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Kazeer [188]
3 years ago
5

Vocabulary Check. Choose the term within the parentheses that best matches each of the following descriptions. (LO1-1–LO1-7) a.

Expenditure on research and development (financing decision / investment decision) b. A bank loan (real asset / financial asset) c. Listed on a stock exchange (closely held corporation / public corporation) d. Has limited liability (partnership / corporation) e. Responsible for bank relationships (the treasurer / the controller) f. Agency cost (the cost resulting from conflicts of interest between managers and shareholders / the amount charged by a company’s agents such as the auditors and lawyers)
Business
1 answer:
Leokris [45]3 years ago
7 0

Answer:

a. Investment decision b. financial asset c. Public corporation d. Corporation e. Treasurer f. the cost incurred from conflicts of interest between managers and shareholders

Explanation:

a. Expenditure on research and development will be categorized as an investment decision, as the return on this is not certain. Such investment may or may not increase productivity or find a new product line.

b. A bank loan is classified as a financial asset because it is a non physical, liquid asset. A real asset is a physical asset which has some intrinsic value, for instance, land, equipment etc.

c. A public corporation is a company owned by government whose shares are publicly traded, so if it's listed on stock exchange the company will be a public corporation.

d. In partnerships, the partners share profits and liability equally. While in the corporations there is limited liability.

e. The controller supervises over accountants and oversees the preparation of reports, auditing and accounting functions of a company. While the treasurer manages the external interactions, such as interactions with bankers, investors and share holders.

f. Agency cost is an internal expense. It arises when an agent acts on behalf of principal. It arises from core inefficiencies, for instance,it arises when interest of managers of the company and the shareholders is in conflict.

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Coronado Company purchased land for $80,000. The company also paid $12,000 in accrued taxes on the property, incurred $5,000 to
neonofarm [45]

Answer:

Amount recorded will be $95000

Explanation:

We have given that company purchased a land for $80000

Accrued taxes on the property = $12000

Incurred $5000 to remove an old building

And salvage value = $2000

We have to fond the amount for the land recorded in the accounting record

So the amount will be = $80000+$12000+$5000 -$2000 ( salvage value ) = $95000

So amount recorded will be $95000

6 0
3 years ago
Data Recovery Systems (DRS) has a degree of operating leverage (DOL) equal to 3.2x and a degree of total leverage (DTL) equal to
Anna71 [15]

Answer:

The DRS's EBIT will be $205,920.

Explanation:

Degree of operating leverage measures how EBIT will change with change in sales

Degree of operating leverage (DOL) = % change in EBIT / % change in sales

In our case, DOL = 3.2x

Sales forecast = $300,000

Actual sales = $313,500

% change in sales = (Actual sales - forecast )/ forecast = (313,500 - 300,000) / 300,000

                              = 4.5%

EBIT forecast = $180,000

Now putting everything in DOL formula

3.2 = % change in EBIT / % change in sales = % change in EBIT / 4.5

% change in EBIT = 3.2 * 4.5

                             = 14.4%

Actual EBIT = Forecast *(1 + % change)

                    = 180,000*(1 + 0.014)

                    = $205,920

Therefore, The DRS's EBIT will be $205,920.

4 0
3 years ago
A company's normal operating activity is to produce 500 units per month. During its first two months of operaetion, it produced
Bingel [31]

Answer:

a. 450-510

Explanation:

4 0
3 years ago
You have been offered an investment that will pay you a lump sum of $30,000 25 years from today, along with a payment of $1,000
leva [86]

Answer:

$5,793.40

Explanation:

The amount you invest is called the Principle Value (PV). Therefore the question requires us to determine the Principle Amount that will pay you a lump sum of $30,000 25 years from today.

<em>FV = $30,000</em>

<em>N = 25</em>

<em>PMT = ($1,000)</em>

<em>P/Yr = 1</em>

<em>I = 6 %</em>

<em>PV = ?</em>

Using a Financial Calculator to input the values as shown above, the Principle Value (PV) is calculated as $5,793.40.

Therefore, you will be willing to invest $5,793.40 today to have this investment in your portfolio

6 0
3 years ago
A buyer has decided to offer $335,000 for a home that she really likes. The bank will loan her 80% of the purchase price for 30
RUDIKE [14]

Answer:

We have:

Amount of principal = $268,000

Interest payment = $1,522.24

Explanation:

These can be calculated as follows:

Loan principal = Cost of the home * Percentage to borrow = $335,000 * 80% = $268,000

Interest payment = (Loan principal / $1,000) * $5.68 = ($268,000 / $1,000) * $5.68 = 268 * $5.68 = $1,522.24

Therefore, we have:

Amount of principal = $268,000

Interest payment = $1,522.24

5 0
3 years ago
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