Answer:
The correctt answer is B. it violates the matching principle
Explanation:
The principle of correspondence, similar to the realization of income, is another considered important in the determination of accounting profits. According to the principle of correspondence, all costs and expenses related to the generation of income are made by doing the same with the latter. In other words, correspondence of income expenses is established, deducting those from these.
Answer:
r or expected rate of return - market = 0.14 or 14%
r or expected rate of return - stock = 0.2120 or 21.20%
Explanation:
Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.
The formula for required rate of return under CAPM is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- rpM is the market risk premium
Under CAPM, the assumption follows that the beta of the market is always equal to 1.
So, expected return on the stock market will be,
r or expected rate of return - market = 0.06 + 1 * 0.08
r or expected rate of return - market = 0.14 or 14%
The beta of the stock is given. We calculate the required rate of return on the stock to be,
r or expected rate of return - stock = 0.06 + 1.9 * 0.08
r or expected rate of return - stock = 0.2120 or 21.20%
Answer: $7.50
Explanation:
Given that,
Total value = $950 million
Accounts payable = $100 million
Notes payable = $100 million
Long-term debt = $200 million
common equity = $200 million
shares of common stock = 100 million
Value of equity = Value of firm - Value of preferred stock - Value of long term debt.
= $950 million - 0 - $200 million
= $750 million
= $7.50
Answer:
the correct option is C) If many firms enter the computer software industry and consequently bid up the price of programmers, then: the long-run industry supply curve will slope downward.
Explanation:
When many firm enter an industry, there is competition and the presence of multiple players will eventually cause the cost of production to decline.
In the short run, if many firms enter the computer software industry and consequently bid up the price of programmers, then the increase in participation will increase the number of software developed.
In the long run, industry supply curve will slop downwards indicating a price reduction.
