All categories

3 years ago

What are two motivations to sell an asset, even if the current value is less than what you paid for it?

Business

1 answer:

SOVA2 [1]3 years ago

6 0

Answer:

two motivations to sell an asset, even if the current value is less than what you paid for it, are:

1. You want to buy new assets that are performing well currently.

2. You want to diversify the types of assets that you own.

Explanation:

Asset management needs to implement measures in order to administrate risk. When you have an asset, whose value is less than the price you paid for it. Selling this asset becomes a logical decision when you either want to diversify your portfolio or buy a new asset that has a better performance in the market.

Diversifying a portfolio is very important to avoid market risk. Having all your eggs in one basket is never a good investment decision because if something goes wrong with that particular investment your losses will be greater. For this reason, is always a good decision to keep different types of financial assets that help you to divide the risk among several assets.

Besides, if the current performance of a given assets is way better than an asset that is currently giving you no return in the investment because its actual price is less than the price you paid for it.

You might be interested in

A retail store's Sales Account totals $223,000 which includes both the sales revenue and the sales tax on the sales. If the sale

ella [17]

Answer:

$10,619.05

Explanation:

When sales is made at a tax rate of 5%, the entries to be posted in the proportion of the transaction amount

Dr Cash/ Accounts receivable 105%

Cr Sales revenue 100%

Cr Sales tax 5%

As such, if Sales Account totals $223,000 which includes both the sales revenue and the sales tax on the sales, it means that the accounts contains 105%, as such, the sales tax which is the amount owed the taxing agency

= 5/105 * $223,000

= $10,619.05

3 0

3 years ago

When qualifying a buyer using the Fannie Mae guidelines, what is the ratio allowed for the amount of money for housing expense c

vfiekz [6]

Answer:

28%

Explanation:

Most mortgage lenders, including Fannie Mae, use the 28/36 rule. That rule states that a family should spend no more than 28% of the gross monthly income (GMI) on housing expenses, and pay no more than 36% of GMI to cover debts (mortgage payments are included in this 36%).

Statistics show that households that do not comply with the 28/36 rule, tend to have difficulty paying back loans.

8 0

3 years ago

Which of the following is a duty of a personal finance manager?

Eva8 [605]

Answer:

Filling rax return is a duty of a personal finance manager

4 0

3 years ago

Which of the following is true of grapevine communication? a. It has a reputation for being speedy but inaccurate. b. It passes

Tomtit [17]

Answer:

The correct answer is a. It has a reputation for being speedy but inaccurate.

Explanation:

Taking into account the nature of this type of information (Informal), the idea that the greatest advantage is speed is reinforced because it is not necessary to comply with a series of regular channels such as authorizations or document printing to transmit the message. . However, within informal communication, a series of interpretations is usually generated that can generate a wrong handling depending on the person who receives it, so it is not advisable to do this unless the importance of the message is low and it can be communicated assertive way.

7 0

3 years ago

Read 2 more answers

Tomas owns a sole proprietorship, and Lucy is the sole shareholder of a C corporation. In the current year, both businesses make

MA_775_DIABLO [31]

Answer:

True

Explanation:

While a sole proprietor is expected to report his business income or loss on his personal tax form as the business is not considered for separate tax , a c corporation shareholders are taxed based on the dividends received from the business profit and the entire profit taxed for the corporation tax.

As no profit was distributed to the owners , there was no personal tax basis for Lucy but only the corporation tax that will be charged on the business net profit.This could have been a tax avoidance method adopted by Lucy to reduce his tax liabilities as a sole share holder.

7 0

3 years ago