Questions
Use the following information: Today is June 8th The company knows that it will need 20,000...

Use the following information:

Today is June 8th

The company knows that it will need 20,000 barrels of jet oil oil at some time in October or November.

Heating oil futures contracts are currently traded for delivery every month on the exchange

Each contract size is 1,000 barrels.

  • the standard deviation of monthly changes in the price of a jet oil is 0.55,
  • the standard deviation of monthly changes in the futures prices of a heating oil is 0.71,
  • and the coefficient correlation between the two changes is 0.85
  • Futures price on June 8 is $85.00 per barrel.

Later, the company finds that it is ready to purchase the jet oil on October 10

Spot price (of jet fuel) and futures price (on heating oil) on Oct. 10 are $89.00 per barrel and $87.80 per barrel.

  1. What is the optimal hedge ratio and what is the optimal number of contracts?
  2. Should the company take LONG or SHORT?
  3. Which delivery month?
  4. With asset mismatch and timing mismatch, what is the total effective price paid? And what is the effective price the company paid per barrel?

5. If no cross hedging was necessary (i.e. no asset mismatch, hence the optimal hedge ratio would be 1), assuming that there was a JET OIL FUTURES, what would have been the number of contracts to enter? And what would have been the effective price per barrel and the total effective price paid on Oct. 10?

6. If it was a perfect hedge (no timing mismatch or asset mismatch at all), what would have been the effective price per barrel and the total effective price?

In: Finance

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are...

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux's accounting records is provided also.

DUX COMPANY
Comparative Balance Sheets
December 31, 2018 and 2017
($ in 000s)
2018 2017
Assets
Cash $ 107 $ 47
Accounts receivable 51 69
Less: Allowance for uncollectible accounts (6 ) (5 )
Dividends receivable 4 3
Inventory 85 80
Long-term investment 51 44
Land 85 70
Buildings and equipment 195 210
Less: Accumulated depreciation (44 ) (80 )
$ 528 $ 438
Liabilities
Accounts payable $ 40 $ 59
Salaries payable 3 6
Interest payable 9 3
Income tax payable 9 10
Notes payable 15 0
Bonds payable 80 55
Less: Discount on bonds (2 ) (3 )
Shareholders' Equity
Common stock 210 200
Paid-in capital—excess of par 24 20
Retained earnings 152 88
Less: Treasury stock (at cost) (12 ) 0
$ 528 $ 438
DUX COMPANY
Income Statement
For the Year Ended December 31, 2018
($ in 000s)
Revenues
Sales revenue $ 370
Dividend revenue 4 $ 374
Expenses
Cost of goods sold 205
Salaries expense 32
Depreciation expense 6
Bad debt expense 1
Interest expense 9
Loss on sale of building 2
Income tax expense 29 284
Net income $ 90


Additional information from the accounting records:

A building that originally cost $56,000, and which was three-fourths depreciated, was sold for $12,000.

The common stock of Byrd Corporation was purchased for $7,000 as a long-term investment.

Property was acquired by issuing a 15%, seven-year, $15,000 note payable to the seller.

New equipment was purchased for $41,000 cash.

On January 1, 2018, bonds were sold at their $25,000 face value.

On January 19, Dux issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time.

Cash dividends of $12,000 were paid to shareholders.

On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of $12,000.


Required:
Prepare the statement of cash flows of Dux Company for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

In: Accounting

Infocomp Systems Lab is a research and development (R&D) company that develops computer systems and software...

Infocomp Systems Lab is a research and development (R&D) company that develops computer systems and software primarily for the medical industry. The lab has proposals from its own researchers for eight new projects. Each of the proposed research projects requires limited resources, and it is not possible to undertake all of them. The following table shows the developmental budget, the number of researchers, and the expected annual sales from each project if successfully developed and implemented:

Project

Developmental Budget ($1,000,000s)

Number of Research Personnel

Expected Annual

Sales ($1,000,0005)

1

$0.675

6

$0.82

2

1.050

5

1.75

3

0.725

7

1.60

4

0.430

8

1.90

5

1.240

10

0.93

6

0.890

6

1.70

7

1.620

7

1.30

8

1.200

6

1.80

The lab has developed the following set of prioritized goals for selecting which projects to initiate:

(1) The company would like to remain within a total developmental budget of $5,000,000.

(2) The number of available research personnel is 27, and Infocomp would like to avoid obtaining extra researchers.

(3) The company would like the expected future annual sales from the implemented projects to be at least $6,500,000.

(4) Projects 1, 3, 4, and 6 are considered offensive in that they represent new product initiatives, while projects 2, 5, 7, and 8 are existing product upgrades and thus defensive in nature. The lab would like to select at least two projects from each group.

