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¥ Question Completion Status: T NCT 1CTOL. MNOOCTOJIITICITHIU T Test Information Description Instructions Multiple Attempts Force Completion This is the third of five online assessments you will receive during this course. As outlined in the course syllabus, the score you receive on this assessment will account for 7% of your final grade. This Third Assessment consists of 25 multiple choice questions and draws from material that we discussed during Weeks 5 and 6 of lecture. This assessment primarily focuses on Chapter 10 ("Capital Markets and the Pricing of Risk") and selected topics From Chapter 11 ("Optimal Portfolio Choice and the Capital Asset Pricing Model"), specifically: - 11.1 - The Expected Return of a Portfolio - 11.2 - The Volatility of a Two-Stock Portfolio Good luck! Please complete and submit the Third Assessment by 11:59 pm Eastern on Friday February 23, 2024. Assessment grading and feedback will be made available to all students after the due date has passed. Not allowed. This test can only be taken once. This test can be saved and resumed later. Your answers are saved automatically. QUESTION 1 1 points Saved Common risk is also called: O firm-specific risk. @® market risk. O independent risk. O diversifiable risk. QUESTION 2 1 points Saved Suppose that KAN's beta is 1.5. If the market risk premium is 8% and the risk- free interest rate is 4%, then the expected return for KAN stock is? O 13.5% O 8.0% @® 16.0% O 10.0%
(J $9Y5,000,0U0U. Use the following information to answer the problem(s) below. Consider two banks. Bank A has 1000 loans outstanding each for $100,000, that it expects to be fully repaid today. Each of Bank A's loans have a 6% probability of default, in which case the bank will receive $0 for each of the defaulting loans. Bank B has 100 loans of $1 million outstanding, which it also expects to be fully repaid today. Each of Bank B's loans have a 5% probability of default, in which case the bank will receive $0 for each of the defaulting loans. The chance of default is independent across all the loans. The expected overall payoff to Bank A is: @® $94,000,000. O $6,000,000. (O $5,000,000. QUESTION 4 1 points Use the following information to answer the question(s) below. Company | Ticker | Beta Ford Motor Company | F | 277 International Business Machines| IBM | 0.73 Merck | MRK | 0.90 If the market risk premium is 6% and the risk-free rate is 4%, then the expected return of investing in Ford Motor Company is closest to: O 10.0%. O 17.1%. @® 20.6%. O 16.2%. QUESTION 5 1 points Use the following information to answer the question(s) below. Company | Ticker | Beta Ford Motor Company | F | 277 International Business Machines| I1BM | 0.73 Merck | MRK | 0.90 If the expected return on the market is 11% and the risk-free rate is 4%, then the expected return of investing in IBM is closest to: O 11.0%. O 10.3%. ® 9.1%. O 12.0%. QUESTION 6 1 points Use the following information to answer the question(s) below. Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%. Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down. Security "Y" goes down Sy A~~~y 1 a1l T Y B B N S a1 o 1 1 Saved Saved Saved
The beta for security "X" is closest to: O 1.00. O 0.80. @® 1.25. O o. QUESTION 7 1 points Use the following information to answer the question(s) below. Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%. Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down. Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down. Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down. The beta for security "Z" is closest to: O 0.25. O -1.00. O -0.25. @ 0.00. QUESTION 8 1 points Use the following information to answer the question(s) below. Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%. Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down. Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down. Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down. The risk-free rate is closest to: @® 4%. O 16%. O 0%. O 8%. QUESTION 9 1 points Use the information for the question(s) below. Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster” drug before the Food and Drug Administration (FDA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has 10 separate less important drugs before the FDA waiting for approval. If approved, each of Little Cure's drugs would produce $100 million in net income for Little Cure. The probability of the FDA approving a drug is 50%. Saved Saved Saved
