Answer:
The alignment of numbers in the first part of the question is off. However, you solve this question as shown below. The correct answer is C. $1,124.
Explanation:
This is a one-time cashflow type of question where the principal amount is invested once and no other addition is made to the account. You use the future value formula to solve the result of the compounding effect at year 3.
FV formula;
FV = PV(1+r)^n
PV = 800
discount rate; r = 12% or 0.12
total duration of investment; n = 3
therefore; FV = 800(1+0.12)^3
FV = 800 * 1.404928
FV = 1123.94
To the nearest whole dollar, the amount will grow to $1,124
The reason of choosing of investment with high risk instead of one with low risk because the high risks stocks, bonds are having more returns as compared to low risks, especially long term stocks.
<h3>What is high risk investment?</h3>
High risk investment is the one who have high chance of loss of capital or under-performance or have a great percentage of amount invested in some stocks.
Some high risk investments are Cryptocurrency, Individual Stocks, Initial Public Offerings, Venture Capital or Angel Investing, Real Estate and others.
Thus, The reason of choosing of investment with high risk instead of one with low risk
For more details about high risk investment, click here:
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Answer:
Economic costs include both explicit costs and implicit costs.
Explanation:
- In economics, costs can be in the form of explicit and implicit as implicit costs are opportunity costs and are opportunities for engaging in business. While the explicit costs are accounting costs which are involved in the production of raw matter, wages etc.
Answer:
d. Under Dodd-Frank, Jack and Jason will be required to pay back the extra compensation they received as a result of the falsified earnings.
Explanation:
Generally Accepted Accounting Principles (GAAP) earnings refers to standards that are commonly accepted and used financial reporting by publicly traded companies.
On the other hand, non-GAAP earnings refers ton an alternative accounting method employed by companies to measure the earnings especially by excluding one-time transactions like an organizational restructuring.
A non-GAAP method adjusts similar GAAP measure which are reported on the audited financial statements such as earnings before interest, taxes, depreciation and amortization (EBITDA) but it not backed by law.
Because non-GAAP measure is not backed by law, it can produce a misleading report when items that have impact on GAAP earnings are excluded.
As a result of non-GAAP method, many companies were affected during the Great Recession in the US leading to the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act (shortened to Dodd-Frank). the major aim of Dodd-Frank was to change federal financial regulatory agencies and almost all parts of the financial services industry of the US. One of the provisions of the Dodd-Frank is to require to pay back any compensation got through falsification of document.
Given the above, Jack and Jason will be required to pay back the extra compensation they received as a result of the falsified earnings under Dodd-Frank.
