Use the Table Below to Answer the Following Questions) The Company Recommends That No More Than $300,000 Be Invested

question 35

Multiple Choice

Use the table below to answer the following questions) .
Qualis Investments is a private limited business that manages personal financial portfolios. The company manages six mutual funds and has a client that has acquired $750,000 from an inheritance. Characteristics of the funds are given in the table below. $\begin{array}{|c|l|c|c|}\hline & \text { Qualis Mutual Fund Data } & & \\\hline & & \begin{array}{c}\text { Expected Annual } \\\text { Return }\end{array} & \text { Risk Measure } \\\hline 1 & \text { Qualis Low-priced Stock Fund } & 7.23 \% & 11.87 \\\hline 2 & \text { Qualis Multinational Fund } & 8.42 \% & 12.62 \\\hline 3 & \text { Qualis Mid-cap Stock Fund } & 6.66 \% & 13.72 \\\hline 4 & \text { Qualis Mortgage Fund } & 2.72 \% & 3.37 \\\hline 5 & \text { Qualis Income Equity Fund } & 8.89 \% & 8.4 \\\hline 6 & \text { Qualis Balanced Fund } & 3.50 \% & 6.91 \\\hline\end{array}$ The company recommends that no more than $300,000 be invested in any individual fund, and that at least $80,000 be invested in each of the mid-cap stock and mortgage fund. The total amount invested in the low-priced and multinational funds are at least 35% of the total investment. The client would like an average return of at least 6%. Assume that X1- X6 represent the dollar amounts invested in funds 1 through 6, respectively.
-Which of the following is the constraint for investment in low-priced and multinational funds?

• A) X1 + X2 \(\ge\) 0.35750,000)
• B) \(\frac { X _ { 1 } + X _ { 2 } } { 750,000 }\) \(\ge\)0.35750,000)
• C) X1 + X2 + X3 + X4 + X5 + X6 \(\ge\) 0.35750,000)
• D) \(\frac { X _ { 1 } + X _ { 2 } } { 750,000 }\) \(\ge\) 0.35

Understand the concepts of cash flows, salvage value, and straight-line depreciation in investment assessment.

Calculate and interpret the accounting rate of return for investment decisions.

Understand and calculate the net present value (NPV) of an investment.

Grasp the importance of the internal rate of return (IRR) and its role in investment decisions.

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Definitions:

Intangible

A quality or attribute that cannot be physically touched or quantified easily, such as reputation or brand value.

Kaizen

A Japanese philosophy emphasizing continuous improvement in all aspects of life, including the workplace, through small and incremental changes.

TQM Managers

Managers who are responsible for implementing Total Quality Management principles, focusing on continuous improvement and customer satisfaction.

Zero Defects

A quality management concept aiming for the reduction and elimination of defects or errors in manufacturing or service processes.