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dsp73
4 years ago
6

Evan has received permission from his state to form a corporation for his startup, expecting his liability would be limited to t

he amount of his investment. But his bank asked him to assume personal liability before it would grant him a business loan. Why would the bank make this demand?
Business
1 answer:
vekshin14 years ago
7 0

Answer:

Evan's business has no credit history.

Explanation:

As Evan has just created the company, it has no record about its ability to pay debt which is important for a bank to give a loan and it will not be willing to approve it if the company has no credit history that shows that it can make the payments. Because of that, it will require Evan to assume personal liability in order to have a guarantee that the loan would be paid back.

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On June 30, 2018, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2018, the company
attashe74 [19]

Answer:

The Journal entry is as follows:

On July 1,

Cash A/c                                  Dr. $439,200

Finance charge Expense A/c Dr. $10,800

To Financing arrangement A/c                       $450,000

(To record the amount of borrowings)

Workings:

Finance charge expense = ($600,000 × 1.8%)

                                          = $10,800

So, cash account = $450,000 - $10,800

                             = $439,200

4 0
3 years ago
Graphically illustrate (using the WS and PS relations) and explain the effects of an increase in the markup on the equilibrium r
lana66690 [7]

Answer:

When the markup increases, real wage decreases and because of the decrease or the now low real wage the demand for labor at a low cost decreases which leads to a increase in the natural rate of unemployment. In addition the natural rate of unemployment has an inverse relationship with the natural level of employment, therefore, the natural rate of employment will decrease. And the output level will decrease.

Explanation:

See attached picture:

The decrease in real wage is shown by the movement from W/P to W/P'.

The increase in the natural rate of unemployment is shown by the movement from Un to Un' and the new equilibrium is at B.  

4 0
4 years ago
In the early days of computers, programmers and designers started businesses in their parents’ garages and worked there until th
joja [24]

Answer:

The correct answer is a. Small firms produce two-and-a-half times as many innovations as large firms relative to the number of persons employed.

Explanation:

SMEs have enormous advantages in terms of innovation compared to large companies because their size gives them dynamism, greater internal flexibility and responsiveness to changing circumstances.

However, some barriers they encounter are the difficulty of financing, the lack of specialists or the lack of resources.

4 0
3 years ago
Although you were not fortunate enough to get Chipper's Golf Resort stock [ticker symbol: CHPR] as an IPO, you are still thinkin
Sever21 [200]

Answer:

The answer is: A) the secondary market; prospectus

Explanation:

Secondary market refers to the stock exchange where investors buy and sell securities that they already possess. The secondary market is what most people think about when they refer to a stock market. A primary market only sells stocks that are being issued for the first time, like an IPO.

The prospectus of a company is a legal document provided by public companies or mutual funds that include information about the company's strategies, financial statements and top management's background.

5 0
3 years ago
5. Risk analysis in capital budgeting Projects differ in risk, and risk analysis is a critical component of the capital budgetin
stira [4]

Answer:

A. Market, or beta, risk

Explanation:

i.e when the CFO adjusts the cost per ton of processing the cardboard, the project’s NPV will decrease.

Solution 2 :- The correct answer is (B) I.e Corporate or with in firm risk

a project's risk to the corporation as opposed to its investors

Solution 3 :- Stand alone risk

Stand alone risk is measured by the variability of the project's expected returns - diversification is totally ignored

5 0
3 years ago
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