Gaermont Sauces is a manufacturer of sauces. This company buys two ingredients on the market (A1 and A2). The price at which A1 buys is $ 20.00 per kilo and the cost of A2 is $ 40.00 per kilo. The supplier supplying these products to Gaermont can only supply 80 kilos of product A1 and 75 kilos of product A2. The ingredients are mixed to form two types of sauce, "Special Spicy" and "The Real Spicy", or they can be sold in the market without the need to process them. A bottle of "Spicy Special" contains 300 grams of ingredient A1 and 400 grams of ingredient A2 and sells for $ 35.00. A bottle of "The Real Hot" contains 500 grams of ingredient A1 and 200 grams of ingredient A2 and retails for $ 30.00. The cost of the containers and other specialties is $ 3 for "Special spicy" and $ 4 for "The real spicy". If the company decides to sell the raw ingredients, the price at which it sells the kilo of A1 is $ 22.00 and the maximum market demand is 35 kilos, while the price at which it could sell the kilo of A2 is $ 45.00 and It could sell up to 20 kilos. Consider that you could only sell 100 bottles of each type of sauce. Formulate this problem as a L.P. that allows the company to maximize its profits. What is the maximum profit that Gaermont Sauces can obtain?

1. Suppose that you SHORT FIVE May 2016 Gold futures contracts at the opening price of $1,119.40/oz on May 4, 2019. You close out your position on May 8, 2019 at a price of $1,110.50/oz. The initial margin and the maintenance margin requirements are $4,400 per contract and $4,000 per contract, respectively. Contract size is 100 troy ounces per contract. Assume that you deposit the initial margin in cash for the FIVE contracts sold and did not withdraw the excess on any given day. (15 pts)

1. Complete the table below given the following daily settlement prices. (9 points)

2. What is your total profit (loss) on the contracts you sold?
3. What is your percentage return based on the amount put up as margin?
4. If, on May 8, 2016, you chose to deliver the gold, what would you receive and what would you be delivering? State clearly the transactions and the dollar amount involved.

Common text for questions 3 and 4:

An investor buys three shares of XYZ at the beginning of 2002 for $100 apiece. After one year, the share price has increased to $110 and he receives a dividend per share of $4. Right after receiving the dividend, he buys two additional shares at $110. After another year, the share price has dropped to $90, but the investor still receives a dividend per share of $4. Right after receiving the dividend, he sells one share at $90. After another year, the share price has gone up to $95, the investor receives a dividend per share of $4 and sells all shares at $95 immediately after receiving dividends.

3. What are the arithmetic and geometric average time-weighted rates of return and what is the dollar-weighted rate of return of the investor in the above example (for the dollar-weighted return assume that (i) the cash flows from dividends received at the end of a given year are based on the number of shares held at the beginning of that year, and (ii) cash flows from dividends occur on the same day as the cash flows from buying and selling shares)?

4. Why is the dollar-weighted average rate of return in the above example lower than the geometric average rate of return?

CSUSM opens a brokerage account and purchases 600 shares of CSU at $45 per share. She borrows $6,000 from her broker to help pay for the purchase. The interest rate on the loan is 7%.

o What is the margin in CSUSM account when she first purchases the stock?

o If the share price falls to $40 per share by the end of the year, what is theremaining margin in her account?
o If the maintenance margin requirement is 30%, will she receive a margin call?

o What is the rate of return on her investment?

Suppose you buy a 6 percent coupon bond today for $1,080. The bond has 10 years to maturity. What rate of return do you expect to earn on your investment? Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? What is the realized yield on your investment? Compare this yield to the YTM when you first bought the bond. Why are they different? Assume interest payments are reinvested at the original YTM.

A firm sells to consumers who each have a demand demand function given by QD = 80 - P. It has constant marginal cost C = 20 with no fixed cost. Compared to the optimal two-part tariff, a policy of "buy the first 20 units for $60 each and get the next 20 for $40 each" would yield:

A. $600 less in profits

B.$400 less in profits

C.$200 less in profits

D. The same profits because the average price is the same in both cases.

1. In November of 20x1, when you make your annual budget for the calendar year, you budget $50 per month for pet food for your dog in 20X2. Then on May 1, 20X2 you get a second dog (who eats exactly as much as the first dog), and on August 1, 20X2 the price of dog food increases by 10%.
   1. What is your actual annual cost of pet food for 20X2?
   2. How much is the variance for the cost of pet food for 20X2?
   3. What percentage of the variance is due to getting the second dog?

Ripkin Company issues 9%, five-year bonds dated January 1, 2017, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market rate is 8% on the issue date.

Required

1. Calculate the total bond interest expense over the bonds’ life.

2. Prepare a straight-line amortization table like Exhibit 14.11 for the bonds’ life.

3. Prepare the journal entries to record the first two interest payments