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SVETLANKA909090 [29]
3 years ago
8

The following two assets and payout data are given​ below: Asset A​: Pays a return of​ $2,000 20% of the time and​ $500 80% of t

he time. Asset B​: Pays a return of​ $1,000 50% of the time and​ $600 50% of the time. If both assets can be acquired for the same​ price, as a​ risk-averse​ investor, you would prefer
Business
1 answer:
andrew-mc [135]3 years ago
6 0

Answer:

I would prefer Asset B

Explanation:

A risk averse investor is the one who prefers lower amount of returns with known or specific risks instead of the higher amount of returns with unknown risks. So, from among the various level of risks, the investor will be preferring the alternative with the least interest.

So, in this case,

In Asset A: pay a return of $2,000 and at 20% of time and the $500 at 80% of time.

In Asset B: pay a return of $1,000 and at 50% of time and the $600 at 50% of time.

So, I would prefer, Asset B as it has low return but have a known risk that is of 50 -50.

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Muffin’s Masonry, Inc.’s, balance sheet lists net fixed assets as $18.00 million. The fixed assets could currently be sold for $
jeyben [28]

Answer:

                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

Explanation:

For book Value:

Net fixed assets=$18.00 million

Current Liabilities=$7.50 million

net working capital=$6.50 million

Formula:

Net working capital=Current assets-Current Liabilities

$6.50 million=Current assets-$7.50 million

Current Assets=$6.50+$7.50

Current Assets=$14 million

Total Assets=Net fixed assets+Current Assets

Total Assets=$18 m+$14 m

Total Assets=$32 m

For Market Value:

Net fixed assets=$27.00 million

Current Liabilities=$7.50 million

net working capital=$7.45 million

Formula:

Net working capital=Current assets-Current Liabilities

$7.45 million=Current assets-$7.50 million

Current Assets=$7.45+$7.50

Current Assets=$14.95 million

Total Assets=Net fixed assets+Current Assets

Total Assets=$27 m+$14.95 m

Total Assets=$41.95 m

                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

8 0
3 years ago
When assuming nonconstant growth in dividends, to avoid the problem of having to forecast and discount an infinite number of div
Sergio039 [100]

To avoid the problem of having to forecast and discount an infinite number of dividends, we must require that the dividends start to grow at a fixed rate in the future.

<h3>What are dividends?</h3>

Dividends are payments made by a company to its shareholders. This money is taken from the total profits made by the company. The remaining money after the payment of dividends goes to re-investment in order to grow the company.

Therefore, we can confirm that in order to avoid the problems presented in the question regarding dividends, we must require that they grow at a fixed rate in the future.

To learn more about profit visit:

brainly.com/question/1494270?referrer=searchResults

4 0
2 years ago
On July 1, a company paid the $600 premium on a one-year insurance policy with benefits beginning on that date. What will be the
Schach [20]

Answer:

$300

Explanation:

When insurance is paid in advance, the entries required are

Debit Prepaid Insurance

Credit Cash account

As time elapses and the insurance expires,

Debit Insurance expense

Credit Prepaid Insurance

Amount of insurance expense as at 31 December (6 months between 1 July and 31 December)

= 6/12 * $600

= $300

The insurance expense on the annual income statement for the first year ended December 31 is $300.

8 0
2 years ago
Question 6
Scilla [17]

Answer:

C)refusing to work until certain demands are met.

Explanation:

The idea behind a strike is to remind the employer or owner of the company that workers are a key part of the production. Strikes are an effective form of protest because they can paralyze a factory or a firm.

Strikes are usually more effective when the workers cannot be easily replaced by the employer.

7 0
3 years ago
On April 2, KLV sold $30,000 of inventory items on credit with the terms 1/10, net 30. Payment on $18,000 sales was received on
yuradex [85]

Answer:

b. debit to Accounts Receivable and credit to Sales Discount Forfeited for $120

Explanation:

The last payment of $12,000 it's without discount because was not made within the 10 days, so it's necessary to Debit Cash by $12,000 and reverse the accrual for the remaining $120 discount offered not applied.

The it's necessary to record this entry:

b. debit to Accounts Receivable and credit to Sales Discount Forfeited for $120

7 0
3 years ago
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