what is the price of a european call option on a non-dividend-paying stock when the stock price is $52, the strike price is $50, the risk-free interest rate is 12% per annum, the volatility is 30% per annum, and the time to maturity is three months?
Answers
The price of the European call option is $4.79.
To calculate the price of a European call option on a non-dividend-paying stock, we need to use the Black-Scholes formula. The formula takes into account five variables: the current stock price (S), the strike price (K), the time to maturity (T), the risk-free interest rate (r), and the volatility of the stock (σ).
Using the given values:
S = $52 (current stock price)
K = $50 (strike price)
T = 3/12 = 0.25 (time to maturity in years)
r = 12% per annum = 0.12 (risk-free interest rate)
σ = 30% per annum = 0.30 (volatility)
We can plug these values into the Black-Scholes formula:
\(C = SN(d1) - Ke^{(-r*T)*N(d2)\)
where:
\(d1 = (ln(S/K) + (r + \sigma ^2/2)T) / (\sigma sqrt(T))\\d2 = d1 - \sigma\times \sqrt{t}\)
N() is the cumulative distribution function of the standard normal distribution
Plugging in the values, we get:
\(d1 = (ln(52/50) + (0.12 + 0.30^2/2)0.25) / (0.30\sqrt{0.25} )) = 0.7229\\d2 = 0.7229 - 0.30\times sqrt(\sqrt{0.25} ) = 0.5329\\N(d1) = 0.7669\\N(d2) = 0.7021\\C = 520.7669 - 50e^{(-0.12\times 0.25)\times 0.7021 = $4.79\\\)
Therefore, the price of the European call option is $4.79.
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Related Questions
Forty-nine items are randomly selected from a population of 500 items. The sample mean is 40 and the sample standard deviation 9. (Use t Distribution Table & z Distribution Table. )
Answers
The confidence interval for the population mean is between 36.551 and 43.449 with a 99% confidence level. This means that if we repeated this sampling process many times, we can expect the true population means to be within this range in 99% of cases.
To develop a 99% confidence interval for the population mean, we can use the t-distribution since the sample size is less than 30 and the population standard deviation is unknown. The formula for the confidence interval is:
Confidence interval = sample mean ± (t-value x standard error)
where the standard error is equal to the sample standard deviation divided by the square root of the sample size:
Standard error = sample standard deviation / sqrt(sample size)
First, we can calculate the t-value using the t-distribution table with a degree of freedom of 48 (sample size minus 1) and a 99% confidence level. The t-value is approximately 2.682.
Next, we can calculate the standard error:
Standard error = 9 / sqrt(49) = 1.286
Then, we can calculate the confidence interval:
Confidence interval = 40 ± (2.682 x 1.286) = (36.551, 43.449)
The answer provided in the question is correct but it should be rounded to 3 decimal places as 36.552 and 43.448.
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Complete question:
Forty-nine items are randomly selected from a population of 500 items. The sample mean is 40 and the sample standard deviation is 9. (Use t Distribution Table & z Distribution Table.) Develop a 99% confidence interval for the population means. (Round your final answers to 3 decimal places.) The answer is complete but not entirely correct. The confidence interval is between 36.552 and 43.448
He said," I don't like you" change in indirect speech
Answers
Answer:
whether'.
Explanation:
The application of scientific knowledge to the development and improvement of goods and services is generally referred to as ______. Multiple choice question. technology information production
Answers
Answer:
Technology.
Explanation:
As the definition is seen above, these qualities are directed towards technology. Technology has advanced produce and sales of goods and services a lot. It shows itself in fastening and making production easier. And also in different other forms that come as advertising, E-commerce, communication etc. Orders of certain goods are been sent thousands miles away from the producing country and are seen to be received safe and sound at the other end of the purchase country. Also adverts can be seen of a Chinese product in far away Africa through television commercials and also internet.
Using the SMART goal-writing criteria, what refers to being able to complete a goal? A. Realistic B. Measurable C. Attainable D. Specific
Answers
Answer:
C.
