All categories

2 years ago

Which investment option has the highest risk ?

Business

1 answer:

Flauer [41]2 years ago

8 0

Buying is the highest risk investment because the outcome is unknown and you have to take a gamble.

You might be interested in

Silvia Company acquires a 30% interest in Small Company. The fair value of Small's inventory exceeds its carrying value by $100,

beks73 [17]

Answer:

The revenue that the investment in the company would increase by $100,000.

Explanation:

Though the International Accounting Standard IAS 2 Inventories says that the inventory must be recorded at lower of:

Cost
Net Realizable Value (Fair Value less Cost to Sell)

This means though the Net realizable value increases but the cost remains the lower. This means their must not be any changes made to inventory account.

The profit earned from the increase in inventory value will be reflected in the income which will increase the net worth of the investment. So the increase in investment revenue would be by $100,000.

7 0

3 years ago

A monopoly that is maximizing profits operates in the ________ portion of the demand curve.

Alekssandra [29.7K]

In the elastic portion of the demand curve.

8 0

3 years ago

Oak Inc. has the following information regarding its assets: Book Value Estimated Cash Flows Fair Value Equipment $35,000 $30,00

ExtremeBDS [4]

Answer:

d. $7,000.

Explanation:

The computation of the loss recorded due to asset impairment is shown below:

= Book value - fair value

= $35,000 - $28,000

= $7,000

If we consider the building and the patent we see that the estimated cash flows are more than the book value, so no loss on impairment should be taken place

Therefore, only $7,000 should be recorded as a loss on impairment of the asset

8 0

3 years ago

Two fatal flaws can render a business model untenable from the beginning. These are:

zavuch27 [327]

Answer:

The correct answer is the option A: failure to complete a business plan and failure to get funding.

Explanation:

To begin with, if an entrepreneur failures to complete a business plan and to get funding then the most probable thing to happen is that his business will be untenable from the beginning due to the fact that if the person do not possesses money and a plan to put his ideas in action he will never achieve his primary goals, that is, obtaining profits at long term. Therefore that if there is no business plan in which the company must focus and there is no money to carry out that strategy then the business model is doomed.

6 0

3 years ago

On January 1, 2020, Sheridan Company sold 10% bonds with a face value of $2750000. The bonds mature in five years, and interest

kodGreya [7K]

Answer:

$227,591.04

Explanation:

The computation of the interest expense is shown below;

The interest expense on the face value

= $2,750,000 × 10% × 6 months ÷ 12 months

= $137,500

And, the interest expense on the sale value

= $2,973,100 × 8% × 6 months ÷ 12 months

= $118,924

Now the closing balance would be

= $2,973,100 - $137,500 - $118,924

= $2,716,676

Now the interest on the same is

= $2,716,676 × 8% × 6 months ÷ 12 months

= $108,667.04

Now the interest expense is

= $108,667.04 + $118,924

= $227,591.04

7 0

3 years ago