Answer:
0.6667 ; 0.7778
Explanation:
Given the following :
- - - - - - - - - - - - - - - - - this year - - - - last year
Top rated bond - - - - - 4% - - - - - - - - - 7%
Intermediate grade - - 6% - - - - - - - - - 9%
Confidence Index (This year) :
(Yield on top rated corporate bond / yield on intermediate grade corporate bond)
= 4% / 6% = 0.6667
Confidence index(last year) :
(Yield on top rated corporate bond / yield on intermediate grade corporate bond)
= 7% / 9% = 0.7778
A division of a manufacturing company has a return on investment of 24%. The division has an opportunity to accept a project that is expected to earn a return on investment of 22%. The company’s hurdle rate is 20% which of the following statements is true?
a) A division reports the following figures: Profit margin =20% Investment turnover = 0.5. The division return on investment is
b) If a company has $2,000,000 invested in buildings, equipment, and other assets and desires to earn a return on investment of 30%, the company will need to earn a net income of $ .
Answer:
Return on Investment
The statement that is true is:
b) If a company has $2,000,000 invested in buildings, equipment, and other assets and desires to earn a return on investment of 30%, the company will need to earn a net income of $600,000 (30% of $2,000,000).
Explanation:
The company's Return on Investment is a financial performance measure that calculates the efficiency of the use of investment resources by dividing the returns generated by an investment by the cost of the investment during a period of time. It can be used to evaluate a divisional manager's performance based on the returns generated from the investments made in the division.
Mr. and Mrs. Haley are purchasing beachfront property in an upscale development. The home comes equipped with all furnishings. The Haleys want to get a mortgage that will cover the purchase price plus all the furnishings. What kind of mortgage are they looking for?
Answer: package mortgage
Explanation:
From the question, we are informed that Mr and Mrs. Haley are purchasing beachfront property in an upscale development and that the home comes equipped with all furnishings.
We are further told that the Haleys want to get a mortgage that will cover the purchase price plus all the furnishings. This shows that they are looking for package mortgage.
A package mortgage is a form of mortgage whereby the personal property and the furniture will have to be included when buying the house.
Peter Parker is evaluating two different methods for manufacturing spiderwebs. The first option is manufacturing them in his home lab. This will entail purchasing an industrial-grade chemical reactor that costs $450,000. He will have to hire a lab assistant who will initially receive a salary of $60,000 a year, but that salary must be adjusted for inflation every year at an inflation rate of 2.5%. After ten years, the chemical reactor can be sold for $30,000. This lab setup can produce 10,000 cubic meters of spiderwebs per year.
The second option is outsourcing all the manufacturing process to a biotech company recently set up by Bruce Banner. In this case, the price of the spiderwebs will be $14 per cubic meter over the next ten years.
Since Peter Parker is a broke student, all of this project is being financed by a superhero fund set up by his late friend and mentor Tony Stark. This fund returns 11% annually. Since this is not a commercial endeavor, there are no taxes nor depreciation to consider. Given these data, calculate the unit price of manufacturing spiderwebs in the lab and decide which of the two options makes the most economic sense. Justify your answers with calculations.
Answer:
Option B makes the most economic sense.
Explanation:
Option A:
The total Initial investment amount - $450,000 + $60,000 = $510,000 total Initial investment cost excluding the adjustment for inflation every year of the staff.
Per unit manufacturing cost= $510,000 ÷ 10, 000 (cubic meters of spiderwebs per year) = $51 (implying the selling price per unit will be higher than this).
Option B:
Initial total investment cost = $0 (he only outsourced)
Per unit manufacturing cost= less than $14 (because the price of the spiderwebs will be $14 per cubic meter over the next ten years).
By outsourcing following option B, Peter would avoid the massive initial investment cost of buying the industrial-grade chemical reactor that costs $450,000. Also, since this is not a commercial endeavor he needs to be wary of the lower cost per unit of the spiderwebs he stands to gain with option B.
Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70, and the book value per share is $9. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon rate of 7 percent, and sells for 95 percent of par. The second issue has a face value of $60 million, a coupon rate of 6 percent, and sells for 107 percent of par. The first issue matures in 25 years, the second in 8 years. Suppose the most recent dividend was $4.30 and the dividend growth rate is 4.5 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
WACC = 8.97%
Explanation:
total value of equity = $70 x 4,000,000 = $280,000,000
cost of equity:
$70 = $4.4935 / (Re - 4.5%)
Re - 4.5% = 6.42%
Re = 10.92%
total value of debt:
$75 million x 0.95 = $71,250,000
YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%
$60 million x 1.07 = $64,200,000
YTM = {60 + [(1,000 - 1,070)/8]} / [(1,000 + 1,070)/2] = 51.25 / 1,035 = 4.9517%
weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%
total value of the firm = $280,000,000 + $135,450,000 = $415,450,000
equity weight = $280,000,000 / $415,450,000 = 0.674
debt weight = 1 - 0.674 = 0.326
WACC = (0.674 x 10.92%) + (0.326 x 6.2315% x 0.79) = 7.36% + 1.605% = 8.965% = 8.97%
Alpha Industries is considering a project with an initial cost of $9.1 million. The project will produce cash inflows of $1.84 million per year for 7 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.94 percent and a cost of equity of 11.49 percent. The debt–equity ratio is .71 and the tax rate is 40 percent. What is the net present value of the project?
Answer:
NPV = $1.22 million
Explanation:
The Net present value (NPV) is the difference between the Present value (PV) of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
To work oit the NPV we would need to determine the discount rate i.e cost of capital as follows:
Cost of capital -discount rate -
WACC = We×Ke + Wd×Kd
After cost o debt = 5.94× (1-0.4)=3.56
WACC = (0.71×3.56 %) + (0.29×11.49%)=5.86 %
PV of cash inflow = A× (1- (1+r)^(-n))/r
A- annul cash inflow, r- 5.86%, n- 7
PV of cash inflow= 1.84 million × (1- 1.0586^(-7))/0.0586 =10.32
Initial cost = 9.1 million
NPV = 10.32 - 9.1 = 1.22 million
NPV = $1.22 million
Archie Co. purchased a framing machine for $60,000 on January 1, 2021. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the sum-of-the years'-digits method, depreciation for 2022 and book value at December 31, 2022, would be: (Do not round intermediate calculations.)
Answer:
$16,500
Explanation:
Depreciation is a method used in expensing the cost of an asset.
sum-of-the years'-digits method = (useful life remaining / sum of years) x (cost of asset - residual value)
sum of the years = 1 + 2 + 3 + 4 = 10
(3 / 10) x ($60,000 - $5,000) = $16,500
The mode of transportation that results in the lowest transportation cost will also lower total costs for a supply chain.
a) true
b) false
Answer: False
Explanation:
Transportation is the movement of individuals or goods from one place to another. Supply chain are the steps that are involved before a product will finally get to the consumer.
It should be noted that the mode of transportation that results in the lowest transportation cost will not necessarily lower total costs for a supply chain. This I because transportation isn't the only process involved on supply chain.
When modeling the right to develop an oil property as a real option, and in the presence of fixed costs, using oil price volatility in the option-pricing model will
Answer:
overestimate because the value of the option depends on the volatility of revenue
Explanation:
The greater the market volatility, the greater the range that would be needed to determine the option premium. This would end up causing an overestimation of the premium value.
Therefore making use of oil price volatility in the option-pricing model will overestimate as value of option is dependent on how volatile the revenue is.
Good strategy execution involves Multiple Choice making choices among broad or narrow low cost and differentiation strategies to compete against rivals. selecting a capable management team. team participation to perform strategy-critical activities in light of prevailing circumstances. only senior-level managers to be accomplished on a timely basis. continuous improvements in the value chain in order to maximize operating efficiency.
Answer:
The answer is: team participation to perform strategy-critical activities in light of prevailing circumstances.
Explanation:
The good execution of the strategy is mainly related to the ability of managers to involve all operational areas and all employees in the process of participating in the strategic actions that were developed to achieve the goals and objectives of the organization.
Therefore, managers have an essential role in exercising control, coordination and monitoring of the teams, so that the execution of the strategy takes place in an effective and active manner, being shared as a responsibility and efforts of the entire team.