Explanation:
attainable or to attain the goal
in aggregate planning a firm tries to balance demand with inventories. a. false b. true
Answers
The answer is-True. In aggregate planning, a firm aims to balance the demand for its products or services with the available inventories.
Aggregate planning is a process of developing a comprehensive strategy that determines the production, inventory, and workforce levels required to meet the anticipated demand for the products or services of a firm. The objective of aggregate planning is to minimize the production costs while ensuring customer satisfaction and meeting the demand.
The planning process involves analyzing historical data, forecasting future demand, and adjusting production, inventory, and workforce levels accordingly. By doing so, a firm can avoid stockouts, reduce inventory holding costs, and maintain efficient production levels. Therefore, it is essential for firms to engage in aggregate planning to ensure a smooth production process.
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Which of the following steps in the college application process should be done as a junior, rather than as a senior?
1. Obtain your final high school transcript.
2. Register for the PSAT.
3. Write the essay that will accompany your application.
4. Gather letters of recommendation from teachers and mentors.
15 points instead of 10.
Answers
Answer:
4. Gather letters of recommendation from teachers and mentors.
Explanation:
Answer:
2. Register for the PSAT.
Explanation:
I'm a Mug Maniac.
what are the sources of income of the government? where do these taxes go?
Answers
Answer:
The taxes go in the national income of country
in a long-run equilibrium, a. neither a competitive firm nor a monopolistically competitive firm charges a markup over marginal cost. b. only a monopolistically competitive firm operates at its efficient scale. c. only a perfectly competitive market operates at a socially optimal quantity. d. both a perfectly competitive firm and a monopolistically competitive firm operate at their efficient scale of production.
Answers
In a long-run equilibrium, option d) both a perfectly competitive firm and a monopolistically competitive firm operate at their efficient scale of production.
This means that they are producing at a level where their marginal cost is equal to their marginal revenue. However, they may not be charging the same price as their marginal cost, as monopolistically competitive firms have some degree of market power and may charge a markup over their marginal cost. It is important to note that while monopolistically competitive firms may not be operating at the socially optimal quantity, they are still producing at a level that is efficient given the nature of their market. Thus, statement (d) is the correct answer to the question.
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Suppose that cheese is a normal good for Raj
while crackers are an inferior good. If the price of
cheese falls, what happens to Raj’s consumption
of crackers? What happens to his consumption of
cheese? Explain.
Answers
If cheese is a normal good for Raj while crackers are an inferior good, then if the price of cheese falls, his consumption of cheese will increase. On the other hand, his consumption of crackers will decrease when the price of cheese falls.
Here is an explanation:
When cheese, which is a normal good for Raj falls in price, the purchasing power of Raj’s income increases. This increased purchasing power allows Raj to buy more of both goods that is cheese and crackers. As cheese is a normal good, the increase in Raj's income will lead to an increase in his consumption of cheese.
On the other hand, when the price of cheese falls, the income effect for crackers is negative because crackers are inferior goods. So, when the price of cheese falls and Raj's income increases, he will decrease his consumption of inferior good crackers. This is because he can now afford more cheese, which he prefers over crackers.
Hence, when the price of cheese falls, Raj’s consumption of cheese will increase and his consumption of crackers will decrease.
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What happens when an appraiser determines a property’s value to be less than the pre-approved loan amount?
Answers
When an appraiser determines a property’s value to be less than the pre-approved loan amount then most buyers will have an appraisal contingency, so they can go back and get a serious money back.
An appraisal is an unbiased professional opinion on the value of a home and is used whenever a mortgage involves the purchase, refinance, or sale of that property.
A qualified appraiser generates a report based on direct inspection, using recent sales of similar properties, current market trends, and aspects of the home (e.g.: amenities, floor plans, square footage, etc.) square feet) to determine the assessed value of the property. Borrowers typically pay due diligence fees, which can run up to several hundred dollars.
When the appraised value is lower than expected, the transaction may be delayed or even canceled. Almost all mortgage applications require the lender to appraise the home as part of the underwriting process. Ideally, the lender wants to see the appraised value equal to or greater than the price agreed upon by the buyer and seller, but sometimes the appraised price is lower. In these situations, the buyer and seller must come to a mutually beneficial solution to ensure the transaction goes through.
