Answer:
D. In addition to the present value of all future interest payments at the market (effective) interest rate
Explanation:
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Answer:
In accounting, agency costs are the costs of hiring an agent in order for him/her to act on behalf of a principal. In finance, agency costs are much broader since they imply costs that may appear due to conflicts of interests between the agent and the principal. E.g. a manager who seeks to accomplish short term goals in order to collect a bonus but hurts the long term objectives and goals of the stockholders.
Agency costs of financial distress refers to the costs associated with conflicts of interest that may result in a company being insolvent, specially in the long run. This type of costs are not necessarily related to operating costs, instead they result from management decisions and strategies, e.g. higher cost of capital or debt, or even excessive spending.
Agency benefits of leverage result from stockholders benefiting from the agent's decision to keep equity low, and if needed, obtain financing from debt sources.
Companies using the accrual concept of accounting to complete the measurement process at the year end through the recording of adjusting entries.
<h3>What is an accrual concept?</h3>
An accrual concept is one of the method which records the incomes at the time when it is earned or charges when it is incurred.
Adjusting entries are the entries recorded in the accounting books to close all the accounts at the year end. It helps in determining the correct amount of charges and revenues at the time of finalizing the accounting statements.
Therefore, the adjusting entries are used by the company to complete the measurement process while applying the accrual concept.
Learn more about the accrual concept in the related link:
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Answer: Option (C) is correct.
Explanation:
Correct option: A coordination failure has occured.
When it was observed that most of the consumers and firms decreases their spending because they expect that some other consumers and firms decreases their consumption or spending and this will lead to a recession in an economy. So there is a coordination failure has occured.
Coordination failure is generally occurs when some of the firms can achieve a desirable equilibrium but unable to achieve it because they are not be able to coordinate with their decision making.
Answer:
movement along the demand curve : An increase in the price of donuts
shift of the demand curve : A change in tastes of consumers that makes them desire more donuts
An increase in the number of consumers
Explanation:
only a change in the price of a good would lead to movement along the demand curve for that good. other factors lead to a shift of the demand curve.
an increase in the price of donuts would lead to a reducing in the quantity demanded of donuts. it would lead to a downward movement along the demand curve.
A change in tastes of consumers that makes them desire more donuts and An increase in the number of consumer would lead to an outward shift of the demand curve
