Adverse selection occurs in the market for used cars because used car buyers _____

ou have just received seed money for a new e-commerce business and you want to hire a dozen people with a lot of creative potent

Degger [83]

Answer:

I have just received seed money for a new e-commerce business and you want to hire a dozen people with a lot of creative potential. To hire the most creative people, you would select applicants who:

Has above-average intelligence, is persistent, has subject-matter expertise, and an inventive thinking style.

Explanation:

Starting a new e-commerce business required the need for hire experienced personnel with creative thinking style in order to spur the business to the peak inline with vision and mission set for such businesses

5 0

3 years ago

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at Janu

LenaWriter [7]

Answer:

Pastner Brands

a. Compensation expense related to the options to be recorded each year, allocated with separate tranches:

Vesting Date Amount Vesting Fair Value Compensation

per Option Expense

Dec. 31, 2018 25% = 80,000 $4.00 $320,000

Dec. 31, 2019 25% = 80,000 $4.40 352,000

Dec. 31, 2020 25% = 80,000 $4.80 384,000

Dec. 31, 2021 25% = 80,000 $5.60 448,000

Total 100% 320,000 $1,504,000

b. Compensation expense related to the options, allocated using the straight-line method:

= $376,000

Explanation:

a) Data and Calculations:

Executive stock options issued = 320,000

Options exercise price = $28 per share

Number of tranches for the options = 4

Number of options exercisable in each tranche = 80,000

Vesting Date Amount Vesting Fair Value Compensation

per Option Expense

Dec. 31, 2018 25% = 80,000 $4.00 $320,000 (80,000 * $4.00)

Dec. 31, 2019 25% = 80,000 $4.40 352,000 (80,000 * $4.40)

Dec. 31, 2020 25% = 80,000 $4.80 384,000 (80,000 * $4.80)

Dec. 31, 2021 25% = 80,000 $5.60 448,000 (80,000 * $5.60)

Total 100% 320,000 $1,504,000

Compensation expense, using the straight-line method = $376,000 ($1,504,000/4)

8 0

3 years ago

Compute the present value of a $100 investment made 6 months, 5 years, and 10 years from now at 4 percent interest. Instructions

sladkih [1.3K]

Answer:

Present value investment = $98.05

Explanation:

given data

present value = $100

time 1 = 6 months = $\frac{6}{12}$ = 0.5 year

time 2 = 5 years

time 3 = 10 years

interest rate = 4 % = 0.04

to find out

Present value investment in 6 month for the rate 4 percent

solution

we get here Present value investment by as

Present value investment = present value ÷ $(1+r)^{t}$ ..............1

put here value and we get

Present value investment = $\frac{100}{(1+0.04)^{0.5}}$

solve it we get

Present value investment = $\frac{100}{1.0198}$

Present value investment = $98.05

6 0

3 years ago

Research depicts the typical saturn dirt bike shopper as a middle-aged person with an income of $75,000 per annum. this is an ex

Alex777 [14]

This is a demographic profile of the target market. Marketers use this profile to segment the entire market into target markets. They use things like demographics (age, race, income, education) to identify which markets are more likely to buy their products.

This whole process is called market segmentation.

5 0

3 years ago

Examples of imperfections in the financial system which allow banks to exist include which of the following? A. Informational as

Airida [17]

Answer: A. Informational asymmetry

Explanation:

There exists an information asymmetry in the financial markets that rises from people being unable to adequately analyse the riskiness of various business endeavours.

Banks overcome this information asymmetry by having experience and well trained personnel that are capable of adequately assigning risk to ventures and charging them the appropriate interest rate to make a return on that venture.

3 0

3 years ago

Adverse selection occurs in the market for used cars because used car buyers ______