(5) Projects 2, 3, 5, 6, and 7 are considered the most risky of the projects, and the company would prefer not to select any more than three of these projects.

(6) The lab’s owner has indicated that she would like to see projects 5 and 6 initiated if doing so would not interfere with the achievement of any of the more important goals determined by the lab’s top management.

a. Formulate a goal programming model to determine which projects Infocomp Systems Lab should select to best achieve its goals.

No need to solve in excel. Looking for Decision variables, objective function and constraints.

In: Operations Management

{Exercise 3.37 (Algorithmic)} Consider a sample with a mean of 60 and a standard deviation of...

{Exercise 3.37 (Algorithmic)} Consider a sample with a mean of 60 and a standard deviation of 6. Use Chebyshev's theorem to determine the percentage of the data within each of the following ranges (to the nearest whole number). 50 to 70, at least % 35 to 85, at least % 52 to 68, at least % 46 to 74, at least % 43 to 77, at least %

In: Statistics and Probability

Does anyone have the answers or a guide to a case study on i-human for David...

Does anyone have the answers or a guide to a case study on i-human for David Douglas? He is a 74 y/o patient, 6' 0" (183 cm), and 165.0 lb (75.0 kg). His admission diagnosis is "Day 1 Rehab for left total hip arthroplasty, post-op day 5"

In: Nursing

Ask the user for a filename. In binary format, read all the integers in that file....

Ask the user for a filename. In binary format, read all the integers in that file. Show the number of integers you read in, along with the maximum and minimum integer found. Language is Java.

/////////////input/////////

n1.dat

////////// output//////////

Enter a filename\n
Found 50 integers.\n
Max: 9944\n
Min: 74\n

In: Computer Science

1. Sales revenue would appear on Select one: a. Income Statement b. Statement of Retained Earnings...

1.

Sales revenue would appear on

Select one:

a. Income Statement

b. Statement of Retained Earnings

c. Balance Sheet Statement

d. Statement of Cash Flows

2.

The entry to record $1,500 credit sales would be:

Select one:

a. Cash                                  1,500
              Sales Revenue                                   1,500

b. Accounts Receivable            1,500
               Sales Revenue                                 1,500

c. Sales Revenue                     1,500
                Accounts Receivable                         1,500

d. Cash                                  1,500
                Accounts Receivable                          1,500

3.

The entry to record a payment of $900 accounts payable would be:

Select one:

a. Cash                                           900
                 Accounts Payable                              900

b. Dividends                                   900
                 Cash                                                 900

c. Accounts Payable                       900
                 Cash                                                 900

d. Accounts Payable                       900
                  Retained Earnings                           900

In: Accounting

What steps could you take to improve your credit worthiness? Some businesses sell products and services...

  1. What steps could you take to improve your credit worthiness?
  2. Some businesses sell products and services that can injure customers. List three (3) examples and explain how these companies probably use their insurance.

In: Finance

1. Use two diagrams (one for Alberta, one for the world) to explain why the following...

1. Use two diagrams (one for Alberta, one for the world) to explain why the following might be
true: A drought around the world raises the total revenue that farmers received from the sale of
grain, but a drought only in Alberta reduces the total revenue that Alberta farmers receive.
2. You have the following information about good X and good Y:
• Income elasticity of demand for good X: -3• Cross-price elasticity of demand for good X with respect to the price of good Y: 2
Would an increase in income and a decrease in the price of good Y unambiguously decrease the
demand for good X? Why or why not?
3. A price change causes the quantity demanded of a good to decrease by 30 percent, while the
total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic?
Explain.

In: Economics

Given the data shown in the table for​ a​ monopolist: Output Price Total Cost MC Total...

Given the data shown in the table for​ a​ monopolist:

Output Price Total Cost MC Total Revenue Marginal Revenue
1 10 10
2 9 11
3 8 13
4 7 16
5 6 20
6 5 25

1. Complete the​ table​ -- calculate​ ​MC, Total Revenue and MR for all output levels.

2. When the output level is 6​ units​: ​  

a. Should the​ monopolist​ increase, decrease or leave​ output​ unchanged? ​ 

b. Is MR​ greater​ than,​ less​ than, or equal​ to​ MC?

3. Identify the profit maximizing P and Q.

4. What is the​ ​per-unit profit when​ Q​ =​ 2?

5. What is the total profit at​ the​ profit-maximizing​ solution?

6. Suppose barriers to entry overtime​ significantly​ decrease. Will the profit maximizing price​ increase, decrease or stay the​ same?

In: Economics