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Oliga [24]
3 years ago
14

If you were interested in evaluating the profitability of a company and could have only limited historical data, would you prefe

r to know operating income or net income for the past five years?
Business
1 answer:
Rudik [331]3 years ago
5 0
I will prefer to know the OPERATING INCOME. Operating income refers to the operating profits of a company before the taxes and interests are removed. It reflects the true situation of the company and can be used to analyse if a company is making profits from its manufacturing process or not. The net income of a company has some expenses and costs that do not reflect the core operations of the company. 
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Suppose a company wants to structure its assets and liabilities such that its equity is unaffected by interest rate risk. To acc
Andreas93 [3]

Answer: b. The duration of its liabilities must equal the duration of its assets

Explanation:

Since the company wants to structure its assets and liabilities such that its equity is unaffected by interest rate risk, then the duration of its liabilities must equal the duration of its assets.

It should be noted that when the duration of its liabilities is shorter than the duration of its assets, the duration gap is positive and when there's a rise in interest rate, the worth of assets will be affected more.

When duration of its liabilities is longer than the duration of its assets, the duration gap is negative and when there's a rise in interest rate, the worth of liabilities will be affected more.

Finally, when the duration of its liabilities is equal the duration of its assets, its equity is unaffected by interest rate risk.

7 0
3 years ago
1. What is capital ?
Vlad1618 [11]
Capital is a different way to call Money
6 0
3 years ago
Founders should be wary of crowdfunding sites like Kickstarter, because these efforts require founders to give up large ownershi
Westkost [7]

Answer:

B. False

Explanation:

As the name suggests that crowdfunding refers to the funding for a project by having a small amount from the public at large in an internet

Since in the question it is mentioned that the founders should put efforts for giving the high stake of ownership with respect to high contributors before raising the funds to launch a product in the market

But this above requirement should not be necessary

Therefore the given statement is false

5 0
3 years ago
To be useful for decision making, information should possess the fundamental qualities of relevance and.
Nitella [24]

To be useful for decision making, information should possess the fundamental qualities of relevance and  <u>Faithful representation</u>.

<h3>What is  faithful representation?</h3>

Faithful representation can be defined as the financial accounting concept that stated a company financial position which they present should be correct with what the company has as their financial statement.

It is paramount that a company a financial statement is accurate  to what they present in the financial statement  and  should not be compromise.

Therefore To be useful for decision making, information should possess the fundamental qualities of relevance and  <u>Faithful representation</u>.

Learn more about  Faithful representation here:brainly.com/question/14506917

#SPJ1

7 0
1 year ago
The standard materials cost to produce one unit of product m is 6 pounds of material at a standard price of $50 per pound. in ma
Musya8 [376]
Direct material cost variance = (Standard price - Actual Price) * Actual Quantity
= ($50 - $51) * 47,000
= $47,000 adverse
5 0
3 years ago
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