Status

Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer La

Monica [59]

Answer: $15,000

Explanation:

Given that,

Elite U:

Costs $50,000 per year

Larry values attending Elite U = $60,000 per year

State College:

Costs = $30,000 per year

Offered Larry an annual scholarship = $10,000

Larry values attending State College = $40,000 per year

No Name U:

Costs = $20,000 per year

Offered Larry a full annual scholarship = $20,000

Larry values attending No Name = $15,000 per year

Larry gets economic surplus from:

Elite U = $60,000 - $50,000

= $10,000

State college = $40,000 + $10,000 - $30,000

= $20,000

No Name U = $15,000 + $20,000 - $20,000

= $15,000

State college > No Name > Elite U

Therefore, the opportunity cost of attending State college is the value of the next best alternative that is No Name U.

Hence, the opportunity cost is $15,000.

3 0

3 years ago

Capital structure decisions include determining: Multiple Choice which one of two projects to accept. how to allocate investment

Serjik [45]

Answer:

The correct answer is how much debt should be assumed to fund a project.

Explanation:

The first thing that must be specified is that a company can be leveraged through debt, contributions from partners or equity, and that the relationship between these two variables will be the capital structure of the company. In addition, one could say that success comes with more certainty to a company that evaluates different possibilities in which these two forms of leverage come into play.

The term optimal structure, in finance, includes the close relationship that exists between the costs and benefits that may be the product of different forms of leverage. One of the points that financial advisors take into account to measure such relationship are the tax advantages that an entrepreneur can acquire when making financial decisions and the decisions he makes regarding the leverage he wishes to obtain.

The following are some of the aspects that are evaluated when looking for an optimal capital structure:

Financing costs can be high as a result of the company neglecting its good name before the financial sector; In case the company does not comply with the business hypothesis underway or has a bad habit of payment, it can lead to high interest rates and unfavorable conditions or, in the worst case, close the doors in the financial sector.
Having a good payment capacity and a good habit of timely payment will be key when requesting a loan, not only for obtaining the credit itself, but because you can obtain proposals from different financial institutions and take advantage of the best rates and benefits.
The portfolio purchase options are always a good ally to improve the cash flow of the organization, to take advantage of this it is necessary to evaluate the rate, term and additional conditions that this new financing includes.
The company must find that different transactions are not restricted in the contracts it makes with third parties. Having to subject the activity to the clauses imposed by suppliers or allies, can cause you to miss the opportunity to take advantage of other businesses.
The agency theory and the moral hazard problem is something that must be taken care of very carefully, since the level of autonomy that the administrator has in the company can jeopardize the offer of value that the investor expects to receive. There have been cases in which the bad decisions of the administration, whether due to errors or fraud, have caused bankruptcy cases or penalties.

In reality, an optimal capital structure is found when investors obtain a significant value offer, that is, that the earnings per share –UPA– are greater, and when financial leverage is used without exceeding market risk levels, but it should also be clarified that all this varies according to the economic conditions of the country and the sector in which the company is located. Finally, it goes without saying that supporting the evaluation of decisions through different financial indicators makes it possible to make a more accurate decision in all cases.

4 0

3 years ago

_____ is an important part of the conflict resolution process when there are disputes relating to money matters in families.

valkas [14]

<u>"Financial planning"</u> is an important part of the conflict resolution process when there are disputes relating to money matters in families.

Financial Planning is a continuous procedure to enable you to profit that can enable you to accomplish your objectives throughout everyday life.

It may include setting up fitting wills to secure your family, considering how your family will oversee without your pay should you fall sick or kick the bucket rashly, burning through cash in an unexpected way, however it includes contemplating these things together i.e. your 'plan'. You can construct an arrangement all alone, or if your requirements are more intricate you may need the assistance of a Financial Planner.

8 0

4 years ago

When would a court consider the adequacy of consideration? Select one: A. To verify that a sale of assets was not done to avoid

solong [7]

Answer:

E. To verify that property was sold at its fair market value

Explanation:

Adequacy of consideration is an aspect of law that says a lawful agreement is made when the buyer of a good or service gives a fair price for offerings made by the seller.

The fair price may however come in different forms - property, a promise to perform an action, an act, or money.

For example if a person offers to sell a car at $3,000 and the buyer accepts this price, the agreement is said to have adequate consideration.

If a court determines that a contract does not meet fair market price of goods and services sold, it can nullify the contract

4 0

3 years ago

(I) The average lifetime of a debt security's stream of payments is called duration.

oksian1 [2.3K]

Answer:

The correct answer is C: Both are true

Explanation:

Duration is simply defined as the average lifetime of a debt security stream of payment and the duration of a portfolio is the weighted average of the duration of the individual securities, with the weights reflecting the proportion of the portfolio invested in each.

3 0

3 years ago