Answer:
b. She should develop herself as the EMV of developing is $1.125 million, which is higher than the EMV of selling.
Explanation:
The probability of discovered oil = 0.25 (25%)
Selling the exploration right= Selling Price + Probability of discovered oil × Royalty% × Future Profit
= $200,000 + 0.25 × 0.25 × $7,500,000 = $668,750
Developing = Probability of finding the oil × Future Profits - Cost of Well
= 0.25 × $7,500,000 - $750,000 = $1,125,000
= $1.125 million
Therefore the EMV for selling the exploration rights is less than the developing, the landowner will develop the site by his own.
Answer:
C. decrease
Explanation:
In the case when the money demand and the money supply model is used so the open market purchase would result the interest rate of equilibrium to decrease as if there is an open market purchase so it rise the money supply due to which the supply curve of the money move shiftward
Therefore the rate of interest should be decreased
Answer:
debit Accounts Payable $800; credit Merchandise Inventory $16; and credit Cash $784
Explanation:
Since Jello's Market purchased $1,000 of goods on account with terms of 2/10,n/30, and they returned $200 of the goods due to defect the next day.
Since the goods are paid fr the next day, if falls within the settlement for discount date which is 2% within 10 days
If Jello pays for the purchase within the discount period and uses the perpetual inventory system, the required journal entry to record the payment would: debit Accounts Payable $800; credit Merchandise Inventory $16; and credit Cash $784.
This would be the case because accounts payable account would have been credited since the goods were not bought for cash but on account, and the would be $1000 less $200 returns, which is $800.
The discount of 2% x (1000 - 200 returns) would be $16 and posted directly to inventory, since it is a perpetual inventory system.
The actual amount paid is credited to cash, which is $1000 - $200 returns - $16 discount
Answer: d) Dutch auction
Explanation:
Dutch Auction refers to a type of Public Offering in which the issuing company holds a sort of auction and receives bids on the shares that it has in. Using these bids they are able to set a price for the stock which is the highest price received.
However, the bids are based on the amount an investor can buy in terms of quantity and price. The lowest acceptable bid is then charged on all the stock and is called the Uniform auction price which is what Blue Stone paid thereby making this a Dutch Auction.