The firm receives an average of $20,000 in checks per day. The weighted average delay in clearing the checks received is 3 days. Meanwhile, the firm writes an average of $17,000 in checks to pay its suppliers per day. The usual clearing time for the checks the firm wrote is 2 days. The current interest rate is 0.015 percent per day. What is the most the firm should be willing to pay today (in a lump sum today) to eliminate its float entirely? A) 3000 B) 26000 C) 34000 D) 37000 E) 60000
Answer:
$26000
Explanation:
from the question;
check per day; 20000
delay: 3 days
checks to pay suppliers; 17000
clearing time 2 days
we first calculate collection flaot:
collection flaot = average amount of check x outstanding days
= 20000 x 3
= 60000
now we have to calculate disbursements float:
average amount of check x days to clear
= 17000 x 2
= 34000
with these two values we can get the net float
= collection flaot - disbursements float
= 60000 - 34000
= $26000
Colleen, an active union member, applies for a job at a company that her union has targeted so that she can start organizing efforts in favor of the union. She is also being paid by the union for her efforts. Which of the following practices is Colleen employing?a. Embeddingb. Saltingc. Corporate intelligence d. Subversion
Answer:
Correct Answer:
a. Embedding
Explanation:
Colleen could only be able to acquire the needed information about the company which her Union targets by applying to work in the company. The act of infusing herself with the company is called Embedding.
She would be able to be closer to other workers as well encourage them on the need to join the unions. This she could not be able to achieve if she was outside the company.
Record the following transactions on the books of Splish Brothers Inc.a. On July 1, Splish Brothers Inc. sold merchandise on account to Waegelein Inc. for $16,100, terms 2/10, n/30. b. On July 8, Waegelein Inc. returned merchandise worth $4,900 to Splish Brothers Inc.c. On July 11, Waegelein Inc. paid for the merchandise.
Answer and Explanation:
The Journal entries are shown below:-
1. Accounts Receivable Dr, $16,100
To Sales $16,100
(Being sales is recorded)
2. Sales Returns and Allowances Dr, $4,900
To Accounts Receivable $4,900
(Being return of the merchandise is recorded)
3. Cash Dr, $10,976 ($16,100 - $4,900) × 98%
Sales Discounts Dr, $224 ($16,100 - $4,900) × 2%
To Accounts Receivable $11,200 ($16,100 - $4,900)
(Being cash collection on the account is recorded)
Morgan Company issues 10%, 20-year bonds with a par value of $760,000 that pay interest semiannually. The amount paid to the bondholders for each semiannual interest payment is.
Answer: $38,000
Explanation:
The company is supposed to pay bondholders an Interest of 10% per year according to the terms of the terms of the bond.
= 10% * 760,000
= $76,000
However, payments are to be made semi-annually which will be;
= 76,000 * 1/2
= $38,000
g how much money should be deposited today in account that earns 5% compounded interest quarterly so that it will accumulate to 7600 in 9 years
Answer:
Present value of 7600 in 9 years at 5% compounded quarterly = 4,859.51
Explanation:
You will need to invest $4,859.51 at the beginning to reach the future value of $7,600.00 in 9 years at 5% compounded quarterly.
Using an online financial calculator:
FV (Future Value) = $7,600
PV (Present Value) = $4,859.51
N (Number of Periods) = 36 quarters (9 x 4)
I/Y (Interest Rate) = 1.250% (5%/4)
PMT (Periodic Payment) = $0.00
Starting Investment = $4,859.51
Total Principal = $4,859.51
Total Interest = $2,740.49
The compound interest rate is divided into the number of quarters, which is 4 and the number of periods will become 9 x 4 = 36. Then the present value of $7,600 is determined using the PV table or an online calculator, as above.
Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.
