Answer: c. 3%
Explanation:
The Insurance company guaranteed that the minimum rate that they will pay their policyholders as 3%. Just because the investments are now drawing only 2.5% due to the economic downtown does not absolve them of this agreement.
They must therefore still pay their policy holders the minimum return guaranteed which is 3%.
Answer:
q1 = 910
q2 = 910
Explanation:
Given:
Q = 2800 - 1000p
Marginal cost = $0.07 per unit
Q = 2800 - 1000p
Let's calculate profit of firm 1:
TR = p1 q1
MR = MC = 0.07
Cross multiplying:
2800 - 2q₁ - q₂ = 70
2800 - 2q₁ = 70 + q₂
2800 - 70 - 2q₁ = q₂
2730 - 2q₁ = q₂...............(1)
Let's calculate profit of firm 2:
TR = p₁ q₂
MR = MC = 0.07
Cross multiplying:
2800 - q₁ - 2q₂ = 70
2800 - 2q₂ = 70 + q₁
2800 - 70 - 2q₂ = q₁
2730 - 2q₂ = q₁................... (2)
Substitute 2730 - 2q₂ for q₁ in (1)...
Thus:
2730 - 2q₁ = q₂
2730 - 2(2730 - 2q₂) = q₂
2730 - 5460 + 4q₂ = q₂
-2730 + 4q₂ = q₂
-2730 = q₂ - 4q₂
-2730 = - 3q₂
q₂ = -2730/-3
q₂ = 910
Substituting 910 for q₂ in (2):
2730 - 2q₂ = q₁
2730 - 2(910)= q₁
2730 - 1820 = q₁
910 = q₁
q₁ = 910
The Cournot equilibrium quantities are: q₁= 910; and q₂ = 910
Answer:
ACME Drilling should record impairment loss of $6.9 million
Explanation:
According to GAAP, when the fair value of an asset is below the net carrying amount of that asset ( Asset's historical cost - Asset's accumulated depreciation or the net book value of the asset), the Company should record it as asset impairment loss.
In ACME's case, the net book value is $18.6 million while the estimated fair value is only $11.7 million meaning that the platform is actually worth less than it is recorded on ACME's book. Thus, an impairment loss of $6.9 million should be recorded ( $18.6 million - $11.7 million) to realize the fair value of the oil-drilling platform.
The sum of projected sum of future cash flows in this case is not suitable to be used to determine the oil-drilling platform because it has not been discounted to the present value amount, and also, it is not appropriate under GAAP.
Answer:
Negotiation
Explanation:
Liz and Moss disagree over the amount due under their contract. To avoid involving any third party in the resolution of their dispute, Liz and Moss might prefer to use the alternative dispute resolution method of negotiation.
Alternate Dispute Resolution methods include arbitration, mediation and negotiation.
<u>However of the 3 methods above arbitration and mediation involves the use of third party interference in the dispute resolution.</u>
<u>Therefore only negotiation is a viable means of alternate dispute resolution if the presence and interference of a third party is undesirable.</u>