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(&4 O $25 million. @® $16 million. (O $500 million. O $50 million. QUESTION 10 1 points Use the information for the question(s) below. Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes Companies, Inc. (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share. Suppose over the next year Ball Corporation has a return of 12.5%, Lowes Companies has a return of 20%, and Abbott Labs has a return of -10%. The return on your portfolio over the year is: O 5.0%. O 0%. O 7.5%. @® 3.5%. QUEST'ON 11 1 points Use the table for the question(s) below. Consider the following average annual returns: Investment Average Return Small Stocks 23.2% S&P 500 13.2% Corporate Bonds 7.5% Treasury Bonds 6.2% Treasury Bills 4.8% What is the excess return for Treasury Bills? ® 0% O -8.4% O -1.4% O -2.7% QUESTION 12 1 points Use the table for the question(s) below. Consider the following realized annual returns: Index Stock A Year End Realized Realized Return Return 2000 23.6% 46.3% 2001 24.7% 26.7% 2002 30.5% 86.9% 2003 9.0% 23.1% "70NAN _ N0/ N D04 Saved Saved Saved
2007 32.2% 27.9% 2008 4.4% -5.1% 2009 7.4% -11.3% Suppose that you want to use the 10-year historical average return on the Index to forecast the expected future return on the Index. The standard error of your estimate of the expected return is closest to: O 1.95%. O 19.4%. ® 6.2%. O 3.8%. QUESTION 13 Use the table for the question(s) below. Consider the following realized annual returns: Index Stock A Year End Realized Realized Return Return 2000 23.6% 46.3% 2001 24.7% 26.7% 2002 30.5% 86.9% 2003 9.0% 23.1% 2004 -2.0% 0.2% 2005 -17.3% -3.2% 2006 -24.3% -27.0% 2007 32.2% 27.9% 2008 4.4% -5.1% 2009 7.4% -11.3% Suppose that you want to use the 10-year historical average return on the Index to forecast the expected future return on the Index. The 95% confidence interval for your estimate of the expect return is closest to: O 4.9% to 12.7%. O -9.6% to 27.3%. O 6.8% to 10.7%. @® -3.5% to 21.1%. QUESTION 14 Use the table for the question(s) below. Consider the following returns: Stock X Stock Y Stock Z Year End Realized Realized Realized Return Return Return 2004 20.1% -14.6% 0.2% 2005 72.7% 4.3% -3.2% 2006 -25.7% -58.1% -27.0% 2007 56.9% 71.1% 27.9% 2008 6.7% 17.3% -5.1% 2009 17.9% 0.9% -11.3% The covariance between Stock X's and Stock Y's returns is closest to: N\ N ro 1 points 1 points Saved Saved
QUESTION 15 1 points Use the table for the question(s) below. Consider the following returns: Stock X Stock Y Stock Z Year End Realized Realized Realized Return Return Return 2004 20.1% -14.6% 0.2% 2005 72.7% 4.3% -3.2% 2006 -25.7% -58.1% -27.0% 2007 56.9% 71.1% 27.9% 2008 6.7% 17.3% -5.1% 2009 17.9% 0.9% -11.3% The Volatility on Stock Y's returns is closest to: O 35%. O 42%. O 31%. ® 18%. QUESTION 16 1 points Which of the following investments offered the highest overall return over the past ninety-two years? (O S&P 500 @® Small stocks (O Treasury Bills (O Corporate bonds QUEST'ON 17 1 points Which of the following is NOT a diversifiable risk? (O The risk of a product liability lawsuit (O The risk of a key employee being hired away by a competitor (O The risk that the CEO is killed in a plane crash @® The risk that oil prices rise, increasing production costs QUEST'ON 18 1 points Which of the following is NOT a systematic risk? @ The risk that your new product will not receive regulatory approval (O The risk that oil prices rise, increasing production costs (O The risk that the economy slows, reducing demand for your firm's products (O The risk that the Federal Reserve raises interest rates Saved Saved Saved Saved
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QUESTION 19 Which of the following statements is FALSE? (O Two common measures of the risk of a probability distribution are its variance and standard deviation. @ If the return is riskless and never deviates from its mean, the variance is equal to one. (O The variance increases with the magnitude of the deviations from the mean. (O The variance is the expected squared deviation from the mean. QUESTION 20 Which of the following statements is FALSE? (O When an investment is risky, there are different returns it may earn. (O The expected or mean return is calculated as a weighted average of the possible returns, where the weights correspond to the probabilities. (O The variance is a measure of how "spread out" the distribution of the return is. @ In finance, the variance of a return is also referred to as its volatility. QUESTION 21 Which of the following statements is FALSE? (O Portfolios with