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Role of risk committee and their members
Answers
Answer:
The Risk Committee (the “Committee”) is an independent committee of the Board of Directors that has, as its sole and exclusive function, responsibility for the oversight of the risk management policies and practices of the Corporation's global operations and oversight of the operation of the Corporation's global risk ...
Explanation:
sna makatulong:)
A restaurant chain is thinking about opening up a pop-up restaurant that it will run for two years. For both years, the restaurant will generate incremental net income (after depreciation and taxes) of $625k per year (assume these cash flows take place after exactly one year and after exactly two years). The restaurant will require a new temporary building structure that costs $359k and that will be straight-line depreciated to a salvage value of 0 over two years. This project will also require an upfront investment working capital of $273k, which will be returned at the end of the two-year project. The opportunity cost of capital is 9% and the tax rate is 27%. What is the NPV for this project?
Answers
The NPV for this project is $359.83k, which is positive, indicating that this project is expected to generate value for the company and should be undertaken.
To calculate the net present value (NPV) of this project, we need to discount the future cash flows to their present values and then sum them up.
Here's how we can calculate the NPV of the project:
Calculate the annual incremental net income after depreciation and taxes:
Annual incremental net income = $625k
Calculate the initial investment:
Initial investment = Building cost - accumulated depreciation + working capital
= $359k - ($359k/2) + $273k
= $426.5k
Calculate the cash flows for each year of the project:
Year 0: -$426.5k (initial investment)
Year 1: $625k - $102.33k (depreciation) = $522.67k (after-tax cash flow)
Year 2: $625k - $256.67k (depreciation) = $368.33k (after-tax cash flow)
Year 2: $273k (after-tax cash flow from working capital recovery)
Calculate the discount factor for each year using the opportunity cost of capital (9%) and the tax rate (27%):
Year 0: 1 / (1 + 0.09) = 1.000
Year 1: 1 / (1 + 0.09) * (1 - 0.27) = 0.773
Year 2: 1 / (1 + 0.09)* (1 - 0.27) = 0.595
Year 2: 1 / (1 + 0.09) * (1 - 0.27) = 0.595
Calculate the present value of each cash flow:
Year 0: -$426.5k * 1.000 = -$426.5k
Year 1: $522.67k * 0.773 = $404.23k
Year 2: $368.33k * 0.595 = $219.36k
Year 2: $273k * 0.595 = $162.74k
Sum up the present values of all cash flows to get the NPV:
NPV = -$426.5k + $404.23k + $219.36k + $162.74k = $359.83k
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How does change in cost of energy and raw materials, borrowing and premises affect a house building company
Answers
Answer:
A shift in the cost of electricity and raw materials may have a major influence on a home construction firm. For example, if the cost of electricity and raw materials rises, the corporation may have to spend more on these items, resulting in higher production expenses. This rise in manufacturing costs may eventually result in lower profit margins or an increase in the final price of the houses, making them less competitive in the market.
Likewise, changes in borrowing costs might have an influence on the company's profitability. If interest rates rise, the cost of borrowing money to invest in the firm rises, resulting in greater debt-service expenses. This may limit the company's capacity to invest in growth possibilities, which can be negative on long term profitability impact.
Likewise, changes in borrowing costs might have an influence on the company's profitability. If interest rates rise, the cost of borrowing money to invest in the firm rises, resulting in greater debt-service expenses. This may limit the company's capacity to invest in growth possibilities, which might harm long-term profitability.
Changes in facility expenses might also have an impact on the company's profitability. For example, increasing the cost of rent or mortgage payments for the company's offices or facilities may result in increased overheads and lower profitability. Furthermore, if the firm decides to grow or relocate, it may incur considerable upfront expenses, which may have an impact on short-term profitability.
in year 1, manufacturing costs as a percentage of sales are assumed to have a pert distribution with a minimum value of 65 percent, a maximum value of 90 percent, and a most likely value of 80 percent. thereafter it is assumed that manufacturing cost will be the same percentage of sales as year 1. fixed cash cost (rent) is expected to be $100,000 in the first year. however, the fixed cash cost is expected to grow at the expected inflation rate at 4 percent a year
Answers
The expected fixed cash cost (rent) in Year 1 is $100,000. This amount is expected to grow at a rate of 4% per year due to inflation. Thus, the fixed cash cost (rent) in Year 2 is expected to be $104,000. This trend is expected to continue in subsequent years.
