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3 years ago

Choose the correct answer in the following statements about financial and real assets.

Business

1 answer:

lora16 [44]3 years ago

3 0

Answer: Please refer to Explanation

Explanation:

A financial asset is a non-physical asset that that gets it's value from a contract that was signed by the parties involved. Financial assets include Bonds, stocks and even cash amongst others.

Real Assets on the other hand are physical assets that can be seen and hence have an inherent value. Examples include buildings and cars.

a. Toyota creates a real asset- the factory. The loan is a financial asset that is created in the transaction.

The factory becomes a real Asset that is tangible and has an inherent value. The loan was created by an agreement between Toyota and the bank and so is a Financial Asset.

b. When the loan is repaid, the financial asset is destroyed but the real asset continues to exist.

When the loan is repaid, Toyota no longer owns that financial asset because it has gone back to the bank. However, the Real Asset which is the factory that they were able to build will remain with Toyota.

c. The cash is a financial asset that is traded in exchange for a real asset, inventory.

As already mentioned, cash is a financial asset. Inventory is a tangible substance with an inherent value not determined by a contract and so is a Physical Asset. Trading cash for Inventory is therefore trading a financial asset for a physical one.

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Roberto Company uses a perpetual inventory system. On December 1, the company purchased $3,300 of merchandise for cash. Complete

Montano1993 [528]

Answer:

December 1, 202x, merchandise purchased for cash

Dr Merchandise inventory 3,300

Cr Cash 3,300

Explanation:

When a company uses a perpetual inventory system, any purchases or sales are recorded directly using the appropriate inventory account. When a company uses a periodic inventory system, you should use a purchase account instead.

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2 years ago

A news release for a diet product company reports: There's good news for the 65 million Americans currently on a diet. Its study

dexar [7]

Answer:

C. biased, understating the effectiveness of the diet.

Explanation:

As the company promises the population of America which is too huge, just on the study based on 20 employees of the company itself.

This clearly means that the company is trying to sell the product with false reports as the sample size of study is to small to represent entire American Population.

Further that too the employees could be influenced to get the false results.

As since the employees could be influenced and that the results can be altered accordingly, the report is biased, and is misleading.

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2 years ago

Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash f

Nataliya [291]

Answer:

The net present value of this project is $13,587,962.96

Explanation:

The Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows from a decision. A positive NPV indicates a profitable investment and a negative the opposite.

We can be work out the NPV of Turnbull Corp as follows

Present Value

Year 1 13000,000× *(1.2^(-1) = 10,833,333.3

Year 2 23,000,000 × 1.2^(-2) = 15,972,222.22

Year 3 29,000,000 × 1.2^( -3) = 16,782,407.41

Total PV of cash inflows 43,587,963.0

Less the PV of cash outflow (30,000,000)

Net Present Value (NPV) 13,587,962.96

The net present value of this project is $13,587,962.96

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3 years ago

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3 years ago

Many states tax cigarette purchases. Suppose that smokers are unhappy about paying the extra charge for their cigarettes. If the

Llana [10]

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3 years ago