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il63 [147K]
3 years ago
9

A friend comes to you and asks you to invest in his business instead of investing in Treasury bonds. You think he has a good bus

iness model, so you tell him you are willing to invest as long as the expected return on the investment is at least four times the return you would have received on the Treasury bonds. Determine which of these fundamental factors is affecting the cost of money in the scenario described:
0 O Inflation
O Risk
O Time preferences for consumption
Business
1 answer:
asambeis [7]3 years ago
7 0

Explanation:

  • Treasury bonds are U.S government debt securities, that are fixed with a maturity period of 10 years. Having almost little or no risk. So investment in terms of Treasury bonds can be relatively safe.
  • In the given scenario the fundamental factor affecting the cost of money could be Risk and Inflation
  • As mentioned above T-bonds are almost risk-free which means safe and guaranteed returns, however business cannot be completely risk-free and you don't know how invested money would give returns or even not so there is a risk involved here.
  • Inflation, as the word means, is a general increase in prices invariably leading to the downfall of purchasing value for money. Inflation is market dependent. As that will definitely have an impact on the cost of doing business and related factors.
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If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock,
Vinvika [58]

Answer:

Explanation:

The journal entry is shown below:

Bonds payable A/c Dr $60,000

Premium on bonds payable A/c Dr $10,000

           To Common stock A/c $45,000

           To Paid in capital in excess of par A/c $25,000

(Being the conversion of bonds is recorded)

The computation is shown below:

For bonds payable

= sixty $1,000 convertible bonds

That means

= 60 × $1,000

= $60,000

For Premium on bonds payable:

= $70,000 - $60,000

= $10,000

For Common stock:

= 9,000 shares × $5

= $45,000

And, the remaining balance is credited to paid in capital in excess of par

6 0
3 years ago
The Rockies Division operates as a profit center. It reports the following for the year. Budgeted Actual Sales $1,969,700 $1,829
Eduardwww [97]

Answer:

IMPORTANT NOTE: The data of the calculation was obtained from an online research.

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

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6 0
3 years ago
The determinants of the supply of a good are any factors other than the product's ______ that cause the supply curve of the good
Vlada [557]

The determinants of the supply of a good are any factors other than the product's price that cause the supply curve of the good to shift.

<h3>What is supply curve?</h3>

The supply curve can be regarded as  graphic representation which is used in showing the relationship that exist between between the cost of a good or service and  quantity supplied.

However ,  the price is seen at the left vertical axis, of the curve and product's price that cause the supply curve of the good to shift.

Learn more about  supply at; brainly.com/question/25308213

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5 0
1 year ago
What are the pros and con's for the arrive alive campaign?
Elena-2011 [213]
The Arrive Alive campaign was launched to prevent road accidents or at least lessen the instances of accidents due to drunk driving and reckless driving.

The advantages of this campaign are:

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The disadvantages of this campaign are:

1. It does not completely eliminate the risk of accidents due to drunk and reckless driving. It merely 'educates' the drivers about safe acts. 
2. It still allows the drivers to drink and drive but at 'allowable alcohol level' which does not help at all.

In the end, the Arrive Alive campaign failed. 
3 0
3 years ago
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GuDViN [60]
Here are the answers in order: <span>Positive, normative, positive
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Normative analysis refers to what should've been done after considering ethical value

</span>
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