The fixed cash cost for the second year can be calculated as follows:
Fixed Cash Cost for Second Year = $100,000 x (1+ 4%) = $104,000.
In economics, inflation refers to a well-known growth in the expenses of goods and services in an economic system. whilst the general fee stage rises, every unit of forex buys fewer goods and offerings; consequently, inflation corresponds to a reduction in the purchasing energy of cash. the alternative to inflation is deflation, a sustained lower in the widespread rate level of goods and offerings. The common degree of inflation is the inflation fee, the annualized percent change in a popular charge index. As expenses no longer grow at an equal charge, the client price index (CPI) is frequently used for this reason. The employment cost index is also used for wages in the USA.
Most economists agree that high stages of inflation in addition to hyperinflation—that have severely disruptive consequences on the real financial system—are a result of chronic excessive growth within the cash supply. Views on low to slight charges of inflation are extra numerous. Low or moderate inflation can be attributed to fluctuations in actual calls for items and offerings, or adjustments in to-be-had supplies which include all-through scarcities.
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Would workers who formerly worked in agricluture find it easy to obtain jobs in the secondary or tertiary sector of industry? explain your answer
Answers
Because agriculture is the sector that requires the greatest manpower. In the secondary and tertiary sectors, people might find simple labor-related occupations.
Is agriculture seen as a secondary industry?The jobs in the primary sector include mining, forestry, farming, and fishing. The secondary sector includes jobs in manufacturing, which includes the production of steel and vehicles. Tertiary vocations include teaching, finance, and banking, for example.
Why do individuals go from the primary to secondary sector?More products made in factories at low prices started to be used by people. The secondary industry rapidly overtook the primary sector in terms of employment and overall production. Consequently, a change has developed over time. This indicates that the sectors' relative importance had altered.
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suppose you are trying to switch banks or open a brand new credit card. which strategy will likely lead to the worst long-term outcome?
Answers
Look for introductory discounts or sign-up bonuses that will make the product affordable.
How do you use discounts to draw clients in?Discount System
Offer a particular incentive to attract new visitors.Reward dependable customers.improve earnings over the Christmas season.Take Advantage of Savings on New Products.Reduce the quantity of cart abandonments.Reward loyal consumers who bring you new business.Visitor Retargeting with a Custom OfferOffer subscription discounts.How do salespeople convince customers to make purchases?Discounts Have a Hurry Feeling. When discounts are provided, customers are encouraged to purchase more rapidly. This is in part because consumers are aware that, due to the concept of scarcity, there aren't always discounts available to help them save money.
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fill in the blank. Holt Computer Services received $200 from a customer that it had billed earlier in the month. Illustrate how to record the transaction to the T-accounts by completing the following sentences.
Accounts receivable would be ________(debited/credited) on the _____________(left/right) side of the T-account, and Cash would be ___________(debited/credited) on the __________(left/right) side of the T-account.
Answers
Accounts receivable would be credited on the right side of the T-account, and Cash would be debited on the left side of the T-account.
Cash would be deducted from the T-left account's side, while Accounts Receivable would be credited to the right side. This is because when a company receives payment from a customer, the company's accounts receivable account is decreased (credited) and the company's cash account is increased (debited).
The T-account is a visual representation of a company's accounts, with the left side representing debits and the right side representing credits. Therefore, the transaction would be recorded as a credit to accounts receivable on the right side of the T-account and a debit to cash on the left side of the T-account.
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The Government of Country Y owns and controls many businesses. "The public sector always produces goods and services more efficiently than privately owned businesses', a Government minister recently said. Other ministers disagree and want to privatize many state-owned businesses. The private sector businesses in Country Y produce 55 per cent of total output - mainly in services such as transport, tourism and finance. The secondary sector of industry produces 35 per cent of total output.
