Answer:
D. A gain of $45,000 should be recorded.
Explanation:
The computation is shown below
Fair value difference is
= Total assets - book & fair value of liabilities - net assets purchased
= $300,000 - $30,000 - $225,000
= $270,000 - $225,000
= $45,000
hence, the correct option is d. $45,000 and the same is to be considered
We simply applied the above formula
Answer:
The Global Economic Crisis
Factors that led to the Mortgage Crisis include all:
A) Mortgages were accessible for borrowers who did not meet income and minimum down payment requirements. Moreover, the Fed kept interest rates really low to prevent a recession. This led to a decrease in the demand for homes and a further decline in housing prices.
B) The total amount of risk embedded in the securities created by bundling mortgages did not change. The securitization and resecuritization processes led to a distribution of total risk among different types of collateralized securities.
C) Mortgage payments based on short-term interest rates-called adjustable-rate mortgages (ARMs)—were preferred by subprime borrowers.
D) Rating agencies, such as Moody's and Standard & Poor's, earned fees from securitizing agencies for providing ratings for CDOs. The securitizing agencies were looking for higher ratings for their CDOs, and the rating agencies were earning fees. This led to a conflict of interest; thus, ratings did not reflect the true risk involved in the CDOs, which were backed by mortgages.
Explanation:
Hedge funds, banks, and insurance companies helped to cause the subprime mortgage meltdown while regulators looked the other way. They were given free rein to construct so many complex securities which somehow contributed to the mortgage defaults with financial institutions skimming fees during the securitization processes, and mortgages were made accessible for borrowers who did not meet the income and minimum down payment requirements.
Answer:
D - Hold less money
Explanation:
Inflation is the persistent increase in the general prices of goods and services over a period of time.
During inflation period, nobody wants to hold more of cash because the value of money gets depreciated as inflation increases (prices of goods increase).
For example, shoe-leather costs increases when there is an increase in inflation and it makes more economic sense to purchase shoe-leather as it preserves the value of money.
Answer:
IBM could either diversify by the strategy of market penetration, which consists in increasing the market share in a particular sector (in this case, cloud computing) through more marketing efforts.
Or it could integrate horizontally, acquiring a possible competitor that is more advanced in the cloud-computing business. Or even a start-up with good prospects, because with the amount of capital that IBM has, it could more easily expand the start-up operation as a new internal business division.
Answer: Samantha wants to establish credibility with the employee first, then with the team to achieve a goal.
Explanation: First, it seeks to build trust by generating priority work in the employee's skills, then combining integrating this new process with the team and thus creating commitment to achieve the purpose
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