You sell short 600 shares of Microsoft that are currently selling at $25 per share. You post the 40% margin required on the short sale. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Microsoft is selling at $24? (Ignore any dividends.) Multiple Choice 10.00% 7.50% 17.50% 5.00%

Answers

Answer 1
Answer:

Answer:

10.00%

Explanation:

Calculation for what will be your rate of return after 1 year if Microsoft is selling at $24

Using this formula

Rate of return = (Current price - Initial price ) /Current price *margin

Let plug in the formula

Rate of return=($25 per share-$24)/$25 per share*0.40

Rate of return=$1/10

Rate of return=0.1*100

Rate of return=10.00%

Therefore what will be your rate of return after 1 year if Microsoft is selling at $24 is 10.00%

Answer 2
Answer:

Final answer:

In this short sale, the initial selling price of the shares was $15,000. A 40% margin was posted, amounting to $6,000. After the price dropped to $24 per share, the shares were bought back for $14,400. The profit gained, which is $600, is divided by the initial investment to obtain a rate of return of 10%.

Explanation:

In a short sale, the initial transaction involves selling a borrowed stock in the hopes of buying it back later at a lower price to earn a profit. The rate of return in a short sale is calculated using the profit earned from the short sale divided by the amount of capital invested originally.

First, we need to calculate how much the total value of the shares was at the time of selling short, so that’s 600 shares × $25/share = $15,000. You posted a 40% margin for the short sale, which means you committed $6,000 (40% of $15,000).

After one year, the Microsoft stock drops to $24 per share. At that price, you can buy back all 600 shares for 600 shares × $24/share = $14,400. The difference between the amount you sold the shares for and what you bought them back at is $15,000 - $14,400 = $600.

Now to calculate the rate of return, take the profit ($600) and divide by the amount of capital originally committed to the transaction ($6,000), so the rate of return is $600 / $6,000 = 0.10 or 10%.

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Answers

Answer:

-$1,800

Explanation:

Given that

Tax liability = $1,700

Prepayment made = $1,500

Child tax credit = $2,000

The computation of tax refund is given below:-

= Tax liability - (Prepayment made + Child tax credit)

= $1,700 - ($1,500 + $2,000)

= $1700 - $3500

= -$1,800

Therefore, from the above calculation simply we subtract tax liability from prepayment and child tax credit.

A company reports the following:Sales $1,500,000
Average accounts receivable (net) 100,000
Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year.
a. Accounts receivable turnover.
b. Number of days' sales in receivables. _______ days

Answers

Answer:

a. 15 times

b. 24.3 days

Explanation:

The computations are shown below:

a. Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable

= $1,500,000 ÷ $100,000  

= 15 times

Now the Number of days' sales in receivables would be  

= Total number of days in a year ÷ Accounts receivable turnover ratio  

= 365 days ÷ 15 times

= 24.3 days

A monopolistically competitive firm usually charges more than a perfectly competitive firm because:_____.a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
b. its primary goal is to reap monopoly profits by replacing competition with cooperation.
c. producing homogenous output is more expensive than producing differentiated output.
d. producing differentiated output is more expensive than producing homogenous output.
e. it has a monopoly, but potential entrants exist in the form of contestable markets.

Answers

Answer:

a. it is part of a group of firms that has formally agreed to control the price and the output of a product.

Explanation:

A monopolistic competitive firm ensures that, the price of goods and the output of the products produced by them is controlled. This helps them to dictate the market in which they find themselves in.

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Answers

Answer:

Alternative A has lower incremental revenue but it's lower incremental costs makes the net income higher than of Alternative B.

Explanation:

Alternative A

The net income is computed with the formula as:

Net Income = Incremental Revenue - Incremental Cost

= $160,000 - $100,000

= $60,000

Alternative B

The net income is computed with the formula as:

Net Income = Incremental Revenue - Incremental Cost

= $180,000 - $125,000

= $55,000

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Net income

Alternative A Alternative B Net Income Increase (Decrease)

Revenues $ 160,000 $100,000 $60,000

($160,000-$100,00)

Costs               $180,000 125,000  $55,000

($180,000-$125,000)

Inconclusion Alternative A to Alternative B  net income is: $60,000; $55,000.

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Answers

Answer:

The adjusted tax loss of the group is $11000

Find detailed computation in the attached spreadsheet.

Explanation:

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Answers

Answer:

Mail and online research.

Explanation:

Since in the given situation, it can be seen that the company does not have much amount to be incurred on the research so the best option is to do online research and mail as the person research and the telephone research becomes expensive as compared to the mail and online research

Therefore the above should be the answer

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