Answer:
Increasing current profits when doing so lowers the value of the firm's equity.
Explanation:
Agency problem is the likelihood that managers may place personal goals ahead of corporate goals. A characteristic feature of corporate enterprises is the separation between ownership and management. Thus, with the objective of survival, management would aim at satisfying instead of maximizing shareholder´s wealth.
Three generic agency problems arise in business firms:
-The conflict between the firm´s owners and its hired managers.
-The conflict between controlling and minority shareholders.
-The conflict between shareholders and non shareholders constituencies.
Answer:
Their relative fair values
Explanation:
The relative fair value method is mainly used in the determination of straight debt that is similar, warrantee, or tradable options. When different assets have been purchased, it is common for their purchase prices not to separate individually out the total cash that would be paid for these assets. But these assets will be most likely to be depreciated at rates that are not similar. Therefore, the relative fair value method will be the best and most effective technique that would be used in the allocation of total purchase costs for each of the available assets. This technique will depend mainly on the appraised fair market value for the assets being considers. The goal, in this case, is to allocate the total cost of purchasing through the use of relatively reasonable value methods as the main formula.
Asset allocation = (Purchase Cost) * (Asset FMV/Total FMV)
Where FMV is the Fair Market Value
Usually, a lump-sum purchase will occur where different assets have been acquired mainly from a similar price. Therefore, each of these assets will have to be recorded differently (fixed assets), specifically in an accounting record. To this, the purchase price will be allocated among the available assets acquired based mainly on the fair market values. Relative fair market value can be considered as a method of valuations in consideration of the assets of an acquired –business. In this case, a basket purchase price (lump sum) will be allocated to these assets. All the assets will be treated as a group. As a result, the relative fair value can help investors, particularly when it comes to choosing among different investments, particularly those that are available at any given time. The method will look mainly at relevant management, economic data, and footnotes, which are essential in the assessment of value relative of any given stock to its peer.
Answer:
c. can be implemented quickly, but most of its impact on aggregate demand occurs months after policy is implemented.
Explanation:
A monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country. In order to boost economic growth, monetary policy is used to increase money supply (liquidity) while it is also used to prevent inflation by reducing money supply.
Generally, money supply comprises of checks, cash, money market mutual funds (MMF) and credit (mortgage, bonds and loans).
Typically, a monetary policy can be implemented quickly by the central bank of a particular country, but most of its impact on aggregate demand occurs months after policy is implemented.
Answer:
The correct option is (D)
Explanation:
Cash flow statement comprises cash outflow or inflow from operating activities, investing activities and financing activities. increase in cash represents that inflow from these activities were more than outflows.
Beginning cash balance plus increase in cash gives closing cash balance. With closing balance and increase in cash, beginning balance can be computed. But, cash flow from investing activities cannot be computed as cash flow from financing activities is not given. There are two unknown variables.
Cash flow from operating activities and increase in cash will not help in computing cash flow from investing activities
Therefore, information provided is not sufficient to compute cash flow from investing activities.
Answer:
quantity always falls
Explanation:
In the case when the supply and the demand shifted to the left so the equilibrium would price would not be determined also the equilibrium quantity would decline or fall
So according to the given situation, the third option is correct as it shows the quantity fall situation i.e. considered and relevant too