Answers
Answer:
what do i have to answer?
Explanation:
If you purchase one coca-cola’s corporate bonds with a par value of $1000, and a coupon (interest rate) of 2.5% per year for 10 years; how much interest will you receive each year?
Answers
Answer:
$26000
Explanation:
P*(1+r*t)=
1000*(1+2.5 *10)=26000
Suppose that you are considering investing in a 4-year bond that has a face value of $1,000 and a coupon rate of 5.7% a) If the market interest rate on similar bonds is 5.7%, the price of the bond is $1,000 (Round your response to the nearest cent) The bond's current yield is 57 % (Round your response to two decimal places) b.) Suppose that you purchase the bond, and the next day the market interest rate on similar bonds falls to 4.7% The price of the bond will be $1035.71 (Round your response to the nearest cent) The current yield will be 5.5% (Round your response to two decimal places) c) Now suppose that 1 year has gone by since you bought the bond, and you have received the first coupon payment. The market interest rate on similar bonds is still 47% At an interest rate of 4.7%, the price an investor is willing to pay for the bond is $ ___ (Round your response to the nearest cent)
Answers
If the market interest rate on similar bonds is 5.7%, the price of the bond will be equal to its face value because the coupon rate is equal to the market interest rate
a) If the market interest rate on similar bonds is 5.7%, the price of the bond will be equal to its face value because the coupon rate is equal to the market interest rate:
Price of bond = $1,000
The bond's current yield is equal to its annual coupon payment divided by its price, expressed as a percentage:
Current yield = (Annual coupon payment / Price of bond) x 100%
Current yield = ($57 / $1,000) x 100%
Current yield = 5.7%
b) If the market interest rate on similar bonds falls to 4.7%, the price of the bond can be calculated using the following formula:
Price of bond = [C / r] x [1 - 1 / (1 + r)^n] + FV / (1 + r)^n
Where:
C = Annual coupon payment = $57
r = Market interest rate = 4.7%
n = Number of periods = 4
FV = Face value = $1,000
Price of bond = [$57 / 0.047] x [1 - 1 / (1 + 0.047)^4] + $1,000 / (1 + 0.047)^4
Price of bond = $1,035.71
The current yield can be calculated using the same formula as in part (a):
Current yield = (Annual coupon payment / Price of bond) x 100%
Current yield = ($57 / $1,035.71) x 100%
Current yield = 5.5%
c) If one year has gone by and the market interest rate on similar bonds is still 4.7%, the price an investor is willing to pay for the bond can be calculated as follows:
Price of bond = [C / r] x [1 - 1 / (1 + r)^n] + FV / (1 + r)^n
Where:
C = Annual coupon payment = $57
r = Market interest rate = 4.7%
n = Number of periods remaining = 3 (since one year has gone by out of the total of four years)
FV = Face value = $1,000
Price of bond = [$57 / 0.047] x [1 - 1 / (1 + 0.047)^3] + $1,000 / (1 + 0.047)^3
Price of bond = $1,077.22 (rounded to the nearest cent)
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This activity is important because it covers important terms for effective money management. The goal of this exercise is to identify the best ways to manage your personal finances. Complete each statement with the correct term. Note not all terms will be used.
Answers
Remainder Part of the Question:
Build Your Financial Base Terms:
The ______ is one of the best places to put your money.
A _______ is one of the worst places to keep long-term investments.
You can use a _______ to keep track of purchases.
Your _______ is likely to be the largest of the most important investments you make.
It is wise to plan your financial future with _______.
Available Options are:
Credit Card, Bank Account, Home, Uncertainity, Excitement, car, insurance, stock market, payday loan.
Answers:
A. Stock market
B. Bank Account
C. Credit Card
D. Home
E. Insurance
Explanation:
A. The Stock Market is one of the best places to put your money.
Stock markets are the source of raising funds for investments by the companies. The stock market helps the investor to choose the investment with appropriate returns and risks. Furthermore the investor can also diversify its return by managing the portfolio of investments.
