Answer:
The correct answer is letter "B": A decrease in a deferred tax asset.
Explanation:
A Deferred Tax Asset is an asset on a balance sheet of a business that can be used to lower taxable income. It is the opposite of deferred tax liability that reflects something that will increase income taxes. Both are listed under current assets on the Balance Sheet.
The deferred tax asset will be generated when recorded income taxes owed are higher than the income taxes paid to the Government.
Thus, <em>a decrease in deferred tax is recorded when a company has collected revenue in advance for a good not delivered or a service not rendered yet.</em>
Answer:
<em>an option agreement.
</em>
Explanation:
The <em>option agreement</em> in the arena of financial derivatives <em>is a contract between two parties that gives one party the right, but not the obligation, to buy an asset from the other party or to sell an asset to the other</em>.
It outlines the agreed-upon price and the transaction's future date.
Answer:
Sell 33 contracts
Explanation:
According to the scenario, computation of the given data are as follows:
Price of yellow corn = 95% of red corn
Bushels grows = 156,750
So, yellow corn bushels = 156,750 × (1 ÷ 95%)
= 165,000
So, number of contracts sell = 165,000 ÷ 5,000
= 33 contracts.
Hence, the farmer Brown should sell 33 contracts to hedge his position.
Answer:
The market price if the bond has a par value of $2,000 is A. $1,790.11
Explanation:
The Market Price, PV of the Bond can be determined as follows :
PMT = $2,000 × 5.80% = - $116
P/yr = 1
YTM = 7 %
n = 14
Fv = - $2,000
Pv = ?
Using a financial calculator, the Market Price, PV is $1,790.1088 or $1,790.11.
