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Ainat [17]
3 years ago
12

Assume that Faust and McCabe properly classify the portfolio. At year-end, Faust proposes to sell the securities that will incre

ase 2014 net income, and McCabe proposes to sell the securities that will decrease 2014 net income. Is this unethical
Business
1 answer:
alexgriva [62]3 years ago
5 0

Answer:

No

Explanation:

This is not unethical because it is a common and acceptable practice among many reputable public companies in the United States to adjust their account statements according to their objectives.

Remember, every organisation had a right to decide It's accounting methods.

In this scenario, what both parties hope to achieve is to build up confidence from potential investors.

You might be interested in
Kahn Company paid $240,000 to purchase a machine on January 1, Year 1. During Year 3, a technological breakthrough resulted in t
Serga [27]

Answer:

Yes, the machine should be replaced

Explanation:

The calculation is given below:

<u> Particulars              old Machine            New machine </u>

Purchase price                                       $300,000

Less:

Salvage value                                        -$80,000

Operating cost         $400,000              $144,000

                          ($100,000 × 4 )        ($36,000 × 4)

Total cost                 $400,000                $364,000

Hence, the financial advantage is

= $400,000 - $364,000

= $36,000

As there is a financial advantage of $36,000 therefore the old machine would be replaced with the new machine

4 0
3 years ago
using the scenarios in case exhibit 9, what role does leverage play in affecting the return on equity (roe) for cpk? what about
motikmotik

Using the scenarios in case exhibit 9, Leverage will always lead to an increase in the total rate of return in the equity because leverage will be increasing the interest tax Shield due to which it can be seen that the total market value of the company has increased with a higher amount of debt capital.

The cost of capital is generally decreasing with a higher amount of leverage as there will be benefits associated with interest tax shield.

It can be noticed that when a high amount of leverage is used by the company, it is eventually leading to a higher amount of market value for the company as well so higher leverage is leading to a higher amount of market value for the company so leverage is directly related to increases in the market value as high amount of leverage will be increasing the total market value.

Leverage is an investment strategy that uses borrowed money (specifically, the use of various financial instruments or borrowed capital) to increase the potential return on investment. Leverage can also refer to the amount of debt a company uses to fund its assets.

Leverage is the amount of debt a company has in its debt-equity combination (capital structure). A company with more debt than the industry average is considered highly leveraged. The definition of leverage is the act of leverage or force to influence a person, event, or thing. An example of a lever is the action of a seesaw. An example of leverage is being the only person running for class president. noun.

Learn more about  Leverage here

brainly.com/question/3966216

#SPJ4

6 0
1 year ago
What is a benefit of stock markets?
sleet_krkn [62]

Answer:

currently there will be no benifits because of the Corona Virus because the stock market is crashing.

6 0
3 years ago
Read 2 more answers
Carla Beverage Company reported the following items in the most recent year. Net income $44,400 Dividends paid 6,720 Increase in
GuDViN [60]

Answer:

$45,780  Operative Cash Flow  

$55,560  Cash Flow Ind Method  

Explanation:

$55,560  Cash Flow Ind Method  

$44,400  Net Income  

$4,350  Depreciation  

-$6,720  Dividends  

-$10,320  Accounts Receivable  

$7,350  Accounts Payable  

$24,690  Notes Payable  

-$8,190  Property and Equipment  

$45,780  Operative Cash Flow  

$44,400  Net Income  

$4,350  Depreciation  

-$10,320  Accounts Receivable  

$7,350  Accounts Payable  

To prepare the statement of cashflow it's necessary to calculate the difference between the balance on each year.

First we need the value of the Net Income and Depreciation of the year as initial value of the cash flow ($55,560+$4,350),  

then we deduct the amount of dividends paid during the year (-$6,720).  

Then we begin to calculate the Assets section, everytime that the Assets are higher than the past year we have to put money  

from the cash flow to compensate the assets increase and vice versa, with exception of the Cash Accounts that we are calculating.

Per Example: Accounts Receivable -$10,250.

Property decreased Cash flow which means that we buy some assets (-$8,190 )

Then with the Liabilities we do the same but in this case an increase in the liabilities means we have more money to our cash flow,

per example, an increase in the accounts payable means that we paid less to our suppliers so we have the money in the cash accounts.  

Per Example: Accounts Payables $7,350.

The Cash provided by the operative activities try to find the cash inflows and outflows caused by the company's operations,  

so it only includes the income statement and from the balance the deviation in the Accounts Payable, Inventories,  

Depreciation and the account payable segment.  

This statement doesn't include Sales and purchases of assets, dividend distributions and financial movements because this are among the  

non operating activities that affect cashflow.  

8 0
3 years ago
Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year and that real GDP per capita
Andrej [43]

Answer:

40 years

Explanation:

Given:

Per capita GDP of United states = $32,000

Per capita GDP of China = $4,000

Growth rate of United states = 2%

Growth rate of China = 7%

Now, By the rule of 70 , the GDP will double in \frac{\textup{70}}{\textup{Growth rate}} years

Therefore,

The United States GDP will double in = \frac{\textup{70}}{\textup{2}}  = 35 years

Thus,

The GDP of united states in 35 years will be (2 × $32,000 ) = $64,000

this is equals to the 16 times the current GDP of the China

Now,

The China GDP will double in = \frac{\textup{70}}{\textup{7}} = 10 years

Therefore,

The GDP of china will be

2 × $4,000 in 10 years   = $8,000

in 20 years  = 2 × $8,000 = $16,000  ( i.e 4 times)

in 30 years  = 2 × $16,000 = $32,000  ( i.e 8 times)

in 40 years  = 2 × $32,000 = $64,000  ( i.e 16 times)

Hence, it will take 40 years for China to catch up with the united states

6 0
3 years ago
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