Answer:
C. $190,000
Explanation:
As per the given question the solution of Income reported on Income statement is provided below:-
here, we ill find first share in equity income and depreciation expenses on undervalue equipment to reach the i
ncome reported on Income statement
Share in equity income = Net income × Interest
= $500,000 × 40%
= $200,000
Depreciation expenses on undervalue equipment = undervaluation ÷ Number of years × Interest
= $250,000 ÷ 10 × 40%
= $10,000
Income reported on Income statement = Share in equity income -Depreciation expenses on undervalue equipment
= $200,000 - $10,000
= $190,000
Answer: Occurs only during a recession.
Explanation:
Cycling unemployment is a kind of unemployment where company lay-off workers because they can't meet up with their payments: as a result of a general drop in the demand for goods and services in the economy of country.
Cyclical unemployment are very common in recessions as companies then massively drop workers in their establishment due to general low economic activities.
Answer:
New price (P1) = $72.88
Explanation:
Given:
Risk-free rate of interest (Rf) = 5%
Expected rate of market return (Rm) = 17%
Old price (P0) = $64
Dividend (D) = $2
Beta (β) = 1.0
New price (P1) = ?
Computation of expected rate on return:
Expected rate on return (r) = Rf + β(Rm - Rf)
Expected rate on return (r) = 5% + 1.0(17% - 5%)
Expected rate on return (r) = 5% + 1.0(12%)
Expected rate on return (r) = 5% + 12%
Expected rate on return (r) = 17%
Computation:
Expected rate on return (r) = (D + P1 - P0) / P0
17% = ($2 + P1 - $64) / $64
0.17 = (2 + P1 - $64) / $64
10.88 = P1 - $62
New price (P1) = $72.88
Answer: A) Prototype
Explanation:
The first model shown to entrepenuers are called prototypes
proto- before
Answer:
Put options give the holder the right to sell the underlying stock to the seller of the put option.
Put options are advantageous when the price in the market falls below the strike price of the option because the buyer will be able to sell at above market value and make a profit.
The asking price for a strike price of $9.00 is listed to be $0.33 and this is the premium paid by the buyer of the Put Option.
<h2>
1. Return if stock sells for $8.00</h2>
= Amount received/ Amount spent
= (No. of shares * ((Strike price - Market price) - Premium paid) ) / (No. of share * premium)
= (2,300 shares * (($9.00 - 8.00) - 0.33))/ ( 2,300 * 0.33)
= 2.03
= 203 %
<h2>
2. Return if stock sells for $10.00. </h2>
As this is an option, the investor can decide not to sell to the seller. The market price is higher than the strike price so they will not sell to the seller of the option and the return will be;
= (No. of shares * - Premium paid) ) / (No. of share * premium)
= (2,300 shares * - 0.33)/ ( 2,300 * 0.33)
= -1
= -100 %
