Answer:
It might lead to over-optimistic projections
Explanation:
In simple words, the problem with using profitability index as the index criteria lies with the procedure of estimating it. In order to consider the business situation, the organisational finance group requires to settle with the corporation supervisors.
Leadership may be too enthusiastic about their assignment, so forecasts for cash flow may be too substantial. Consequently, in predicting the profitability index, there may be an uptrend prejudice.
Answer:
negative relation between the real interest rate and investment.
Explanation:
Loanable funds can be defined as the total income that are being saved and lend out, other than personal use or as consumption.
Also, it's the total amount investors chooses to borrow to fund their projects.
The slope of the demand for loanable funds curve represents the negative relation between the real interest rate and investment.
This slope of the demand for loanable funds usually slopes downward.
The equilibrium interest rate and quantity of loanable funds falls, when the demand for loanable funds shifts to the left.
D)
Market equilibrium occurs when supply = demand
Answer:
$85,000
Explanation:
In the balance sheet, a company records the value of assets at their historical cost. Assets are recorded in the balance sheet at the price that they were acquired. Even if a company has strong reasons to believe that the value of an asset has increased, It cannot adjust its value in the books.
Harper will record the value of the land at $85,000. $93,000 represents the fair value of the property. Harper cannot record the fair value in the balance sheet. The fair value is only used when disposing of the property. The only way of verifying the fair value is by selling the property.
