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3 years ago

If there is a substantial increase in bad debts, what might this mean?

1 answer:

6 0

In the case of lending money (for a vehicle or a mortgage for example), this may be an indication of irresponsible lending practices. If there is a substantial increase in bad debts, it means that less creditworthy borrowers (borrowers who are less capable or likely to repay) are obtaining credit too easily.

In the case of bad accounts receivable for a company, there are similar implications, but it also could mean that the inventory that a company is selling is not being sold quickly enough by the retailer. One example could be ToysRUs having overdue accounts due to its partnered toy makers, such as Hasbro. It could be a sign that the demand for the product is not sufficiently high to sell the full amount of purchased inventory, at least when being sold through that retailer.

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Each economy possesses resources and technology to use in production. true or false

kicyunya [14]

Answer:

True. as land is limited and the technology can be developed and used for good.

Explanation:

Every economy has resources and the better the economy uses these resources the better is the production and consumption of the resources, the only need is the potential to develop the resource as the middle east has developed the use of desalinated water technology to clean the salted water and thus create a valuable resource.

The resources are there and one needs to develop them to there full potential with the help of technology that may be transferred from any other nation or territory as a form of the technology transfer.

7 0

3 years ago

Having recently purchased a new computer, Jake will invest in _____ that will protect his computerfrom data corruption, pop-up a

kaheart [24]

Answer:

C. anti spyware

Explanation:

this is a type of program designed to prevent and detect unwanted spy program installation and to remove the programs if installed. it will also protect computers from data corruption, pop-up ads, hackers , identity theft and other online - related threats.

3 0

4 years ago

g Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the

sdas [7]

Solution:

Given,

The equilibrium price is $5.50 (P)

The equilibrium quantity is 37.0 (Q)

The price is $ 8.75

(percentage change in quantity)/(percentage change in price)

So Motorcycles would be the following:

[(63 - 29)/29]/[($12.75 - $0.50)/$0.50]

=62 / 11.75

= 5.27

Evaluate, then do the same for pancakes.

8 0

4 years ago

The Wheeler-Lea Act: a. expanded the FTC's authority to regulate advertising. b. limited the FTC's authority to regulate only ad

Kisachek [45]

Answer:

A) Expanded the FTC's authority to regulate advertising.

Explanation:

3 0

3 years ago

Read 2 more answers

Hankins, Inc., is considering a project that will result in initial aftertax cash savings of $5.3 million at the end of the firs

oee [108]

Answer:

WACC - Company = 10.94%

WACC - Project = 11.94%

The maximum that the company will be willing to pay for this project is $61.0626 million

Explanation:

To calculate the maximum cost that the company will be willing to pay today, we first need to find out the company and project WACC.

The WACC or weighted average cost of capital is the cost of a company's capital structure. It is calculated as follows,

WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE

Where,

d, p and e represents debt, preferred stock and common equity
w represents the weight of each component
r represents the cost of each component

<u>Weightage of debt and equity</u>

Total assets = debt + equity

Total assets = 0.52 + 1 = 1.52

wD = 0.52/1.52

wE = 1/1.52

WACC - Company = 0.52/1.52 * 0.066 + 1/1.52 * 0.132

WACC - Company = 0.1094 or 10.94%

WACC of project is 1% more than WACC of company. So WACC of project is 10.94% + 1% = 11.94%

The maximum that must be paid for this project can be calculated by calculating the present value of the cash flows provided in form of saving by this project.

Using the constant growth model of cash flow approach,

Present value = 5.3 * (1+0.03) / (0.1194 - 0.03)

Present value = $61.0626 million

3 0

4 years ago