1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
elena-14-01-66 [18.8K]
3 years ago
12

Which of the following statements is FALSE? Group of answer choices The right discount rate for a cash flow is the rate of retur

n available in the market on other investments of comparable risk and term. To compensate for the risk that they will receive less than promised if the firm defaults, investors demand a lower interest rate than the rate on U.S. Treasuries. The equivalent after-tax interest rate is r(1 - τ). The actual cash flow that the investor will get to keep will be reduced by the amount of any tax payments.
Business
1 answer:
mart [117]3 years ago
8 0

Answer:

To compensate for the risk that they will receive less than promised if the firm defaults, investors demand a lower interest rate than the rate on U.S. Treasuries.

Explanation:

Investors are risk averse, this means that they will always prefer those investments with lower risks. Since US treasuries are considered the safest investments,  they are used to calculate the risk free rate.

When investors invest in other securities (not US government) they will always demand a higher return because a private entity or even a state or local government can default on a their debt. That difference between the return yielded by a US security and the return from any other investment is called the risk premium.

You might be interested in
The following transactions occurred during March 2016 for the Wainwright Corporation. The company owns and operates a wholesale
Triss [41]

Answer:

1. Financing Activity : $300,000

2.Investing Activity : $10,000 and Non-cash Financing and Investing Activity : $30,000

3.Operating Activity : - $90,000

4.Operating Activity :   $50,000

5.Operating Activity :  -$5,000

6.Operating Activity :  -$6,000

7.Operating Activity :  -$70,000

8.Operating Activity :   $55,000

9.Operating Activity :   $1,000

Explanation:

Operating Activities involves the entity`s trading operation in ordinary course of business.

Investing Activities involves the entity`s sale or purchase of Investments.

Financing Activities involves the entity`s acquisition and sale of funds.  

6 0
3 years ago
Assume that the labor market for barbers is competitive and that it is differentiated into two groups:
ehidna [41]

Answer and Explanation:

I will go through each and every option explaining the reasons and what option would be the best:

The (a) part says 'difference in wages will eventually disappear since a haircut is a homogeneous good' - This is not true because even though it is an homogeneous product, some customers do have a strong preference for barbers who are not going bald. Therefore, they know their worth and they would want to capitalize on that and get paid just a bit more than bald barbers.

The (b) part says 'barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair'. - If the barbershop charges higher price for barbers that have hair then the customers will prefer bald barbers as the questions mentions that there is high competition and since it is an homogeneous, customers would be willing to save money and get their haircut from some other barber.

The (c) part says 'barbershops that hire bald barbers will always be much more profitable' - Not necessarily. The reason is that some customers have a strong preference for barbers who are not bald and therefore, that would help barbershops who have barbers with hair to be a bit more profitable as some additional customers would want their services.

The (d) part says 'barbershops that hire barbers with hair will always be much more profitable' - This is the best option and the reason for it is because some customers have a strong preference for barbers with hair and that would help the barbershop to earn more. They would have the customers who already indifferent to whoever cuts their hair and in addition to that, they would also have the customers who have their preference.

Hence the answer is D.

4 0
3 years ago
On July 1, a company paid the $600 premium on a one-year insurance policy with benefits beginning on that date. What will be the
Schach [20]

Answer:

$300

Explanation:

When insurance is paid in advance, the entries required are

Debit Prepaid Insurance

Credit Cash account

As time elapses and the insurance expires,

Debit Insurance expense

Credit Prepaid Insurance

Amount of insurance expense as at 31 December (6 months between 1 July and 31 December)

= 6/12 * $600

= $300

The insurance expense on the annual income statement for the first year ended December 31 is $300.

8 0
2 years ago
A promissory note
Sloan [31]

Answer: c. may be used to settle an accounts receivable.

Explanation: A promissory note is defined as a financial instrument that contains a written promise by the note issuer or maker to pay the note payee a definite sum of money at a specific future date or on demand and  may be used to settle an accounts receivable (the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers and are listed on the balance sheet as a current asset). They are commonly used in businesses as a form of short term financing as they can be exchanged for cash at a future time when account receivables have been collected.

8 0
3 years ago
Sanjeev leases a house from Clara, and the lease has an option contract attached that permits Sanjeev to buy the house if he cho
Aleksandr-060686 [28]

The amount of the option fee need to be on amount agreed to by the parties in order to be legally binding.

<h3>What is a lease agreement?</h3>

A lease agreement is a legal arrangement whereby a person give another person the right to possess the land for use in return for a periodic compensation.

However, the lease agreement can lead to permanent purchase, based on the agreement of the lease.

In conclusion, the amount of the option fee need to be on amount agreed to by the parties in order to be legally binding.

Read more about lease agreement

<em>brainly.com/question/24460932</em>

8 0
2 years ago
Other questions:
  • Gni ppp, or gross national income divided by purchasing power parity, helps measure:
    8·1 answer
  • If a financial manager focuses on monitoring and influencing the company's current assets and liabilities, he or she is involved
    5·1 answer
  • 1. What are chain restaurants?
    10·1 answer
  • identify 3 challenges bricks construction may encounter when trying to implement their corporate social investment plan in the l
    11·1 answer
  • Green Valley Steel had sales of $1,000,000 and collections of $760,000, leaving a balance of $240,000 in accounts receivable as
    11·2 answers
  • Sayon Co. issues 200,000 shares of $5 par value common stock to acquire Trask Co. in an acquisitionbusinesscombination. The mark
    9·1 answer
  • Consider Figure 9.2 on page 205 of our textbook. Suppose P0 is $10 and P1 is $11. Suppose a new firm with the same LRAC curve as
    15·1 answer
  • You contract to purchase 100 widgets at $100 each. The supplier backs out of the contract. If you are able to purchase, on the o
    10·1 answer
  • When a cereal company introduces a stylish new granola, placing it at eye level on grocery shelves and pricing it higher than th
    13·1 answer
  • Identify which cost of inflation—menu costs or shoe-leather costs—is illustrated in each of the scenarios.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!