higher volatility have historically rewarded investors with higher average returns. @ Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the returns of individual securities. (O Riskier investments must offer investors higher average returns to compensate them for the extra risk they are taking on. O Investments with higher volatility should have a higher risk premium and therefore higher returns. QUESTION 22 Which of the following statements is FALSE? (O Firm-specific news is good or bad news about the company itself. (O Firms are affected by both systematic and firm-specific risk. (O When firms carry both types of risk, only the firm-specific risk will be diversified when we combine many firms' stocks into a portfolio. @ The risk premium for a stock is affected by its idiosyncratic risk. QUESTION 23 Which of the following statements is FALSE? @® Because the risk that determines expected returns is unsystematic risk, which is measured by beta, the cost of capital for an investment is the expected return available on securities with the same beta. N Tha Cramidal Acentr Dririmea MaAaAdAl ic +lhAa maAact irmmardbamt: mantblh A €4 - 1 points 1 points 1 points 1 points 1 points Saved Saved Saved Saved Saved
(O To determine a project's cost of capital we need to estimate its beta. QUESTION 24 1 points Saved Which of the following statements is FALSE? @® Without trading, the portfolio weights will decrease for the stocks in the portfolio whose returns are above the overall portfolio return. (O A portfolio weight is the fraction of the total investment in the portfolio held in an individual investment in the portfolio. (O The expected return of a portfolio is simply the weighted average of the expected returns of the investments within the portfolio. O Portfolio weights add up to 1 so that they represent the way we have divided our money between the different individual investments in the portfolio. QUESTION 25 1 points Saved Which of the following types of risk doesn't belong? O ldiosyncratic risk @® Market risk (O Firm-specific risk O Unique risk Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit
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Question 1
What is the Payback Period for the following investment?
Year
1
2
3
4
5
O a. 3.77
Ob. 3.73
Oc. 3.89
Od. 3.96
Cash Out
$ (1,600,000)
(710,000)
Cash In
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640,000
670,000
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900
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There are two research cases in this assignment. This assignment must be completed by 9:00 a.m. Monday, November 8, 2021. You will submit your answer directly on D2L. You may submit your response in either of the following ways: 1) following the link for the extra credit assignment under Submissions in this week’s content or 2) alternatively, you may follow the link at the top of D2L to Research and Exams. Select Research Assignment #5. (Don’t worry that D2L calls this submission a quiz).
You will enter the Topic, Subtopic, Section, Paragraph in a fill in the blank question and your overall conclusion to this case. Example: ASC 100-10-45-4 (you do not need to enter what the guidance content)
Research Case #1:
Peronto’s Inc. is an asphalt contractor located in Kansas City, Mo. Peronto’s Inc. is planning on expanding into the Chicago market is budgeting that the start-up expenditures for the new Chicago facilities will be $25,000. These expenditures will be for the…
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Course Messages Forums Calendar | Gradebook
Home > Math 173-4 Spring 2024> Assessment
Quiz 2 (Sec. 1.5-1.7)
54 points possible 5/12 answered
Question 6
The graph of the function
y = f(x - 39)
can be obtained from the graph of
y = f(x)
by one of the following actions:
> Next Question
Home | My
Oshifting the graph of f(x) to the right 39 units
shifting the graph of f(x) to the left 39 units
shifting the graph of f(x) upwards 39 units
shifting the graph of f(x) downwards 39 units
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experience during your exam
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Question 2
«Question 2 of 10
Goremann Corp (GC) has a total market value of $524 million. The market value of equity is $300 million and the company carries debt valued at $224 million. The before-tax cost of debt is 9
percent and the cost of equity is estimated at 14 percent. The statutory company tax rate is 35 percent. What is the weighted-average cost of capital for the company closest to?
