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3 years ago

If expected return is less than required return on an asset, rational investors will ________.

1 answer:

6 0

Sell the asset, which will drive down the price and cause the expected return to reach the level of the required return.

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Dividends declared is subtracted from the Statement of Retained Earnings. True or False.

malfutka [58]

Answer:

True

Explanation:

Retained earnings are profits that management opts not to distribute to shareholders. They are profits invested back in the business. The statement of retained earnings is the financial statement that records the retained earnings.

Calculation of retained earnings is by deducting dividends from the net profits. In the statement of retained earnings, net profits are added to the beginning balance of retained earnings and subtracting dividends declared.

7 0

2 years ago

p. 82) Which of the following is NOT a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis? A. Organizatio

PilotLPTM [1.2K]

Answer:

The correct answer is letter "B": SWOT's focus on the external environment is too broad and integrative.

Explanation:

The SWOT analysis is a study of the internal and external factors that influence companies' operations and from which the entity can take advantage of or steps to control risks. The internal factors are the Strengths and Weaknesses while the external components are the Opportunities and Threats of the firm.

The SWOT's focus on the external environment is broad and integrative but such characteristic represents an advantage not a limitation of this strategic study.

3 0

3 years ago

Calculating Residual Income Pelican Manufacturing earned operating income last year as shown in the following income statement:

TiliK225 [7]

Answer:

(A) $425,000

(B) $24,350

Explanation:

(a) Average Operating Assets:

= (Beginning Operating Assets + Ending Operating Assets) ÷ 2

= ($390,000 + $460,000) ÷ 2

= $425,000

Therefore, the average operating assets is $425,000.

(b) Residual Income:

= Operating Income - (Minimum Rate of Return × Average Operating Assets)

= $66,850 - (10% × $425,000)

= $66,850 - $42,500

= $24,350

6 0

3 years ago

A firm will experience a loss when its revenue is less than its expenses

tatiyna

The answer for this question is True

5 0

3 years ago

German companies do not recognize the profit until the project is completely finished and they have been paid. recognize profits

photoshop1234 [79]

Answer:

German companies do not recognize the profit until the project is completely finished and they have been paid.

Explanation:

German companies prepare their accounting balances under IFRS standards (common for all EU member countries) and German GAAP.

Under IFRS standards, revenue must be recognized when the business satisfies a performance obligation.

German GAAP is very prudent in determining profits, that is why they are only recognized once a project is completely finished and it has been completely paid.

Some specific German rules are to starting to change due to globalization, but others are still subject to legal requirements.

7 0

3 years ago

If expected return is less than required return on an​ asset, rational investors will​ ________.

If expected return is less than required return on an asset, rational investors will ________.