1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Assoli18 [71]
3 years ago
6

You are the CEO of Fisher Corporation. You are very concerned with presenting the best financial picture possible to the owners

of your company. Unfortunately, Fisher has a lawsuit pending at the end of the year, which could result in the company having to pay a large sum of money. On the bright side, Fisher also has business deal that might go through, which could result in the company making a large gain. The principle of conservatism would say that which of the following is true?
a. Fisher should not report the potential loss related to the lawsuit.
b. Fisher should report the possible gain from the business deal.
c. Fisher should report the potential liability it has related to the lawsuit.
d. Fisher should report the potential cash inflow it could receive from the business deal.
Business
1 answer:
Alik [6]3 years ago
4 0

Answer:

<u>c. Fisher should report the potential liability it has related to the lawsuit.</u>

<u>Explanation:</u>

Remember, the principle of conservatism is one that encourages businesses to prioritize their future losses in their financial reports over any future gains.

Therefore, based on the principle of conservatism, instead of reporting the business deal could result in the company making a large gain, Fisher should report the potential liability (losses) it has related to the lawsuit.

You might be interested in
GenX has a target capital structure of 40 percent common stock, 5 percent preferred stock, and 55 percent debt. Its cost of equi
AVprozaik [17]

Answer:

12.085 %

Explanation:

WACC = Cost of Equity x Weight of Equity + Cost of Preference Stock x Weight of Preference Stock + Cost of Debt x Weight of Debt

Remember to use the after tax cost of debt :

after tax cost of debt = interest x ( 1 - tax rate)

                                   = 8.00 % x (1 - 0.35)

                                   = 5.20 %

therefore,

WACC = 22.00 % x 0.40 + 8.50 % x 0.05 + 5.20 % x 0.55

           = 12.085 %

thus

the firm's WACC given a tax rate of 35 percent is 12.085 %

6 0
3 years ago
On december 1, milton company borrowed $480,000, at 8% annual interest, from the tennessee national bank. interest is paid when
Vlad [161]
Debit Interest Expense [$480,000 x 8% x 360/360] = $38,400.00
<span>Credit Interest Payable = $38,400.00</span>
5 0
3 years ago
Read 2 more answers
Which of the following is a contrary indicator?A) odd-lot tradingB) breadth of market and market volumeC) short-interest and the
garri49 [273]

Answer:

Short Interest and the Advance/Decline line

Explanation:

The Short Interest and the advance/descent line, also known as the AD line, is an indicator of market amplitude that gives the same weight to all the values ​​of an index or market. The advance/descent line, also known as the AD line, is an indicator of market breadth that gives the same weight to all the values ​​of an index or market.

The advance / descent line is an indicator of market breadth because it informs us of the general market movement. Similarly, when we say that it gives the same weight to all stock index values, we are saying that for the forward / down line all values ​​are equally important.

What really interests this indicator, being of market breadth, is to see if the price movement is accompanied by the movement of the indicator.

4 0
3 years ago
What does employable mean?
tester [92]

Answer:

Employable: suitable for paid work.

5 0
3 years ago
Read 2 more answers
Which type of HR professional uses various​ methods, including contacts within the community and print and online​ media, to sea
Alexus [3.1K]

Answer:

Recruiter is the correct answer.

Explanation:

Recruiter's job is to works with managers to find the qualified candidates that fill the vacant post as per requirement.

Recruiter HR professional responsibilities are to use a different method that includes updatings the ads for jobs, selecting the required candidates, to conduct the background investigation to find for fitted job candidates.

5 0
3 years ago
Other questions:
  • your local pawn shop loans money at an annual rate of 24 percent and compounds interest weekly. What is the actual rate being ch
    11·1 answer
  • Which is not one of the five basic elements of aâ paragraph?
    5·1 answer
  • A _____ documents the details of a functional primitive, which represents a specific set of processing steps and business logic.
    5·1 answer
  • . If the U.S. capital markets are not informationally efficient, ______.A. the markets cannot be allocationally efficientB. syst
    9·1 answer
  • Rexford Corporation produces three products, with costs and selling prices as follows: Product A Product B Product C Machine hou
    6·1 answer
  • Strolovitch has found that african american organizations are likely to
    12·2 answers
  • Maxine wishes to purchase a pair of running shoes made by her favorite brand. Her budget is limited, and she notices shoes made
    13·1 answer
  • Which of these companies exemplifies the globalization of markets? a. The clothes of Sea Shell Fashions, a U.S.-based company, a
    13·2 answers
  • Flint Company’s unadjusted trial balance at December 31, 2020, included the following accounts. Debit Credit Accounts receivable
    11·1 answer
  • What is the cost of equity for a firm that has a beta of 1.2 if the risk-free rate of return is 2.9 percent and the expected mar
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!