O A. 9.34%.
O B. 10.52%.
3 points
Save Answer
O C. 11.63%.
O D. 12.05%.
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S Math Models B
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Cont
↑ Cour
v Unit
Target due: 1/14/21 58.33%
7) Choose the best answer.
What is the gross annual pay for Saul if he works 40 hours each week but also works
4 hours of overtime every two weeks? (Saul makes $27.35 an hour and gets time and
a half for overtime.)
$61,154.60
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Caleb has worked hard and is offered a salaried position with the same company. He
is offered $28,000, but will be expected to work 44 hours per week with no overtime
pay. How much would he be paid per year if he remained in his present job and
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us.wvu.edu/webapps/assessment/take/launch.jsp?course_assessment_id=_349525_1&course_id=_172235_1&content_id= 91004 Musketeers
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Florist Grump, Inc., had beginning retained earnings of $137,000. During the year, Florist Grump had net income of $63,000 and declared
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QUESTION 9
For the year ended December 31, Year 2
For the year ended December 31, Year 1
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$ 7,500
$ 500
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1,500
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December 31, Year 1
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$ 1,000
500
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300
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200
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Compute a final numerical answer for each of the following problems. Youshould work out your solutions on loose leaf paper in an organized manner so that when I post the solutionkey, you can determine why answers that you missed were incorrect. This will allow you to LEARN fromany mistakes so you to not repeat these on the Final Exam (which is worth 35% of your grade in this class).Unless instructed otherwise on a question, round all dollar answers to 2 decimal places, record IRR valuesas a percent rounded to 2 decimal places, round payback period or profitability index values to 1 decimalplace, and record WACC values as a percent rounded to 2 decimal places.USE THE TABLE BELOW TO ANSWER THE FOLLOWING THREE (3) QUESTIONSYear Project A Cash Flows ($s) Project B Cash Flows ($s) Project C Cash Flows ($s)0 -100,000 -700,000 -2,350,0001 25,000 180,000 2,500,0002 20,000 150,000 2,500,0003 30,000 190,000 2,500,0004 25,000 140,0005 25,000 140,0006 20,000The payback period for Project A is…
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CUMULATIVE COMPREHENSION PROBLEM: ECHO SYSTEMS (This comprehensive problem was introduced in Chapter 2 and continues in Chapters 4 and 5. If the Chapter 2 segment has not been completed, the assignment can begin at this point. You need to use the facts presented in Chapter 2. Because of its length, this problem is most easily solved if you use the Working Papers that accompany this book.) After the success of of its first two months,Mary Graham has decided to continue operatine Echo Systems. (The that occurred in these months are described in Chapter 2.) Before proceeding in December, Gra- e new accounts to the chart of accounts for the ledger: hamadds these ne No. 105 210 Account Accumulated Depreciation Office Equipment ... Accumulated Depreciation, Computer Equipment ............ Wages Payable...... Uneamed Computer Services Revenue..... Depreciation Expense, orice Equipment............. Depreciation Expense. Computer Equipment........... Insurance Expense Rent Expense Computer…
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3) Choose the best answer.
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and a half for each hour over 40 that she works in a week. She is paid biweekly. What
is her gross pay for a paycheck where she worked 40 hours in each of the two weeks
for a total of 80 hours?
$2,215.35
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$3,283.00
$2,188.00
O $1,641.00
4) Choose the best answer.