Answer:
The down payment is 19000 and monthly payment is 664.009
Explanation:
The purchase price of condominium = $95000
Down payment = 20%
Interest charged = 9.5 %
Time period = 25 years
Down payment amount = 95000 × 20% = 19000
Remaining loan amount = $76000
Below is the calculation of monthly payment:
[tex]\text{Present vlaue of annuity} =\frac{A(1-(1+r)^{-n})}{r} \\A = monthy \ installment \\76000 = \frac{A(1-(1+ 0.095/12)^{-25\times 12})}{ 0.095/12} \\A(0.906112) = 601.667 \\A = 664.009[/tex]
The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $32,000 $40,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $3,520 $14,400 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer 55 % Truck 8 %
Answer:
3D Printer 55 % Truck 8 %
Explanation:
The formula to compute the average rate of return for each proposal is shown below:
The average rate of return = Average net income ÷ Average investment
Particulars 3D printer Truck
Average net income (a) $880 $1,600
($3,520 ÷ 4 years) ($14,400 ÷ 9 years)
Average investment (b) $16,000 $20,000
($32,000 ÷ 2) ($40,000 ÷ 2)
Average rate of return (a ÷ b) 55% 8%
1.1. Which of the following ratios are key components in measuring a company's operating efficiency? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
a. Profit margin
b. Equity ratio
c. Return on total assets
d. Total asset turnover
1.2. Which ratio summarizes the components applicable in 11?
a. Debt ratio
b. Profit margin
c. Return on total assets
d. Total asset turnover
2. What measure reflects the difference between current assets and current liabilities?
a. Gross margin
b. Day's sales uncollected
c. Retun on total assets
3. Which of the following short-term liquidity ratios measure how frequently a company collects its accounts? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
a. Days' sales uncollected
b. Days' sales in inventory
c. Accounts receivable turnover
d. Acid test rato
Answer:
1.1 The ratio from the list below which measures the efficiency of the operations of a company is D - Total Asset Turnover Ratio.
Explanation:
Total Asset Turn Over Ratio is calculated by dividing Net Sales by Average Total Assets.
For example, if company CDH is reporting a value of $499,650 as initial total assets and $387,656 as ending total assets. Within the same period, the company generated sales of $250,655, with sales returns of $17,000.
This means that, the asset turnover ratio for Company CDH is calculated as follows:
($250,655-$17,000)/(($387,656+$499,650)/2)
The answer is 0.52667
Thus, every dollar in total assets generates $0.52667 in sales.
Efficiency ratios are important for rating the operations of the business. They are also used by investors and lenders when conducting financial analysis of businesses to decide whether the companies are a good investment.
1.2 The component which summarises the components applicable in 1.1 is D Total Asset Turnover
2. Working capital is the variance between current assets and current liabilities.
. This is simply the capital that an organisation uses in its day-to-day business operations.
3. The short-term liquidity ratios which calculate how frequently a company collects its accounts are:
A) Days' sales Uncollected and
C) Accounts receivable turnover.
A) Days' sales Uncollected is calculated by
(Accounts receivable/Net annual credit sales) x 365
It is the number of days before receivables are collected.
The lower the ratio the more liquid the company is likely to be. High Days' Sales Uncollected Ratios are bad for business.
C) Accounts receivable turnover is the annual rate at which a business collects its average accounts receivable.
Cheers!
Schwartzkopf Co. purchased for $2,088,000 property that included both land and a building to be used in operations. The seller's book value was $294,000 for the land and $986,000 for the building. By appraisal, the fair value was estimated to be $826,355 for the land and $2,023,145 for the building. At what amount should Schwartzkopf report the land and the building at the end of the year?
Answer:
Cost allocated to land=$605,520
Cost allocated to building=$1,482,480
Explanation:
Calculation for the amount that Schwartzkopf should report the land and the building at the end of the year
A. Calculation for Cost allocated to land
Using this formula
Cost allocated to land=Fair value of land/
Fair value of building and land×Cost
Let plug in the formula
Cost allocated to land=$826,355/($2,023,145+$826,355)×$2,088,000
Cost allocated to land=$826,355/$2,849,500×$2,088,000
Cost allocated to land=0.29×$2,088,000
Cost allocated to land=$605,520
Therefore the Cost allocated to land will be $605,520
B. Calculation for Cost allocated to building
Using this formula
Cost allocated to building=Fair value of land/
Fair value of building and land×Cost
Let plug in the formula
Cost allocated to building=$2,023,145/$2,023,145+$826,355)×$2,088,000
Cost allocated to building=$2,023,145/$2,849,500×$2,088,000
Cost allocated to building=0.71×$2,088,000
Cost allocated to building=$1,482,480
Therefore Cost allocated to building will be $1,482,480
What are the benefits and risks associated with social networks? Support your answers with relevant examples
Answer:
Explanation:
There are many benefits as well as risks to social networks. The greatest benefit is that they allow us to connect with individuals from anywhere in the world, at any distance, and in a seconds notice. This is incredibly powerful and opens the door for many opportunities in all types of markets. Social networks also come with risks, since everyone is on it people tend to share all of their information which can cause problems for that individual if it falls into the wrong hands. For example, an individual connects with a family member who lives in Brasil and has casual conversations with that family member every other day. A hacker may be able to access that information and extract all the valuable information needed to steal that individual's identity.
