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Sveta_85 [38]
3 years ago
10

1) Why might investors prefer floating rate notes over a fixed rate bond?

Business
1 answer:
sladkih [1.3K]3 years ago
8 0

Answer:

These questions are incomplete since the article relating to Hologen company is not attached. However, I would answer them this way.

Explanation:

1) A floating rate bond has a shorter duration; almost zero and it has lower sensitivity to interest rates compared to a fixed rate bond.This means that the former has a lower interest rate risk. Investors tend to demand floating rate bonds when they expect future interest rates to rise because their prices would be close to their par values as their interest rates would also increase. On the other hand, fixed bond's interest rates are inversely related to their prices.

2)

For an issuing company, borrowing money floating rates terms could be riskier for cashflow management purposes . Every time interest rates increases, it means that the company would pay higher interests to lenders which could hurt its profitability. The fluctuations could also negatively affect future financial planning unlike issuing fixed rate bonds whose coupon payments are constant hence decreasing the volatility of earnings.

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A(n) ________ breach of a contract occurs when a party renders inferior performance of his or her contractual obligations.
DanielleElmas [232]
The answer to this question is a material breach. A material breach is a breach of contract where in the other party failed to provide or perform what is needed in the contract. This also shows that the contract can no longer be completed.
6 0
3 years ago
Latham Corporation constructs a new factory building. The materials cost $300,000. Other costs include direct labor of $150,000,
Dovator [93]

Answer:

$535,000

Explanation:

The computation of the Latham's basis in the building is shown below:

= The material cost + direct labor cost + worker pension cost + architectural fees + depreciation on equipment  + interest paid during the year

= $300,000 + $150,000 + $5,000 + $15,000 + $25,000 + $40,000

= $535,000

It includes both direct and indirect cost

Since we have to compute for the building so we do not considered the purchase value of land and the loan amount

3 0
3 years ago
The __________ is the difference between annual government expenditures and revenues.
sergiy2304 [10]
The standardized deficit <span>is the difference between annual government expenditures and revenues.
This calculation is made on the assumption that the market is on full employment. The difference between expenditures and revenues in this matter could be used to determine whether the government has run its operations efficiently or not.</span>
7 0
3 years ago
Read 2 more answers
In 2018, the Barton and Barton Company changed its method of valuing inventory from the FIFO method to the average cost method.
Sati [7]

Answer:

In Barton and Barton Company's general journal, entry required include:

Debit Retained Earnings Account with $8.2 million

Credit Opening Inventory with $8.2 million

Being reversal of overstated inventory due to change from FIFO to Average cost method.

Explanation:

The debit entry to the Retained Earnings Account will reduce the balance by $8.2 million.  The effect of overstating the closing inventory is overstatement of the net income because the cost of sales was understated as a result of the inventory overstatement.

The credit entry to the Opening Inventory reduces the balance to the new balance based on the average cost method of $23.8 million.

The FIFO cost method or First-In, First-Out method is an inventory costing method that assumes that goods that were bought first were the ones to be sold first.  The inventory cost is therefore valued with the most recent quantity and cost price.

On the other hand, the Average Cost Method, also called the Weighted Average Cost Method, calculates the inventory cost by adding all the period's inventory and dividing it by the quantity for the period.  This gives an average cost which is in turn used to multiply the quantity of inventory at the end of the period to obtain the inventory cost.

Both methods are estimates that produce different results and affect the reported net income differently.  There is always the need for consistency in choosing the method to apply so that reported net income is not unduly distorted.

3 0
3 years ago
Lauren Barton, a single mother with three children, lived in Portland, Oregon. Cynthia VanHorn also lived in Oregon until she mo
AleksandrR [38]

The cengage learning for the mitigation is the difference between the agreed upon $72000 less what was earned from  the $25000 position that barton managed to obtain

<u>Explanation</u>:

Mitigation of damages:

In the case of barton v. vanhorn a court would consider barton's attempts at findings similar employment a reasonable step in mitigating her damages.

Under the doctrine of damage mitigation, a wrongfully terminated employee must look for other compartable employment, and subtract whatever you make from that job from what you request in damages.

Damages in the case would be the difference between the agreed upon $72000 less what was earned from  the $25000 position that barton managed to obtain.

6 0
3 years ago
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