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Lesechka [4]
3 years ago
11

When inventory declines in value below original (historical) cost, and this decline is considered other than temporary, what is

the maximum amount that the inventory can be valued at?
a. Sales price
b. Net realizable value
c. Historical cost
d. Net realizable value reduced by a normal profit margin
Business
1 answer:
quester [9]3 years ago
5 0

Answer:

Explanation:

The applicable accounting standard IAS 2 (Inventory) requires that inventory be carried at the lower of cost or net realizable value.

Initial recognition of inventory is at cost. In other words, where the cost is lower than the net realizable value, inventory is written down to the net realizable value.

As such, when inventory declines in value below original (historical) cost, and this decline is considered other than temporary, the maximum amount that the inventory can be valued at is the net realizable value.

The right option is b. Net realizable value

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Explanation:

The term "business" also refers to the organized efforts and activities of individuals to produce and sell goods and services for profit.

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Answer:

B) Normal conditions are rarely encountered."

Explanation:

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3 years ago
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7. Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate i
Vadim26 [7]

Answer:

The correct answer is option (A).

Explanation:

According to the scenario, the computation of the given data are as follows:

First, we will calculate the Market risk premium, then

Market risk premium = (Required return - Risk free rate ) ÷ beta

= ( 9.50% - 4.20%) ÷ 1.05 = 5.048%

So, now Required rate of return for new portfolio = Risk free rate + Beta of new portfolio × Market premium risk

Where, Beta of new portfolio = (10 ÷ 18.5) × 1.05 + (8.5 ÷ 18.5) × 0.65

= 0.5676 + 0.2986

= 0.8662

By putting the value, we get

Required rate of return = 4.20% + 0.8662 × 5.048%

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4 0
3 years ago
The pricing strategy used by companies manufacturing or selling designer apparel custom jewelry and exclusive paintings is refer
a_sh-v [17]

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Companies manufacturing or selling designer apparel, custom jewellery or exclusive paintings usually have a unique brand. These companies usually have their own signature brands that have a big competitive advantage. Hence they charge higher prices.

8 0
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Assume an analyst has been hired to estimate the price elasticity of demand for hamburger (which sells for about $2.30 per pound
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Answer:

The correct answer is B

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Price elasticity of the demand evaluates the demand responsiveness after the change or variation in the product own price.

The formula for computing the coefficient of price elasticity, is the factors which affect the elasticity and also elasticity is vital for business when deciding the prices.

So, Filet mignon(F) sells for $20 per pound when compared to that of hamburger (H) which sells the product for $2.30 per pound. F have the higher price as compare to the H, therefore, the coefficient of the price elasticity of demand in absolute value will be high or larger for F than that of H.

6 0
3 years ago
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