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3 years ago

Why are capital appreciation bonds (CABs) a controversial way for local governments to finance projects?

Business

1 answer:

denis-greek [22]3 years ago

8 0

Answer:

See explanation section

Explanation:

Municipal security from which an investor will receive a return on investment from an initial principal is called a capital appreciation bond. However, in this security, the return on investment will be reinvested further until the security matures at a specific rate. The primary purpose of the CABs is to permit the local authority to generate revenue. Due to the financing in the innovative project without increasing the tax is one of the controversial ways for local governments to finance projects. Another controversial way is to owe investors more than what they acquired.

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Sam Burke, CPA, finds a material error in his client's previously filed tax return and advises the client on how to correct it.

Anton [14]

Answer:

The answer is: C) Consider his continued association with the client.

Explanation:

The American Institute of Certified Public Accountants (AICPA) issues a professional conduct code that regulates their affiliates' activities. According to AICPA's Responsibilities and Public Interest principles, Sam should not continue to work with this client. Sam cannot maintain a professional conduct if he accepts that his client doesn't correct his prior mistakes. If those prior errors persist, then his job will be negatively affected and then it will his responsibility. Accounting is not something static that begins and ends in one period, past records affect present and future records.

5 0

3 years ago

A wealthy benefactor just donated some money to the local college. This gift was established to provide scholarships for worthy

Mariulka [41]

Answer:

Worth of scholarship today = $1,000,000

Explanation:

The value of the scholarship can be determined using the present value of a growing perpetuity. A growing perpetuity is an indefinite annual payment that increases by a constant percentage.

The applicable formula is given below;

PV = A/r-g

A-annual payment one year from now - 35,000

r- interest discount rate - 9.,

g- growth rate - 5.5

The value of the gifts today

= 35,000/(0.09-0.055)

= $1,000,000

5 0

3 years ago

An air defense system can be divided into how many categories, depending on their role and type of target they are protecting?

castortr0y [4]

An air defense system can be divided into 2 categories.

Explanation:

The U.S. military relies on a variety of missiles launched from finger-held to vehicle assembled systems. The Air Defense Artillery was the anti-aircraft weapons branch (for example, surface-to-air rockets).

The Missile Defense Agency's purpose is to protect stationed forces, allies, and partners, via a layered missile defence system, against hypersonic and ballistic missile threats of all kinds.

For example, two strong radars have been used on a landing pad in the Pacific to detect ICBM, another on Wake Island. The destination also was tracked by satellites equipped with infrared sensors.

6 0

3 years ago

How much total money is paid for renters insurance in new york state every year?

Semenov [28]

Renter's insurance basic policy costs about $300 a year for around $50,000 worth of protection of your property within the building. In the state of New York.

8 0

3 years ago

The following situations relate to the demand curve for iPhones [normal good]. For each situation, state whether it is a change

julia-pushkina [17]

An increase in the income of 18-25 year olds would lead to an increase in the demand for iPhones.

The announcement made by Apple, would lead to a decrease in the demand for iPhone.

An increase in the price of iPhones would lead to a decrease in the quantity demanded of iPhones.

A decrease in the price of android phones would lead to a decrease in the demand for iPhone.

A demand curve is a curve that shows the relationship between the price of a good and the quantity demanded. A normal demand curve is downward sloping. This means that as prices increases, the quantity demanded would decrease.

Only a change in the price of a good leads to a change in the quantity demanded. This would mean a movement along the demand curve for the good. Other factors leads to a change in demand. This is shown by either an outward shift or inward shift of the demand curve. When demand increases, there is an outward shift. When demand decreases, there is an inward shift of the demand curve.

An increase in income would lead to an increase in demand for iPhone because iPhone is a normal good. This would lead to an outward shift of the demand curve.

As a result of the announcement, demand would decrease. This is because human beings would like to buy goods cheaper, so they would defer purchase to next month. This would lead to an inward shift of the demand curve.

An increase in the price of iPhones would lead to a decrease in the quantity demanded of iPhones.

If there is a decrease in the price of androids, there would be an increase in the demand for androids and a decrease in the demand for iPhone. This would lead to an inward shift of the demand curve.

To learn more, please check: brainly.com/question/16170188?referrer=searchResults

8 0

2 years ago