Assume that the current ratio for Arch Company is 2.5, its acid-test ratio is 2.0, and its working capital is $390,000. Answer each of the following questions independently, always referring to the original information. Required: a. How much does the firm have in current liabilities? (Round your final answer to nearest whole dollar.)
Answer:
Current liabilities = 260,000
Explanation:
Given:
Current ratio = 2.5
Working capital = $390,000
Find:
Current liabilities
Computation:
Working capital = Current assets - Current liabilities
$390,000 = Current assets - Current liabilities
Current assets = Current liabilities + $390,000
Current ratio = Current assets / Current liabilities
2.5 = [Current liabilities + $390,000] / Current liabilities
2.5 Current liabilities = Current liabilities + $390,000
Current liabilities = 260,000
Your customer, age 60, is retired and living at home with a fully paid-off mortgage. Her portfolio contains growth stocks and high-quality bonds, and she is a long-time investor and comfortable with moderate risk. Her objective is a moderate level of current income to supplement her corporate pension plan distributions and the earnings from her traditional IRA. How are the distributions taxed from her IRA
Answer:
Since this person is 60 years old, she will only pay normal income taxes fro any distributions that she receives from her IRA account.
Explanation:
Contributions to a traditional IRA account are tax exempt up to a certain limit. In other words, the money that this client contributed to her IRA account reduced her taxable income. Now that she is retired and starting to receive distributions from her IRA account, she will need to pay income taxes for the money that she receives.
A Roth IRA account works differently, since the contributions are not tax exempt, but the distributions are.
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future cash flows generated by the project is $163,000. Should they invest in this project?
Answer:
No, as the net present value comes in negative
Explanation:
As we know that
Net present value = Present value of cash inflows - Initial investment
where,
Present value os $163,000
And, the initial investment is $180,000
Now placing these values to the above formula
So, the net present value is
= $163,000 - $180,000
= -$17,000
Therefore the company should not accept the project as net present value is in negative that is -$17,000
Who is responsible for responding to workflow(s) for equipment dispatch requests through the business workplace require An approving authority must approve
Answer:
Commander
Explanation:
GCSS-Army is short for Global Combat Support System-Army. The GCSS is a section of the United States Army that is fielded under the 11th Armored Cavalry Regiment. There are the GCSS Wave 1 and GCSS Wave 2. These two groups have different roles.
The role of the Commander falls under the Wave 2 functions where he is required to perform the roles of maintenance, dispatch, unit supply, and property book functions. The Wave 1 function is mostly about allowing access to support supply activity functions. The commanders in any organization they work with can screen several transactions and give approval for equipment dispatch.
1.If the manufacturer is considering production quantities of 40,000 units or 80,000 units, assuming 90% of product will be sold and 10% will be salvaged, what is the profit per unit
Carrier sells air conditioning units to distributors. Ahead of the upcoming summer, demand probability is 40,000 units (25%), 55,000 units (35%), 70,000 units (25%), and 80,000 units (15%).
Fixed cost of production = $500,000
Variable cost of production per unit = $1,200
unit selling price= $1500
value for unsold products = $900
Answer the following questions:
1. If the manufacturer is considering production quantities of 40,000 units or 80,000 units, assuming 90% of product will be sold and 10% will be salvaged, what is the profit per unit?
