Answer:
e) Increase the required rate of return used to evaluate the project to reflect the higher risk of the project
Explanation:
As per the basic concept of investment, "higher the risk, higher the return".
Thus, an investor assumes a higher risk only in the scenario wherein the expected return would be commensurate with such risk. Investor would only invest in a risky asset when the return derived can compensate him for the excess risk assumed.
Required rate of return is an investors expectation of return from a project also referred to as the cost of capital.
So for the purpose of evaluating the project, the investor should use a higher required rate of return to signify higher risk which would reveal the true viability of the project.
Answer:
$400,000
Explanation:
Data provided in the question:
Development cost incurred = $2,000,000
Amount incurred after the technological feasibility was achieved = $400,000
Now,
The Software development costs that would be capitalized in 20X1
= Cost incurred after achievement of technological feasibility
= $400,000
Answer:
The correct option is increases in current liabilities are added to net income.
Explanation:
The rationale for adding increases in current liabilities is that the increase in current liabilities represents cash that should have been paid but retained in the business,hence it is an increase in cash inflow.
The opposite is the case for reduction in current liabilities as the reduction denotes that cash of the business has been used in paying the creditors,hence cash has gone down.The appropriate treatment would to subtract the reduction in current liabilities
Answer:
Total cash payment= $77,510
Explanation:
Giving the following information:
Purchases:
August= 76,300
September= $78,400
October= $80,000
All purchases are paid for as follows:
10% in the month of purchase
40% in the following month
50% two months after purchase.
<u>Cash payment October:</u>
Purchases on cash October= 80,000*0.1= 8,000
Purchases on account September= 78,400*0.4= 31,360
Purchases on account August= 76,300*0.5= 38,150
Total cash payment= $77,510
Answer and Explanation:
a) The reason Company B installed unwanted apps could be because they have a contract with third party app development companies in which the third party firm pays them for installing their apps on their mobile phone. Also, since they have 70% of the market share, the third party companies know the dominant firm's mobile phones are bought by majority of the people Country A.
b) Possible reason could be that the company wants the consumers to have important apps pre-installed in their mobile phones so that they would not have to face the hassle of downloading the apps on their own. Basically for their convenience.
Monopoly is a market structure where one firm has absolute market power subject to government regulation. It includes unique product or no close substitution, market entry and exit is quite hard, non price competition is non existent. Therefore, as a lawyer representing the consumer, I would look into the above conditions that influence monopoly. Such as if the market entry of new entrants is hard or not. Also, since the firm holds 70% of the market share, it is quite evident that the firm is the single dominating company within the industry. This could be one of the major thing that could identify that this is a monopoly market structure.
c) In the case of being a lawyer and representing the firm, the best data I could gather is that mobile phone is not a unique product and the 30% of the market share is still catering to the demand of the people within Country A. Therefore, there is potential for other firms to launch a mobile phone which has no pre-installed apps and customers could buy their product.
