Wise consumers always understand their needs and wants before they buy.<br> a. True<br> O b. False

McGuire Company acquired 100 percent of the voting common shares of Able Corporation by issuing bonds with a par value and fair

-Dominant- [34]

Answer: $650,000

Explanation:

Given that,

Fair and par value of issued bonds = $150,000

Prior acquisition, McGuire reported

Total assets = $500,000

Liabilities = $280,000

Stockholders’ equity = $220,000

At that date, Able reported

Total assets = $400,000

Liabilities = $250,000

Stockholders’ equity = $150,000

Account payable to McGuire = $20,000

Total assets reported by McGuire after acquisition:

= Total assets + Fair value of investment

= $500,000 + $150,000

= $650,000

4 0

3 years ago

The discount rate is the: multiple choice 1 interest rate at which banks can borrow reserves from other banks. lowest interest r

Reil [10]

Answer:

a. The discount rate is the

interest rate at which banks can borrow reserves from the Federal Reserve.

The discount rate is the interest rate that the FED charges commercial banks, credit unions, or other financial institutions for lending them money.

b. If the Fed were to decrease the discount rate, banks will borrow

more reserves, causing an increase in lending and the money supply.

Lowering the discount rate is considered part of an expansionary monetary policy since banks will borrow more money and lend more money to the public, increasing the money supply.

7 0

3 years ago

Read 2 more answers

Assume that shareholder's required rate of return (r) is 9%. Dr. Pepper is expected to pay a dividend of $2.00 per share (D1) ne

Juli2301 [7.4K]

Answer:

P=$40

Explanation:

We will apply constant dividend growth model that is =P = D1 / ( k-g )

P is the price of share ?

D1 is the current divided $2

k is the rate of return 9%

G is the constant growth 4%

P=2/(9%-4%)

P=$40

3 0

2 years ago

An entrepreneur borrows $500,000 today. The interest rate is 11.5%. If the entrepreneur makes annual payments of $70,000 per yea

love history [14]

Answer:

After 18.44 year loan will be paid

Explanation:

We have given an entrepreneur borrows $500,000 today.

So total amount is $500000

Annual payment is of $70000

Rate of interest r = 11.5 %

We have to find the time period

We know that total amount is given by

$A=P(1+\frac{r}{100})^n$ , here A is total amount , P is yearly paid amount, r is rate of interest and n is time period

So $500000=70000\times (1+\frac{11.25}{100})^n$

$7.142=1.1125^n$

Taking log both side

$log7.142=nlog1.1125$

$n\times 0.0463=0.8538$

n = 18.44 year

So after 18.44 year loan will be paid

6 0

3 years ago

A financier plans to invest up to $600,000 in two projects. Project A yields a return of 9% on the investment x dollars, whereas

USPshnik [31]

Answer:

Project A = $240,000

Project B = $360,000

Explanation:

Planned Investment amount = $600,000

Project A = x dollars, with 9% return

Project B = Y dollars, with 16% return

Project B should not exceed 40% of total investment amount

Therefore, if y dollars is spent on project B,

(600,000 - y) is spent on project A

Return on project A :

0.09(600,000 - y) = 54,000 - 0.09y

Return on project B :

0.16y

Total return = return on A + return on B

54,000 - 0.09y + 0.16y

Total return = 54,000 + 0.07y

Note: Project B should not exceed 40% of investment, Therefore,

y <= 0.4(600,000)

y <= 240,000

slope of the function is positive '54,000 + 0.07y', total return increases when y increases.

Therefore return on investment will be maximized when y = 240,000, as it should not exceed 40% for project B and the rest 360,000 can be invested in project A.

6 0

3 years ago

Wise consumers always understand their needs and wants before they buy. a. True O b. False