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K.J. Lee, CFA, an analyst with
Water's Edge
Securities, estimates the
market risk premium is 6.80%
and the risk-free rate is
2.10%. She's calculated the
beta for Summerfield Tech as
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expected return is:
O Type here to search
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Please correct answer and don't use hend raiting
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os.schoolsplp.com/enrollments/156569804/items/YUI32/work?prev3LNSDS
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Next Activity >
els B: Lesson 1 - Salary
Target due: 1/14/21 58.33%
$344.75
$700
2) Choose the best answer.
Caleb has a job that pays $11.15 per hour for a 40-hour work week. He is paid time
and a half for every hour over 40 that he works in a week. What will his gross pay be
for a week in which he works 46 hours?
NTT
$546.35
$446
$512.90
$256.45
$769.35
O O O
O O
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Course: Intro Fin Acc- Bus 28
WileyPLUS
Exercise 9-5 (Part Level Submission)
Math Problem Solver and Caiculator
Print by: 13111810287 Vera Maria Fonda
50077495-50077495MJNV1W09_C:Intro Fin Acc - Bus 28 / Chapter 9a
*Exercise 9-5 (Part Level Submission)
Windsor Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of R$245,210. Over its 7-year useful life, the bus is expected to be
driven 170,600 miles. Residual value is expected to be R$14,900.
V Your answer is correct.
Compute the depreciable cost per unit. (Round answer to 2 decimal places, e.g. e.50.)
Depreciation cost per unit
RSL.35
per mile
Attempts: 1 of 2 used
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1181
*(b)
Prepare a depreciation schedule assuming actual mileage was 2017, 42,900; 2018, 49,500; 2019, 42,300; and 2020, 35,900. (Round answers to o decimal places, e.g. 2,125 except Depreciation
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reen Sh
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- Hey I was wondering if I can get help with this thank youarrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forwardabout:blank Blackboard Learn sc.edu/webapps/assessment/take/launch isp?course assessment_id=_114 Remaining Time: 1 hour, 23 minutes, 35 seconds. Question Completion Status: A Moving to the next question prevents changes to this answer. Question 1 What is the Payback Period for the following investment? Year 1 2 3 4 5 O a. 3.77 Ob. 3.73 Oc. 3.89 Od. 3.96 Cash Out $ (1,600,000) (710,000) Cash In 550,000 580,000 610,000 640,000 670,000 A Moving to the next question prevents changes to this answer. 000 900 F2 F3 F4 MacBookarrow_forward
- hre.7arrow_forwardThere are two research cases in this assignment. This assignment must be completed by 9:00 a.m. Monday, November 8, 2021. You will submit your answer directly on D2L. You may submit your response in either of the following ways: 1) following the link for the extra credit assignment under Submissions in this week’s content or 2) alternatively, you may follow the link at the top of D2L to Research and Exams. Select Research Assignment #5. (Don’t worry that D2L calls this submission a quiz). You will enter the Topic, Subtopic, Section, Paragraph in a fill in the blank question and your overall conclusion to this case. Example: ASC 100-10-45-4 (you do not need to enter what the guidance content) Research Case #1: Peronto’s Inc. is an asphalt contractor located in Kansas City, Mo. Peronto’s Inc. is planning on expanding into the Chicago market is budgeting that the start-up expenditures for the new Chicago facilities will be $25,000. These expenditures will be for the…arrow_forwardmyOpenMath Course Messages Forums Calendar | Gradebook Home > Math 173-4 Spring 2024> Assessment Quiz 2 (Sec. 1.5-1.7) 54 points possible 5/12 answered Question 6 The graph of the function y = f(x - 39) can be obtained from the graph of y = f(x) by one of the following actions: > Next Question Home | My Oshifting the graph of f(x) to the right 39 units shifting the graph of f(x) to the left 39 units shifting the graph of f(x) upwards 39 units shifting the graph of f(x) downwards 39 unitsarrow_forward
