<span>Active endeavors specializes in sporting equipment. Recently, it has decided to add to its business units by opening a steakhouse near a convention center. This strategy is an example of: conglomerate diversification.
Conglomerate diversification is a growth strategy when organizations add new products or services that are vastly different from anything they've sold prior. These new business opportunities are unrelated to their previous and operate completely different.
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Answer:
Unrealized gains and losses treatment:
Available for sale - recorded in OCI
Held till maturity - not recognized in financial statements until maturity
Held for Trading - Fair value through profit and loss
Explanation:
There are three categories of financial instruments. Available for Sale AFS, Held for trading HFT and Held till maturity HTM. Financial instruments are classified in these categories and then treatments is according to their classification. IAS 39 and IFRS 9 have provided complete guidelines for the treatment of the financial securities.
Answer:
C) Decrease the acid-test ratio
Explanation:
The quick ratio is also called acid test ratio. It is a liquidity ratio that measures level of liquid assets of a business.
That is the amount of cash or near cash assets it has to settle it's current debt.
Mathematically
Quick ratio = (Current assets - Inventory) ÷ Current liabilities
If cash (current asset) is used to buy Inventory. Cash will reduce and inventory will increase.
The value of (Current asset - Inventory) reduces.
As the numerator in the ratio reduces, the quick ratio also reduces.
Answer:
$60
Explanation:
The computation of price is shown below:-
Producer Surplus = Price paid by consumers - Production cost
$100 = Price - ($15 + $25 + $40)
$100 = Price - $80
Price for all = $100 + $80
= $180
Price Per consumer = Price for all ÷ First three lawns
= $180 ÷ 3
= $60
Therefore, for computing the price per consumer we simply divide first three lawn by price for all.
Answer:
Yanta Co. has a higher exposure to exchange rate risk than Diz Co.
The reason is that Yanta Co. does not have net inflows of euros. Instead, its euro transactions yield net outflows.
It will always be in need of euros to settle its foreign debts or obligations, unlike Diz Co. with foreign assets.
Explanation:
a) Data and Analysis:
Diz Co. has net cash inflows of euros and net cash inflows of swiss francs
Yanta Co. has net cash outflows of euros and net cash inflows of swiss francs
b) Exposure to exchange rate risk or currency risk is the financial risk arising from fluctuations in the value of the US dollars against the Euro or Swiss Francs in which Diz Co. has some foreign assets while Yanta Co. has foreign obligations.
