Answer:
Option D ($100,000) is the correct choice.
Explanation:
Given:
Fair value of Assets,
= $800,000
Fair value of liabilities,
= $300,000
Consideration amount,
= $600,000
Now,
The net assets of subsidiary will be:
=
=
=
hence,
The goodwill will be:
=
=
= ($)
Answer:
As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.
The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.
Explanation:
The systematic risk is the risk caused by factors that affect all of the market and are unavoidable. Such a risk is also known as a market risk and is measured by the beta of a stock. The market beta is always 1. A stock having a beta higher than 1 has higher systematic risk than market and a stock having a lower beta than 1 has a lower systematic risk than the market.
As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.
Total risk, on the other hand, is the risk that comprises of both systematic and unsystematic risk. The systematic risk is the market risk as mentioned above while the unsystematic risk is the firm specific risk and is avoidable. The total risk is measured by the standard deviation or volatility of the stock. The stock with higher volatility has higher total risk and vice versa.
The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.
Answer:
Eastern Europeans began to rebel against their governments.
Explanation:
In the communist countries, all the resources are controlled by centralized government. This created a situation when people were given with no right to own private properties. They have to completely rely on the government to receive foods, obtain jobs, and sustain their living.
At that time, the central government fail to maintain the people's well being. This caused wide spread hunger among the soviet union, and the government executed everyone who dared to oppose them. As a result, many members of the soviet union started to rebelled against the government and seek freedom. Many of the people fled to another country while many other decided to seek independence and secede from soviet union.
These countries can gain from trade because norway has an absolute advantage producing fish oil.
Answer:
business portfolio analysis.
Explanation:
Business portfolio analysis is the systematic process by which an organisation analyses the products and services that make up a firm's portfolio.
Businesses use portfolio analysis to identify profitable and unprofitable products and business segments.
The unprofitable products and business segments are demphasises since returns are not much from such activities.
Profitable products and business are emphasised with a view of improving productivity of the firm.
The Boston Consulting Group uses business portfolio analysis to analyze firm's business units (called strategic business units or SBUs) as though they were a collection of separate investments.