All categories

3 years ago

If a contract involves a significant financing component:____________.

Business

2 answers:

Pavel [41]3 years ago

7 0

Answer:

The time value of money is used to determine the fair value of the transaction ( B )

Explanation:

If a contract involves a significant financing component the time value of money is used to determine the fair value of the transaction and this is because the time value of money states that the money at hand ( available money ) is worth more than the identical sum of money in the future due to the earning capacity of the money.

therefore a contract involving a significant financing component ( present monetary component ) would have its fair value determined by the time value of money

dedylja [7]3 years ago

3 0

Answer:

B. the time value of money is used to determine the fair value of the transaction.

Explanation:

The time value of money is important principal in order to identify receiving the money then on later date.

Since the contract is based on Financing, therefore, it is mandatory that the amount will be paid on later date.

You might be interested in

Which one of the following statements is correct? Question 19 options: A longer payback period is preferred over a shorter payba

stich3 [128]

Answer:

The payback period ignores the time value of money.

Explanation:

This could primarily be classified to be amongst the major disadvantages of the payback period that it ignores the time value of money which is a very important business concept. In the other hand, the payback period disregards the time value of money. It is determined by counting the number of years it takes to recover the funds invested. Some analysts favor the payback method for its simplicity. Others like to use it as an additional point of reference in a capital budgeting decision framework.

The payback period does not account for what happens after payback, ignoring the overall profitability of an investment.

8 0

3 years ago

Use the following information for questions 6 and 7. Wonderland Company imports and sells a product produced in Canada. In the s

GarryVolchara [31]

Answer:

$1,564,800

Explanation:

Year Purchased Quantity (Units) Cost per unit Total Cost

2017 4,000 $160 $640,000

2018 10,000 $220 $2,220,000

2019 16,000 $320 $5,120,000

(A) Sales Revenue

2019 18,400 $392 $7,212,800

(B) Less: Cost of Goods Sold (LIFO)

2019 (16,000 x $320) ($5,120,000)

2018 {(18,400 - 16,000) x $220} ($528,000)

(A - B)Gross Profit $1,564,800

7 0

3 years ago

An age-appropriate skill is best defined as a skill that is appropriate to the student's

geniusboy [140]

Age age age age age.

8 0

2 years ago

2. Describe one long-term goal that you have and at least two things you will need to do in order to accomplish that goal.

Artist 52 [7]

Answer:

be a music producer

Explanation:

3 0

3 years ago

Speaking loudly enough that everyone in the audience can hear you

yaroslaw [1]

Public speaking in the overall subject but i dont understand the question

8 0

3 years ago