Explanation:
Qualitative analysis;
The given case belongs to real options in finance terms where the project offers tangible assets in comparison to financial instruments.
The project is of real option. The value of any real option would be more when:
- the project under consideration is very risky
- With respect to timing option value, there is time to change the decisions
Having said that, since project is risky and investment can be made later, hence it would be more feasible to wait and observe
Answer:
ARR=15.82%
Explanation:
Joe's Hardware
Cash flow 1,540,000
Average Cash flow =305,000+265,000+(6×230,000)/8
Average Cash flow =305,000+265,000+1,380,000/8
=1,950,000/8
=243,750
ARR= Average Annual Operating Income/ Initial investment
=243,750/1,540,000
ARR=15.82%
Answer:
b. If it feels wrong, don’t do it
Explanation:
Ethics is about doing what is morally right. This may vary from one person to another as what may be right to one may be wrong to another based on culture and other influential factors.
A good rule for avoiding unethical behavior would therefore be " If it feels wrong, don’t do it"
The right option is b.
Answer:d. This type of fraud benefits top executives as it generally increases stock price.
Explanation:Fraud can be defined as a deliberate misrepresentation to gain an advantage over another party. Fraud comes in many different forms, including fraud in financial statements, the misappropriation of assets (theft) and subsequent cover-up, and disclosure fraud.
Fraud involves the false representation of facts, whether by intentionally withholding important information or providing false statements to another party for the specific purpose of gaining something that may not have been provided without the deception.
company committing fraud is taking advantage of information asymmetry; specifically, that the resource cost of reviewing and verifying that information can be significant enough to create a disincentive to fully invest in fraud prevention.
Answer:
Bad things.
Explanation:
People with shares will see a fall with their wealth, and if people are losing money on their shares, then they will be more hesitant to spend money; which can result in a fall in customer spending.
