Answer:
D. Reduce Output but continue production
Explanation:
Since marginal cost equals average total cost, it can be deduce that she's operating at her most productively efficient region. But she's force to sell at a price lower than her average total cost which could indicate a loss in profit. This means that she should stop production. But then again, her average variable cost is less than the market price, therefore it is adviceable for her to reduce output but continue to produce.
Answer:
1. Indication of financial statement to refer to when answering questions in the following table:
Question Financial Statement
How profitable has the firm been? Income Statement
How much of the firm's earnings are Statement of Retained Earnings
left as balance after the firm pays out
dividends to its shareholders?
2. If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:
a. Overstate its earnings
Explanation:
Company A's Income Statement shows its profit performance at different levels. At one level is the gross profit, which shows the difference between the net sales or service revenue and the cost of sales/service. At another level is the operating income, which is the income before interest and taxes. The next important level is the net income, which is the profit after taxes. This shows the earnings available for distribution to stockholders. The Statement of Cash Flows classifies the cash flows generated into operating, investing, and financing activities, and shows the non-cash flow adjustments.
Answer:
1. Suppose TouchTech, a hand-held computing firm, is selling stocks to raise money for a new lab—a practice known as___project__ finance. Buying a share of TouchTech stock would give Nick____equity interest in____ the firm. In the event that TouchTech runs into financial difficulty, _____bonds_____will be paid first.
2. Correct statements:
a. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Nick's shares to decline.
c. An increase in the perceived profitability of TouchTech will likely cause the value of Nick's shares to rise.
d. Alternatively, Nick could invest by purchasing bonds issued by the government of Japan.
3. Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a ___higher__ interest rate than a bond issued by the government of Japan.
Explanation:
When Nick purchases stock in the private company, he invests in the equity of the company. Project finance can be done through equity financing or debt financing. Equity financing gives Nick an equity interest in the TouchTech and a share in the decision-making of the business, whereas debt financing pays a fixed amount of interest periodically without a share in the decision-making of the company.
Portability should be the answer
Answer: D - Enforce federal rules on member banks
Explanation:
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