All categories

4 years ago

A debt contract is said to be incentive compatible if:______.

Business

1 answer:

vaieri [72.5K]4 years ago

8 0

Answer:

A. the borrower's net worth reduces the probability of moral hazard

You might be interested in

Producer S brokered slightly more than $40,000 in insurance premiums last year. Based on this premium amount, what is the penalt

maw [93]

Answer:

Producer S brokered slightly more than $40,000 in insurance premium last year, the penalty amount of the surety bond S is required to maintain in favor of the people of Illinois is $2,500.

Explanation:

A producer that brokered more than $40,000 in insurance premium in a given year is required to pay a penalty amount of the surety bond of $2,500 in favor of the people of Illinois.

6 0

4 years ago

Which sentence best explains the mistake Maggie made? Her mortgage payments are high, and some months, she earns barely enough t

blondinia [14]

Answer:

She failed to properly assess her risk of storm damage.

Explanation: Edge 2021

4 0

3 years ago

A company purchased a commercial dishwasher by paying cash of $5,000. The dishwasher's fair value on the date of the purchase wa

Fed [463]

Answer:

$5,700

Explanation:

Purchased of a commercial dishwasher + Incurred transportation costs+ Installation fees= Total recorded amounts

$5,000 + $400 + $300 = $5,700.

Therefore the amount that the company will record the dishwasher is $5,700 because the parking ticket should be expensed as incurred due to the fact that it is not a cost necessary to get the asset ready for use.

7 0

4 years ago

Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate

babunello [35]

Full question:

Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)

Sales $ 687,900

Costs $442,800

Depreciation $115,400

EBIT $

Taxes (30%)

Net income $

OCF

What is the depreciation tax shield?

Answer:

Operating Cash Flow(OCF)= $206190

Depreciation tax shield = $34620

Explanation:

To calculate Depreciation tax shield:

Depreciation×tax rate= $115400×0.30=$34620

Operating Cash flow(OCF)= Earnings before interest and taxes(EBIT)+depreciation - income tax expense

So we calculate EBIT and Income tax expense

EBIT= Sales - cost of good sold - depreciation expense

= $ 687,900-$442,800-$115,400= $129,700

Income tax expense= (Sales - cost of goods sold - depreciation expense) × tax rate

=($687900-$442800-$115400)×0.30

=$38910

Therefore, Operating Cash flow(OCF)= $129,700+$$115,400-$38910= $206190

3 0

3 years ago

Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growt

GaryK [48]

Answer:

hmmmmmmmmmmmmm

Explanation:

3 0

3 years ago