Market failure occurs when a free market is unable to A) distribute resources efficiently.
Answer: Please refer to Explanation
Explanation:
A financial asset is a non-physical asset that that gets it's value from a contract that was signed by the parties involved. Financial assets include Bonds, stocks and even cash amongst others.
Real Assets on the other hand are physical assets that can be seen and hence have an inherent value. Examples include buildings and cars.
a. Toyota <u>creates</u> a <u>real asset</u>- the factory. The loan is a <u>financial asset </u>that is <u>created</u> in the transaction.
The factory becomes a real Asset that is tangible and has an inherent value. The loan was created by an agreement between Toyota and the bank and so is a Financial Asset.
b. When the loan is repaid, the <u>financial</u> asset is <u>destroyed</u> but the <u>real</u> asset continues to exist.
When the loan is repaid, Toyota no longer owns that financial asset because it has gone back to the bank. However, the Real Asset which is the factory that they were able to build will remain with Toyota.
c. The cash is a <u>financial</u> asset that is traded in exchange for a <u>real</u> asset, inventory.
As already mentioned, cash is a financial asset. Inventory is a tangible substance with an inherent value not determined by a contract and so is a Physical Asset. Trading cash for Inventory is therefore trading a financial asset for a physical one.
Answer:
$45,440.00
Explanation:
Jack's interest on capital =5%*$90,000=$4,500.00
Stevens' interest on capital =5%*$111,000=$ 5,550.00
Net income left to be shared in ratio 1:2 is the net income of $309,000 minus the total interest on capital of $10,050 i.e $4,500+$5,550 and salaries to Stevens
Net income left for sharing=$309,000-$10,050-$176,130=$ 122,820.00
Jack's share of profit=1/3*$ 122,820.00 =$ 40,940.00
Stevens' share of profits=2/3*$122,820.00 =$ 81,880.00
Amount distributed to Jack=$4,500+$ 40,940=$45,440.00
Answer: Expense budget approach
Explanation: Budgeting is a process of creating an itemized summary of intended expenditure; usually coupled with expected revenue for a particular institution, activity or time-frame. An expense budget approach is one in which managers of a division are given a fixed budget. After all expenses are made and recorded, the managers are then evaluated on the basis of their ability to produce goods or services given the amount of money made available.
Answer: Limited partner.
Explanation:
A limited partner is part of the ownership of a partnership business, whose liability in the business, can't go beyond his capital invested into the business.
The partner who bears much of the liability of a partnership business is the general partner, which is the more active business owner.
