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Charra [1.4K]
3 years ago
14

Which of the following is not an example of moral hazard? Investment banks use 40-1 leverage, knowing that if the market collaps

es, the government will come to the rescue. Domestic automobile companies fail to design high-quality fuel-efficient cars, hoping that the government will save them if oil prices skyrocket. A backcountry skier takes an excessively dangerous run, knowing that local rescue crews will come to his aid if he gets in an accident. Insurance companies stopped offering insurance policies in New Orleans after a major hurricane, knowing the government will offer subsidies to draw people back.
Business
1 answer:
Rus_ich [418]3 years ago
7 0

Answer: Insurance companies stopped offering insurance policies in New Orleans after a major hurricane, knowing the government will offer subsidies to draw people back. <u>Is not an example of moral hazard.</u>

<u></u>

Explanation: In this case the insurance company <u>is looking for its own benefit.</u>

To be an example of moral hazard, the subject should not try to avoid the risk, beyond being exposed to it.

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The step in the formal planning process known as __________ involves studying past events, examining current conditions, and for
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Situation analysis

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2 years ago
On September 15, 2021, Oliver's Mortuary received a $3,600, nine-month note bearing interest at an annual rate of 14% from the e
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Answer:

The Journal entry is as follows:

On December 31, 2021

Interest Receivable A/c Dr. $147

          To Interest revenue A/c      $147

(To record the interest receivable)

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= $3,600 × 0.01167 × 3.5

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8 0
3 years ago
Charleston, Inc. has Accounts Receivable of $320,000 and an Allowance for Doubtful Accounts of $16,000. If it writes-off a custo
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$304,000

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Please see attachment

5 0
3 years ago
Income statement data for Huffman Pharmaceuticals are provided below. Income Statements 12/31/201712/31/2016 Sales Revenue$598,0
koban [17]

Answer:

Huffman Pharmaceuticals

The percentage that should be assigned to Gross Profit, using trend analysis, is:

= 42%.

Explanation:

a) Data and Calculations:

Income Statements           12/31/2017         12/31/2016

Sales Revenue                  $598,000          $724,000

Cost of Goods Sold             337,000            427,000

Gross Profit                          261,000            297,000

Operating Expenses            137,000             146,000

Operating Income               124,000              151,000

Other Income (Expense)      60,000              23,000

Income before Tax              184,000             174,000

Income Tax Expense             71,000              76,000

Net Income                         $113,000           $98,000

Income Statements           12/31/2017         12/31/2016

Sales Revenue                  $598,000          $724,000

Cost of Goods Sold             337,000            427,000

Gross Profit                          261,000            297,000

Ratio of Gross profit to

 Sales Revenue

2017 = $261,000/$598,000 * 100 = 43.65% =  44%

2016 = $297,000/$724,000 * 100 = 41%

Average Gross profit ratio for the two years = 42.5% (44 + 41)/2.

b) Huffman's trend analysis is the use of its past financial performance indices to predict its future financial performances.  Past performances are expressed in percentages, forming the basis for predicting and comparing future performances of an entity.

6 0
2 years ago
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