B. A Bank Account is one of the worst places to keep long term investment
The lowest returns are on saving accounts hence it is the worst place for long term investments.
C. You can use Credit Card to keep a track of your purchases.
Credit cards can be used for tracking all of purchases because monthly statement mailed to you includes all the spendings during the year.
D. Your Home is likely to be the largest of the most important investments you make
Buying home is considered as one of the largest investments as it takes substantial savings of the person to buy an house. A roughly estimate would be the savings of 3-4 years for a small house for a couple.
E. It is wise to plan your financial future with Insurance.
Because Insurance helps you to lower your financial risks. The risk is associated with life, home, car, and physical assets and thus the investor must use insurance facility.
a bond issue with a face amount of $492,000 bears interest at the rate of 10%. the current market rate of interest is also 10%. these bonds will sell at a price that is:
Answers
The bonds will sell at par value. This means that their face value ($492,000) is equal to the market price.
What is market price?Market price is the price at which a product or service is available in the market. It is the price that is determined by supply and demand of the product or service, and is usually determined by competition among sellers. Market price reflects the ratio of supply and demand of a product, and is the price at which a willing buyer and willing seller will transact in the market. Market price is different from the prices of goods and services that are printed on tags or advertised. As the market is constantly changing, the market price of a product or service may change over time and is subject to change based on external factors.
This is because the interest rate on the bond (10%) is equal to the current market rate of interest (10%). If the interest rate on the bond was lower than the market rate, the bonds would sell at a premium, and if the interest rate on the bond was higher than the market rate, the bonds would sell at a discount.
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Internet privacy has become a major issue. In fact, in Europe there are privacy laws to limit how much information websites can collect from users without their permission. The United States does not have comparable laws to protect consumer privacy on the Internet. Collecting this information is beneficial for firms because then they can tailor marketing messages that better fit its users' needs. These better marketing campaigns can provide them with a competitive advantage. Acme Corporation uses cookies and other devices to collect information. Its privacy policy explicitly informs users that it collects information. However, most people do not read through the policy. Lately, some consumers have complained because they are worried that their information could be compromised. They question the security of the site. Acme wants to restore confidence and prove that it has controls in place. Refer to Scenario 3.2. What type of environmental force does this issue involve?
Answers
a. Greyhound bus system
3) What do you think about the initiatives/products Uberdeveloped in China?
Answers
Uber entered the Chinese market in 2013 and faced intense competition from local ride-sharing platforms, such as Didi Chuxing.
To remain competitive, Uber introduced a range of initiatives and products, including UberPOOL, UberCommute, and UberEATS.
UberPOOL allowed passengers traveling in the same direction to share a ride and split the cost, while UberCommute enabled drivers to pick up passengers on their way to work or home. UberEATS provided food delivery services in select cities. Despite these efforts, Uber struggled to gain market share in China and eventually sold its operations to Didi Chuxing in 2016.In my analysis, Uber's initiatives and products in China can be considered innovative and strategic. They developed localized services such as UberChina, which aimed to cater to the specific needs of the Chinese market. They also introduced various payment options to make transactions convenient for local users, including Alipay and WeChat Pay integration.Furthermore, Uber focused on forming partnerships with local companies, which helped them better understand the market dynamics and enhance their services. This was evident in their collaboration with Guangzhou Automobile Group to provide car leasing options.However, despite these efforts, Uber faced intense competition from local rivals like Didi Chuxing, ultimately leading to Uber selling its China operations to Didi in 2016.In conclusion, Uber's initiatives and products in China demonstrated adaptability and an understanding of the local market, but intense competition and other factors made it difficult for them to establish a dominant presence.
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Which of the following choices incur speculative risk?
a.stocks
b.fire insurance on a house
c.options
d.life insurance
e.high interest savings account
Answers
Answer: correct option is A.
Explanation: A speculative risk can be defined as risk that is taken willingly either it results in profit or loss and the stocks involve in probability of gain and loss making it a speculative risk.
Stocks incur speculative risk. Therefore option A is correct.
