Answer: The correct answer is "b. The investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee."
Explanation: When a company holds between 20% and 50% of the outstanding stock of an investee, the investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee.
If the company owns between 20% and 50% of the shares in circulation of the controlled company, it can be considered that the company that owns the shares exerts significant influence on the controlled company, in this case if the opposite is not proven, You must apply the equity method.
Answer: Option C
Explanation:
A. Assets with physical existence are called tangible assets.
B. There are several financial instruments that lacks physical substance but are not considered as intangible assets.
C. Intangible assets can be either long term or short term.
D. Only those intangible assets that have definite lives are amortized, others with indefinite life are not.
Answer:
The managers predicted total costs for 3500 birdcages will be $74640.
Explanation:
Average cost = Total cost/Total units
total costs = (22*2500)
= $55000
variable costs = (55000 - 5900)
= $49100
variable cost/unit = (49100/2500)
= $19.64/unit
total cost for 3500 birdcages = 5900 + (19.64*3500)
= $74640
Therefore, The managers predicted total costs for 3500 birdcages will be $74640.
Answer:
The amount that should be invested to total $45,000 in 8 years is $18,995.
Explanation:
According to the situation, you have to calculate the amount that you have to invest in the present to get $45,000 in eight years. You can find it using the formula:
P= F/(1+(i/n))^nt
P= present value
F= future value: $45,000
i= interest: 11%
n= number of times compounded per year: 3
t= time in years
P= $45,000/(1+(0.11/3))^(8*3)
P= $45,000/(1+0.0366)^24
P= $45,000/2.369
P= $18,995
Answer:
The correct answer is A. Reduces private-sector economic risk.
Explanation:
Economic risk refers to the uncertainty produced in the return on investment due to changes in the economic situation of the sector in which the company operates. Thus, by way of example, this risk may come from: the management policy of the company, the policy of distribution of products or services, the appearance of new competitors, the alteration in the tastes of consumers, and so on.
Economic risk is a direct consequence of investment decisions. So the structure of the company's assets is responsible for the level and variability of operating benefits.