Answer:
The correct option is C,small investors cannot efficiently diversify their portfolios, assess credit risk of borrowers, or advertise for needed investments.
Explanation:
Financial intermediaries are those institutions that link the surplus side,those with cash surplus to requirement and the deficit side,those that are short of the required amount of cash for investment purposes.
Financial intermediaries as experts in the field have the requisite knowledge of the market,skills and experience to diversify portfolio.
Diversification involves ascertaining the various instruments the funds available be invested in and the proportion to invest in each .
It is also noteworthy to determine the credit risk of the borrowers to ascertain how risky the investment is and the appropriate level of return.
Finally,the intermediaries advertise the needed investments,for instance an Initial Public Offer could be advertised by prospectus.
Answer:
a. Michael’s personal assets are not recorded on the Apartment Exchange’s balance sheet. ECONOMIC ENTITY PRINCIPLE, the owner's personal assets are not part of his business assets and therefore should be reported separately.
b. The Apartment Exchange records furniture at its cost of $9,000, not its market value of $13,000. HISTORIC COST PRINCIPLE, assets must be recorded at their purchase price.
c. The Apartment Exchange reports its financial statements in U.S. dollars. MONETARY UNIT PRINCIPLE, businesses must record their transactions in a unit of currency (US dollar).
d. Michael expects the Apartment Exchange to remain in operation for the foreseeable future. GOING CONCERN PRINCIPLE, the business will remain in operation for the foreseeable future.
Answer: Requitred units =34,285.7 units
Explanation:
GIVEN
Total Per Unit Sales
$ 300,000 $ 10
Variable expenses 180,000 <u> $6 </u>
Contribution margin 120,000 $ 4
Fixed expenses 100,000
Net operating income $ 20,000
New selling price=Old price - prosed price
=$10-$0.5 = $9.5
Revised contribution margin= Selling price-Variable costs
= $9.5-$6=$3.5
Proposed Contribution margin=Net operating income + Fixed expenses.
=(100,000 +20,000)= $120,000
Required units to be sold=Proposed Contribution margin/Contribution margin per unit
= $120,000/$3.5
=34,285.7 units
Answer:
b.Experience-rating plan
Explanation:
Experience rating is a method of evaluating used by insurance providers to adjust premiums up or down. The rating reflects your previous loss experience. It is based on the presumption that your historical loss experience predicts your future loss experience. In other words, your future losses are likely to be similar to those you incurred in the past. The Experience Rating Plan is mandatory for all eligible insureds. Any action taken in any form to evade the application of an experience modification determined in accordance with this Plan is prohibited. The object of the Experience Rating Plan is to recognize the differences between individual insureds through the use of the individual insured's own loss experience. The experience rating process serves as a means of using a history of past losses to predict the future losses of an insured.
This is done by comparing the experience of an individual insured to the average insured in the same classification. Therefore, using the insured's past experience, the experience modification is determined by comparing the actual losses to expected losses. An insured with better than average experience will produce a credit experience modification factor, while an insured with worse than average experience will produce a debit experience modification factor. A credit experience modification factor, less than 1.00, results in a premium reduction. A debit experience modification factor, greater than 1.00, results in a premium increase. An experience modification factor of 1.00, or unity, does not change premium.
Answer:
The amount of total assets at the end of the year is $15,600
Explanation:
The computation of the total assets is shown below:
= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies
= $5,000 + $10,000 + $1,000 - $400
= $15,600
We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added
