hours.

On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is expected to be $2,000. The company expects the equipment to operate for 10,000 hours.
Required:
a. Calculate depreciation expense for 2021 and 2022 using sum-of-the-years’-digits assuming the equipment was purchased on January 1, 2021.

b. Calculate depreciation expense for 2021 and 2022 using sum-of-the-years’-digits assuming the equipment was purchased on March 31, 2021.

 

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