Answer:
I should not accept the bet; the precise level of risk aversion does matter.
Explanation:
Risk averse person is the one who is not willing to take the risk even if he is given high returns. Risk averse person will always avoid the risks. In the given scenario the person is risk averse. If he rolls out the dice he has to pay $200 times the dice number which means he just have two chance (dice rolls 1 or dice rolls 2) for getting return otherwise he will loose the bet and he will have to pay money from the pocket.
False. It involves the ability to take charge of things or starting/doing things independently on ones own.
Answer:
By following the Accountants Principle and Dicksons policy of debiting Bad debt accounts as Accounts are written off, the Net income would have been impacted negatively (reduced) by the write off from Prior period of $31,330 only
However, by following the % of receivables approach, a total of $31,330 (Write off from prior period) + $9,240 (current period provision for bad debt) will impact the Net Income negatively (reduced) = $40,570
Explanation:
Accounts receivable balance = $77,000
12% projected uncollectible debt = $9,240
Provision for bad debt under the % of receivables approach = $9,240
Amount written off related to prior year = $31,330
Answer:
$53
Explanation:
The computation of the stock sale at the end of the year is computed after calculating the required rate of return and the growth rate
The required rate of return by applying the Capital Asset Pricing model formula is
= Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.2 × (16% - 6%)
= 6% + 12%
= 18%
Now the growth rate is
Stock price = Dividend per share÷ (Required rate of return - growth rate)
$50 = $6 ÷ (18% - growth rate)
So, the growth rate is 6%
Now the ending stock price is
Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $6 + $6 × 6%
= $6 + 0.36
= $6.36
So,
= ($6.36) ÷ (18% - 6%)
= $53
