Jamie Peters invested $126,000 to set up the following portfolio one year ago:
|
Asset |
Cost |
Beta at purchase |
Yearly income |
Value today |
|
|
A |
$40,000 |
0.79 |
$1,400 |
$40,000 |
|
|
B |
$37,000 |
0.97 |
$1,600 |
$38,000 |
|
|
C |
$35,000 |
1.55 |
$0 |
$41,500 |
|
|
D |
$14,000 |
1.27 |
$300 |
$14,500 |
|
a. Calculate the portfolio beta on the basis of the original cost figures.
b. Calculate the percentage return of each asset in the portfolio for the year.
c. Calculate the percentage return of the portfolio on the basis of original cost, using income and gains during the year.
d. At the time Jamie made his investments, investors were estimating that the market return for the coming year would be 11%. The estimate of the risk-free rate of return averaged 3% for the coming year. Calculate an expected rate of return for each stock on the basis of its beta and the expectations of market and risk-free returns.
e. On the basis of the actual results, explain how each stock in the portfolio performed differently relative to those CAPM-generated expectations of performance. What factors could explain these differences?
In: Finance
Using the Microsoft Excel, kindly prepare a cost production report under the FIFO Method.
Paper Needs Inc, has the following production data for the month of June 20xx.
| DEPARTMENT I | DEPARTMENT II | |||||
| QUANTITY SCHEDULE | Units | Percentage of completion | Units | Percentage of completion | ||
| Work-in process, beginning | 15,000 | 2/3 complete | 9,000 | 1/3 complete | ||
| Transferred to next department | 30,000 | ? | ||||
| Work-in process, end | 5,000 | 2/5 complete | 8,000 | 7/8 complete | ||
| COST ANALYSIS | DEPARTMENT I | DEPARTMENT II | ||||
| Work-in process, beginning | ||||||
| Cost from preceding department | ||||||
| Costs from this department | ||||||
| Materials | ₱16,290 | ₱7,992 | ||||
| Labor | 6,630 | 3,996 | ||||
| Overhead | 2,100 | 2,664 | ||||
| Costs added this month | ||||||
| Materials | ₱21,720 | ₱61,272 | ||||
| Labor | 14,618 | 46,620 | ||||
| Overhead | 5,068 | 31,080 | ||||
In Department I, all materials are added at the start of the process, while labor and overhead are applied evenly throughout the process.
In Department II, 50% of materials are added at the start of the process and the balance is added when the process is ¾ completed. Conversion costs are applied uniformly to the process.
In: Accounting
Lovell Computer Parts Inc. is in the process of setting a
selling price on a new component it has just designed and
developed. The following cost estimates for this new component have
been provided by the accounting department for a budgeted volume of
45,000 units.
| Per Unit | Total | ||||||
| Direct materials | $51 | ||||||
| Direct labor | $30 | ||||||
| Variable manufacturing overhead | $20 | ||||||
| Fixed manufacturing overhead | $495,000 | ||||||
| Variable selling and administrative expenses | $18 | ||||||
| Fixed selling and administrative expenses | $225,000 | ||||||
Lovell Computer Parts management requests that the total cost per
unit be used in cost-plus pricing its products. On this particular
product, management also directs that the target price be set to
provide a 18% return on investment (ROI) on invested assets of
$1,000,000.
A.) Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 18% on this new component.
B.) Assuming that the volume is 36,000 units, compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 18% on this new component.
In: Accounting
describe three things a construction worker would have
to read a paragraph or more?
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How should Quality Assurance and Quality Control be
executed on a stadium construction project?
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