What are Stocks?A stock usually referred to as equity, is a type of investment that denotes ownership in a portion of the issuing company. Shares, also known as units of stock, entitle their owners to a share of the company's assets and income in proportion to the number of shares they possess.
Common stock and preferred stock are the two primary categories of stocks.
Owners of common stock are entitled to dividends and the right to vote at shareholder meetings.
Common stockholders often do not have voting rights, while preferred stockholders typically get dividend payments ahead of time and are given preference over common investors in the event of a firm bankruptcy and asset liquidation.
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Who are the majority of businesses in resort towns targeted to?
O
seniors
O
tourists
O
employees
investors
Answers
The majority of businesses in resort towns target tourists.
Who is the luxury hotel industry's target customer?As you can see, a wide range of people from across all walks of life who are prepared to pay a little extra for the luxury hotel experience makes up the target audience for luxury hotels.
What advantages come from forming and focusing on prospect groups?Overall, specialization is the main advantage of identifying and pursuing niche markets. Finding more wealthy guests who will gush about your hotel will be easier if you can be more precise with your market segmentation.
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Four year universities are the only type of school worth attending. True False
Answers
Answer:
false
Explanation:
Answer:
false
Explanation:
there are a number of other reliable schooling options
Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 10 billion cases of beer were sold every year at a price of $7 per case. After the tax, 5 billion cases of beer are sold every year; consumers pay $9 per case (including the tax), and producers receive $6 per case.
a. The amount of the tax on a case of beer is ($_____) per case. Of this amount, the burden that falls on consumers is ($_____) per case, and the burden that falls on producers is ($_____) per case.
b. (True or False) The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers.
Answers
Answer:
$3
$2
$1
false
Explanation:
Tax is a compulsory sum levied by the government on goods and services. it increases the price of the good
Tax on a case of beer = amount consumers pay after the tax has been levied - amount producers receive = $9 - $6 = $3
Burden on consumers = amount consumers pay after the tax has been levied on the cases of beer - amount consumers pay before tax was levied on cases of beer = $9 - $7 = $2
Burden on producers = Tax on a case of beer - Burden on consumers = $3 - $2 = $1
false. producers are already being taxed
A weakness in internal control over recording retirements of equipment may cause an internal auditor to:
Answers
An internal auditor may face financial statement inconsistencies, fraud or misappropriation concerns, and asset management efficiency issues if equipment retirements are not recorded properly.
A weakness in internal control over recording retirements of equipment can have various implications for an internal auditor. Specifically, it can create several challenges and potential risks.
Firstly, Financial statements may be inaccurate if internal control over equipment retirements is insufficient. This may compromise financial reporting. Internal auditors verify financial data is accurate, full, and compliant with accounting rules. Thus, detecting and fixing such vulnerabilities is essential to financial reporting quality.
Secondly, Fraud or asset misappropriation may also result from a lack of internal control over equipment retirements. Employees can steal assets by misrecording retirements. Internal auditors must watch for fraud and create safeguards to prevent it.
Additionally, Internal audits may be hampered by internal control weaknesses. Recording equipment retirements accurately helps assess asset utilization and make educated equipment replacement or disposal decisions.
Overall, a weakness in internal control over recording retirements of equipment can significantly impact the internal auditor's ability to ensure accurate financial reporting, detect fraud, and assess the efficiency of asset management. Therefore, it is important for the internal auditor to identify and address such weaknesses to mitigate potential risks and improve the overall control environment.
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A budget that reports expected cash receipts and cash payments related to the sale and purchase of plant assets is called a: Multiple Choice Cash budget. Capital expenditures budget. Rolling budget. Sales budget. Production budget.
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A budget that reports expected cash receipts and cash payments related to the sale and purchase of plant assets is called Capital expenditures budget
Capital expenditures budget shows the cash amounts estimated to be used up for the purchase of additional plant assets or expected from the sale of plant asset. Most Capital expenditures are usually for huge projects or for long term assets.After a financial evaluation to estimate if a company's return on investment targets are met, The Capital expenditure budget can then be reviewed to see what project to be done.Learn more here:https://brainly.com/question/15683430