Bed & bath, a retailing company, has two departments—hardware and linens. the company’s most recent monthly contribution format income statement follows: department total hardware linens sales $ 4,250,000 $ 3,180,000 $ 1,070,000 variable expenses 1,311,000 899,000 412,000 contribution margin 2,939,000 2,281,000 658,000 fixed expenses 2,320,000 1,480,000 840,000 net operating income (loss) $ 619,000 $ 801,000 $ (182,000 ) a study indicates that $380,000 of the fixed expenses being charged to linens are sunk costs or allocated costs that will continue even if the linens department is dropped. in addition, the elimination of the linens department will result in a 18% decrease in the sales of the hardware department. required: what is the financial advantage (disadvantage) of discontinuing the linens department?

The total value of your portfolio is $10,000: $3,000 of it is invested in stock a and the remainder invested in stock b. stock a has a beta of 0.8; stock b has a beta of 1.2. the risk premium on the market portfolio is 8%; the risk-free rate is 2%. additional information on stocks a and b is provided below. return in each state state probability of state stock a stock b excellent 15% 15% 5% normal 50% 9% 7% poor 35% -15% 10% what are each stock’s expected return and the standard deviation? what are the expected return and the standard deviation of your portfolio? what is the beta of your portfolio? using capm, what is the expected return on the portfolio? given your answer above, would you buy, sell, or hold the portfolio?

Blank is the internal operation that arranges information resources to support business performance and outcomes

Suppose you win a small lottery and have the choice of two ways to be paid: you can accept the money in a lump sum or in a series of payments over time. if you pick the lump sum, you get $2,950 today. if you pick payments over time, you get three payments: $1,000 today, $1,000 1 year from today, and $1,000 2 years from today. 1) at an interest rate of 6% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 2) at an interest rate of 9% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 3) years after you win the lottery, a friend in another country calls to ask your advice. by wild coincidence, she has just won another lottery with the same payout schemes. she must make a quick decision about whether to collect her money under the lump sum or the payments over time. what is the best advice to give your friend? a) the lump sum is always better. b) the payments over time are always better. c) it will depend on the interest rate; advise her to get a calculator. d) none of these answers is good advice.