You have saved enough money to pay for your college tuition for the next three years when a high-school friend comes to you with a deal. he is an artist who has spent most of the past two years drawing on the walls of old buildings. the buildings are about to be demolished, and your friend thinks you should buy the walls before the buildings are demolished and open a gallery featuring his work. of course, you are levelheaded and would normally say no. recently, however, your friend has been featured on several local radio and television shows and is talking to some national networks about doing a feature on a well-known news show. to set up the gallery would take all of your savings, but your friend thinks that you will be able to sell his artwork for ten times the cost of your investment. answer the following questions: what information about the business do you need before deciding to invest your savings? what kind of profit split would you suggest to your friend?

Calculate the required rate of return for an asset that has a beta of 1.73, given a risk-free rate of 5.3% and a market return of 9.9%. b. if investors have become more risk-averse due to recent geopolitical events, and the market return rises to 12.7%, what is the required rate of return for the same asset?

If temper company, a manufacturer of mattresses, was considering moving its production facilities to china but decided against it because the additional costs of shipping the mattresses back to the u.s. would offset the cost savings associated with moving the production facilities, the increased costs associated with shipping would be an example ofanswers: learning-curve economies.diseconomies of scale.economies of scale.competitive advantages.

Walsh company manufactures and sells one product. the following information pertains to each of the company’s first two years of operations: variable costs per unit: manufacturing: direct materials $ 25 direct labor $ 12 variable manufacturing overhead $ 5 variable selling and administrative $ 4 fixed costs per year: fixed manufacturing overhead $ 400,000 fixed selling and administrative expenses $ 60,000 during its first year of operations, walsh produced 50,000 units and sold 40,000 units. during its second year of operations, it produced 40,000 units and sold 50,000 units. the selling price of the company’s product is $83 per unit. required: 1. assume the company uses variable costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 2. assume the company uses absorption costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 3. reconcile the difference between variable costing and absorption costing net operating income in year 1.