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3 years ago

Which quality of an asset makes it more appropriate for the fair value principle rather than the historical cost principle?

Business

1 answer:

Alchen [17]3 years ago

8 0

Answer and Explanation:

Fair value refers to the current market price of the asset while historical cost is the cost at which the asset was acquired. Fair market value will always be higher than historical cost so it reflects the actual worth of the asset.

One of the qualities that makes valuing current assets at fair value rather than historical cost is the availability and reliability of current market price or fair value of current assets.

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Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes. What type of term life

Agata [3.3K]

Answer:

Decreasing term insurance

Explanation:

Decreasing term insurance is renewable life insurance with a predetermined rate of decline in coverage over the life of the policy.

Premiums are generally continuous throughout the agreement, and there are typically monthly or annual reductions in coverage.

The idea behind the insurance maintains that certain obligations and the associated need for elevated insurance rates are declining with age.

7 0

3 years ago

TRADE OFFER I receive your laugh you receive meme and points

IceJOKER [234]

Answer:

Explanation:

had a good chuckle ty loll /gen

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3 years ago

Miltmar Corporation will pay a year-end dividend of $5, and dividends thereafter are expected to grow at the constant rate of 4%

MaRussiya [10]

Answer:

(a) 8.90%

(b) $102.04

Explanation:

(a) Market capitalization rate i.e. expected return:

= Risk free rate + Beta (Market return - Risk free rate)

= 4% + 0.70 (11% - 4%)

= 8.90%

Therefore, the market capitalization rate is 8.90%.

(b) Intrinsic value of stock:

= Expected dividend ÷ (Required return - Growth rate)

= $5 ÷ (8.90% - 4%)

= $102.04

Therefore, the intrinsic value of the stock is $102.04.

5 0

3 years ago

Of the last 100 customers entering a computer shop, 25 have purchased a computer. If the classical method for computing probabil

nlexa [21]

Answer:

correct option is b.0.50

Explanation:

given data

computer shop = 100 customers

purchased computer = 25

solution

we know that past data does not affect the probability of next outcome

so when they buying computer or net

so here

probability of customer buy computer is = $\frac{1}{2}$ = 0.5

and

probability of customer not buy computer is = $\frac{1}{2}$ = 0.5

so here chance of buying as they buying or not buying is 50 %

so correct option is b.0.50

3 0

3 years ago

Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the risk-free rate to be 3.50 %

Elza [17]

Answer:

WACC (CAPM) 5.2%

WACC (ICAPM) 5.03%

Explanation:

The weighted average cost of capital is

Ke * E/ E+D + Kd * (1 -t) D / E+D

Ke = Rf + (Rm - Rf) * $\beta$

Ke (CAPM) = 3.50% + (8% - 3.50%) * 1.12

Ke (CAPM) = 7.532%

Kd (CAPM) = Kd (1-t)

Kd (CAPM) = 7.60 (1-39%)

Kd (CAPM) = 4.636%

WACC (ICAPM) : 7.532 * 20% + 4.636 * 80%

WACC (CAPM) = 5.2164%

Ke (ICAPM) = 3.50% + (8% - 3.50%) * 0.86

Ke (ICAPM) = 6.596%

Kd (ICAPM) = Kd (1-t)

Kd (ICAPM) = 7.60 (1-39%)

Kd (ICAPM) = 4.636%

WACC (ICAPM) : 6.596 * 20% + 4.636 * 80%

WACC (CAPM) = 5.03%

7 0

4 years ago