- Click to watch the Tell Me More Learning Objective 1 video and then answer the questions below.arrow_forwardexperience during your exam m. You will be given an additional ten minute submission window to allow you submit your exam to mitigate for any tecce 5sues you m Click Save and Submit once you have completed the exam. Itiple empts Not allowed. This Test can only be taken once. rce mpletion This Test can be saved and resumed later. Your answers are saved automatically. Question Completion Status: Close Window A Moving to another question will save this response. Question 2 «Question 2 of 10 Goremann Corp (GC) has a total market value of $524 million. The market value of equity is $300 million and the company carries debt valued at $224 million. The before-tax cost of debt is 9 percent and the cost of equity is estimated at 14 percent. The statutory company tax rate is 35 percent. What is the weighted-average cost of capital for the company closest to? O A. 9.34%. O B. 10.52%. 3 points Save Answer O C. 11.63%. O D. 12.05%. A Moving to another question will save this response. Question 2 of…arrow_forwardquestion a) answer can only be input or output Thank youarrow_forward
- S Math Models B A wbbroncos.schoolsplp.com/enrollments/156569804/items/YU132/work?prev=LNSDS Classes * Western Brown Loc. A Planner - ProgressB. S Desmos | Graphing. A ALEKS - Gracie Glov. M My Classes | McGra. Gracie Glover Math Models B: Lesson 1 - Salary Next Activity > Cont ↑ Cour v Unit Target due: 1/14/21 58.33% 7) Choose the best answer. What is the gross annual pay for Saul if he works 40 hours each week but also works 4 hours of overtime every two weeks? (Saul makes $27.35 an hour and gets time and a half for overtime.) $61,154.60 O $57,052.10 NIT AM O $4,266.60 OH uis $65.421.20 O $56,888 O D 8) Choose the best answer. Caleb has worked hard and is offered a salaried position with the same company. He is offered $28,000, but will be expected to work 44 hours per week with no overtime pay. How much would he be paid per year if he remained in his present job andarrow_forwardus.wvu.edu/webapps/assessment/take/launch.jsp?course_assessment_id=_349525_1&course_id=_172235_1&content_id= 91004 Musketeers worldhiston H Blackboard M WVU Gmail a Discord Complete History... m HBO Max N Netflix A ALEKS- Musketeers Excel Email am and sieges v Question Completion Status: Florist Grump, Inc., had beginning retained earnings of $137,000. During the year, Florist Grump had net income of $63,000 and declared and paid dividends of $18,000. What will be shown for ending retained earnings on Florist Grump's year-end balance sheet? QUESTION 9 For the year ended December 31, Year 2 For the year ended December 31, Year 1 Revenues $ 7,500 $ 500 Expenses 1,500 Net Income December 31, Year 2 December 31, Year 1 Assets $ 16,500 $ 1,000 500 Liabilities Stock 300 300 Retained Earnings 1.$ 200 Assume Year1 is the company's first year of business and there were $100 dividends in Year 1 and $100 dividends in Year 2. After determining the missing amounts ($ Earnings 1.$ in the above…arrow_forwardCompute a final numerical answer for each of the following problems. Youshould work out your solutions on loose leaf paper in an organized manner so that when I post the solutionkey, you can determine why answers that you missed were incorrect. This will allow you to LEARN fromany mistakes so you to not repeat these on the Final Exam (which is worth 35% of your grade in this class).Unless instructed otherwise on a question, round all dollar answers to 2 decimal places, record IRR valuesas a percent rounded to 2 decimal places, round payback period or profitability index values to 1 decimalplace, and record WACC values as a percent rounded to 2 decimal places.USE THE TABLE BELOW TO ANSWER THE FOLLOWING THREE (3) QUESTIONSYear Project A Cash Flows ($s) Project B Cash Flows ($s) Project C Cash Flows ($s)0 -100,000 -700,000 -2,350,0001 25,000 180,000 2,500,0002 20,000 150,000 2,500,0003 30,000 190,000 2,500,0004 25,000 140,0005 25,000 140,0006 20,000The payback period for Project A is…arrow_forward
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