Answer:
For 40,000 units
Profit per unit = $287.50
For 80,000 units
Profit per unit = $293.75
Explanation:
Total Profit = (0.9 * Total Unit Produced * Per unit selling price) + (0.1 * Total Unit Produced * Per unit selling price) - ( Fixed cost + (Total unit produce* Variable cost per unit))
Total Profit = (0.9 * 40,000 * 1,500 ) + (0.1 * 40,000 * 1,500) - (500,000 + (40,000 * 1,200))
= 54,000,000 + 6,000,000 - 48,500,000 = $11,500,000
For 40,000 units
Total Profit = $11,500,000
Profit per unit = total profit/no. of units
= 11,500,00 / 40,000 = $287.50
For 80,000 units
Total Profit = (0.9 * 80,000 * 1,500 ) + (0.1 * 80,000 * 1,500) - (500,000 + (80,000 * 1,200))
= 108,000,000 + 12, 000,000 - 96,500,000
= 23,500,000
Total profit = $ 23,500,000
Profit per unit = 23,500,000 / 80,000
= $293.75
Ship Co. produces storage crates that require 37.0 meters of material at $0.50 per meter and 0.10 direct labor hours at $12.00 per hour. Overhead is applied at the rate of $18 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card
Answer:
Standard cost per unit= $21.5
Explanation:
Giving the following information:
Ship Co. produces storage crates that require 37.0 meters of material at $0.50 per meter
0.10 direct labor hours at $12.00 per hour.
Overhead is applied at the rate of $18 per direct labor hour.
We need to determine the standard cost per unit:
Direct material= 37*0.5= 18.5
Direct labor= 0.1*12= 1.2
Manufacturing overhead= 0.1*18= 1.8
Standard cost per unit= $21.5
Which financial strategy would you choose to mitigate risk exposure? In your own words, present an example using XYZ company
Answer:
Creating an Insurance fund
Explanation:
An Insurance fund could a very good financial strategy to mitigate risk exposure.
For example, XYZ company is an bank that has over 500, 000 customer base throughout the country. XYZ company has forseen possible financial loses resulting from theft and economic downturn in the future. A safe practice would be to allocate a portion of it's profit– either quarterly or annual profit to an Insurance fund which would mitigate the company from possible financial risks resulting from theft or economic vices.
This financial strategy has proven to be successful in real life in mitigating a company from exposure to risk.
The current account is best defined as:______.
a. the national income account that tracks all purchases made by businesses within the last six months.
b. the account that includes transactions like imports and exports, income earned by Americans abroad, and net transfers to other countries.
c. the account that tracks the flow of domestic money into and out of foreign assets and the flow of foreign money into and out of domestic assets.
Answer: The account that includes transactions like imports and exports, income earned by Americans abroad, and net transfers to other countries.
Explanation:
A current account can be defined as an account that record the different transactions a country carries out with another country. A current account comprises of net primary income, earnings from foreign investors that have occurred within a particular period of time.
Almost all countries are involved in trading of goods and services with another country, a current account helps to evaluate the manner in which a particular country traded their different goods with foreign markets.There tends to be a postive balance of a country exports more goods than it imports.
Explanation:
How is one product determined to specialize in between the two
Answer:
Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency. Many countries, for example, specialize in producing the goods and services that are native to their part of the world, and they trade them for other goods and services.
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Which one of the following conditions is not a requirement for an item to be recorded as a liability on a company's balance sheet?
a) It involves a probable future sacrifice of economic resources by the company.
b) It reduces the market value of the company.
c) It involves a probable future sacrifice to another entity.
d) It a present obligation, arising from a past transaction or event.
Answer:
c) It involves a probable future sacrifice to another entity.
Explanation:
A Liability is defined by the Conceptual Framework as Present Obligation of the entity as a result of past event, the settlement of which will result in the outflow of future economic benefits from the entity.
Additionally liabilities are meant to reduce the market value of the company.
rue or False: The following statement accurately describes how firms make decisions related to issuing new common stock. Taking flotation costs into account will reduce the cost of new common stock.
Answer: False
Explanation:
Flotation costs are the costs that are incurred by a company whenever the company is issuing new securities. They are fee that are charged by the financial institutions for services such as legal and underwriting services.
Flotation costs are additional costs associated that are incurred when a new common stock is raised.
