| Individual | State 1 Return (p=0.3) | State 2 Return (p=0.5) | State 3 Return (p=0.2) |
| A | 5% | 11% | 9% |
| B | 6% | 8% | -3% |
Given the above information on two investments A and B, calculate the following statistics:
1. Calculate the Expected Return for A. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
2. Calculate the standard deviation for A. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
3. Calculate the Expected Return for B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
4. Calculate the standard deviation for B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
5. Assume that the expected return for A is 10% and the expected return for B is 5.5%. Calculate the expected return on a portfolio consisting of 60% A and 40% B. Give your answer in decimal form to 3 decimals places. For example, 9% is 0.09.
In: Finance
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $16 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for three possible states of the world: $5.2 million with a 0.2 probability, $1.5 million with a 0.5 probability, and $0.4 million with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.
Debt/Capital ratio is 0.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 10%, interest rate is 9%.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 50%, interest rate is 11%.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 60%, interest rate is 14%.
| RÔE = | % |
| σ = | % |
| CV = |
In: Finance
Please show all work
You have a rubber ball having a radius of 0.5 m, a rubber cylinder have a height of 0.2 m and a radius of 0.3 m, and rubber cube have a side length of 0.2m. Assume they have very little mass, so their weight can be ignored. You have 3 m by 2 m by 1 m treasure chest that has a mass of 10000 kg.
Part a) How many spheres do you need to attach to the chest for it to float to the surface? Assume your spheres are massless and are completely submerged.
Part b) How many cylinders do you need to attach to the chest for it to float to the surface? Assume your cylinders are massless and are completely submerged.
Part c) How many cubes do you need to attach to the chest for it to float to the surface? Assume your cubes are massless and are completely submerged.
Part d) What is the waterline of the chest if you attach 10 spheres, 100 cylinders, and 800 cubes to the chest? Assume your spheres, cylinders, and cubes are massless and are completely submerged
In: Physics
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $14 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for three possible states of the world: $4.7 million with a 0.2 probability, $1.7 million with a 0.5 probability, and $0.6 million with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.
Debt/Capital ratio is 0.
RÔE = % σ = % CV =
Debt/Capital ratio is 10%, interest rate is 9%.
RÔE = % σ = % CV =
Debt/Capital ratio is 50%, interest rate is 11%.
RÔE = % σ = % CV =
Debt/Capital ratio is 60%, interest rate is 14%.
RÔE = % σ = % CV =
In: Finance
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $17 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 25%. The CFO has estimated next year's EBIT for three possible states of the world: $5.5 million with a 0.2 probability, $2.4 million with a 0.5 probability, and $500,000 with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places.
Debt/Capital ratio is 0.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 10%, interest rate is 9%.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 50%, interest rate is 11%.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 60%, interest rate is 14%.
| RÔE: | % |
| σ: | % |
| CV: |
In: Finance
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $16 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 25%. The CFO has estimated next year's EBIT for three possible states of the world: $5.2 million with a 0.2 probability, $2 million with a 0.5 probability, and $400,000 with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places.
Debt/Capital ratio is 0.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 10%, interest rate is 9%.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 50%, interest rate is 11%.
| RÔE: | % |
| σ: | % |
| CV: |
Debt/Capital ratio is 60%, interest rate is 14%.
| RÔE: | % |
| σ: | % |
| CV: |
In: Finance
FINANCIAL LEVERAGE EFFECTS
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $10 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for three possible states of the world: $4.3 million with a 0.2 probability, $2.2 million with a 0.5 probability, and $0.9 million with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.
Debt/Capital ratio is 0.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 10%, interest rate is 9%.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 50%, interest rate is 11%.
| RÔE = | % |
| σ = | % |
| CV = |
Debt/Capital ratio is 60%, interest rate is 14%.
| RÔE = | % |
| σ = | % |
| CV = |
In: Finance
The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $11 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for three possible states of the world: $5.5 million with a 0.2 probability, $2.2 million with a 0.5 probability, and $0.6 million with a 0.3 probability. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.
Debt/Capital ratio is 0. RÔE = % σ = % CV =
Debt/Capital ratio is 10%, interest rate is 9%. RÔE = % σ = % CV =
Debt/Capital ratio is 50%, interest rate is 11%. RÔE = % σ = % CV = Debt/Capital ratio is 60%,
interest rate is 14%. RÔE = % σ = % CV =
In: Finance
Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Zed and Adrian estimate that the demand for bicycles this season will be 20, 30, 40, or 50 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $64 if they order 40, $56 if they order 60. The bicycles will be sold for $76 each if they are not on sale. Any bicycles left over at the end of the season will go on sale and will be sold at $46 each. Create a payoff table that helps Z to A Bicycle decide how many bicycles (20, 40, or 60) to order. Answer the following questions based on the payoff table.
In: Economics
Direct Labor Cost Budget
Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:
| Junior | Pro Striker | |
| Production budget | 9,800 units | 18,500 units |
Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:
| Forming Department | Assembly Department | |
| Junior | 0.2 hour per unit | 0.4 hour per unit |
| Pro Striker | 0.3 hour per unit | 0.75 hour per unit |
The direct labor rate for each department is as follows:
| Forming Department | $16 per hour |
| Assembly Department | $8 per hour |
Prepare the direct labor cost budget for July.
| Ace Racket Company | ||
| Direct Labor Cost Budget | ||
| For the Month Ending July 31 | ||
| Forming Department | Assembly Department | |
| Hours required for production: | ||
| Junior | ||
| Pro Striker | ||
| Total | ||
| Hourly rate | x$ | x$ |
| Total direct labor cost | $ | $ |
In: Accounting