Answer:
c. Decrease liabilities and increase revenues
Explanation:
The correct adjusting journal entry which shall be recorded by the Duluth Co. in accounts in respect of advance income as as at December 31, is given below:
Debit Credit
Advance income(Liability) $2,000
($6,000/6*2)
Revenue $2,000
Since the liability has been debited in the above mentioned journal entry, which mean that it has been decreased and the revenue has been credited, which means that it has been increased.
So based on the above discussion, the answer is c. Decrease liabilities and increase revenues
Answer:
b. Maximize owner's wealth.
Explanation:
The owners wealth is usually measured by the financial behaviour of shares. In that sense we can find two reasons why is so important for the firm's management.
1. The managers recieve a greater compensation when the performance of the share increases their value. The managers have an incentive in order to keep the price of shares high.
2. Is a market oriented reason. For shareholders, consumers, banks and stakeholders, a good performance of the share is a positive signal for future investments, quality of the services and products and stability in the long run.
Answer:
The correct answer to the following question will be the "Lock-in effect".
Explanation:
- Lock-in effect is a concept that can be spoken about either indoor or outdoor economics. Unlike route dependency, lock-in arises in economics whenever an agent behaves in a certain way because it's more productive when considering change costs, although it might not be successful when considering change costs.
- Operating online shops, such as eBay, Amazon, etc, are infinitely more valuable to the buyer than modern resale sites. The basic economic reality is called the Lock-in Effect.
Therefore, Lock-in Effect is the right answer.
Answer:
$9.00
Explanation:
Note: See the attached file for the calculation of PV of year 1 to 7 dividends.
Price at year 7 = year 8 dividend / (Rate of return - Perpetual growth rate) = (0.5747245056 * 1.05) / (10% - 5%) = $12.0692146176
PV of price at year 7 = $12.0692146176 / (1.10)^7 = $6.19341546169015
Current price = Sum of PV of years 1 to 7 dividends + PV of price at year 7 = $2.81096656749202 + $6.19341546169015 = $9.00
In this case, there is likely a problem of <span>equality of outcome.
Equal outcome is a political concept where a certain group of people within a society unable to obtain the same results compared to other group given the same chance that exist in front of them. (This concept a little bit different with equal opportunity where those group of people may not receive the chance to begin with)</span>
