Answer:II) More risk-averse investors will invest less in the optimal risky portfolio and more in the risk-free security than less risk-averse investors. III) Investors choose the portfolio that maximizes their expected utility.
Explanation:The capital allocation line is a line created in a graph by investors in an economy to display or identify the potential risks involved in taking risky decisions. This line is one the determining factors to ensure that the investor has adequate knowledge about the risky nature of a capital investment.
Investors generally choose portfolios that guarantee maximum profits with reduced chances of loss. More risk averse investor will choose or opt for less risky portfolio.
Answer:
Break-even point in units= 33,333.33 units
Explanation:
<em>The break-even point (BEP) is the quantity of each product to be sold such that the business makes no profit or loss. </em>
The beak-even point can be determined as follows:
The Break-even point in sales = Total general fixed cost / Contribution per unit margin
Contribution per unit = Contribution margin ration × selling price
= 40%×11.25 =4.5
The break-even point (in unit) = 150,000/ 4.5
=33,333.33
break-even point in units= 33,333.33 units
Answer:
c. Liquidity is the ability to convert assets to cash.
Explanation:
The company's level of liquidity deals with the company's level of cash which is usually held to meet current obligations.
The liquidity ratios are ratios that indicate how well and quickly a company can convert current assets into cash for the settlement of current liabilities.
Examples of liquidity ratios include current ratio, acid test/quick ratio , cash ratio and working capital ratio.
Answer:
Gap between the supply curve and the market price.
Explanation:
Producers surplus refers to the surplus that a producer of a commodity can obtain. The producers surplus is the difference between the producer's willingness to accept the price and the actual price they have received.
Producers surplus = Actual market price - Willingness to accept the price
Graphically, it is the area between the upper portion of supply curve and the market price.
Question Completion:
Describe the accounting treatment of Supplies Expenses.
Answer:
Supplies Expenses are debited while the Supplies account is credited with the supplies expenses.
Explanation:
This accounting treatment of Supplies Expenses reduces the balance of the Supplies account by the amount of supplies used during the period. Thus, what is left in the Supplies account is the cost of the unused supplies at the end of the accounting period. The treatment also accords with the accrual concept, which requires that expenses are matched to the revenues that they generate in the period.
