Which types of risk can not be avoided by carefully researching a company's business prospects and financial statements?
What will be an ideal response?
Answer: Market risk is the risk that market forces can affect the return of an individual investment. Event risk is the risk that an unforeseeable event may have an immediate, significant effect on an investment's returns. Tax risk is the possibility that tax laws affecting an investment could change. All of these risks are caused by factors external to the company, so they cannot be avoided by researching internal factors. Although not firm related, we could also mention purchasing power risk tied to unanticipated changes in inflation and interest rate risk which could affect stock values.
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Sony offers consumers more than just camcorders; it provides consumers with a complete solution to their picture-taking problems, including additional customer service and product warranties. This offering is called an augmented product
Indicate whether the statement is true or false
Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of
material are transferred, with no reduction in Division A's current sales. How much would Division A's income from operations increase? A) $0 B) $90,000 C) $30,000 D) $60,000
Why might an advertiser prefer an junior poster over a 30-sheet poster?
What will be an ideal response?
Macnamara Corporation has two manufacturing departments-Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: CastingFinishingTotalEstimated total machine-hours (MHs) 1,000 4,000 5,000Estimated total fixed manufacturing overhead cost$4,800$8,800$13,600Estimated variable manufacturing overhead cost/MH$1.80$2.90 During the most recent month, the company started and completed two jobs-Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job FJob MDirect materials$11,500$9,000Direct labor cost$18,400$7,400Casting machine-hours 700 300Finishing machine-hours 1,600 2,400Assume that the company uses departmental predetermined overhead rates with machine-hours as the
allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job M is closest to: (Round your intermediate calculations to 2 decimal places.) A. $45,930 B. $15,310 C. $47,767 D. $30,620