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NeTakaya
3 years ago
10

Assume that instead, the debtholders had negotiated a covenant based on the maximum amount of investment (so, they set a maximum

on the amount of investment, such as the $500in project costs). Assume that the probabilities and returns are proportionate (so, 40%probability that you double your money, and 60% chance that you lose your investment). What is the maximum amount of investment into this type of project that would allow shareholder and debtholder incentives to be aligned (should be less than $500 in this instance)?
Business
1 answer:
Ulleksa [173]3 years ago
3 0

Answer:

if we assume that the maximum investment must reach $ 500 Then the maximum that the shareholder should invest with $ 500  to not exceed the investment covenant, considering that these $ 500 have a 40% chance to earn $200. debtors should always consider the maximum amounts required in financial covenants.

E

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Flura [38]

Answer:

A) rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else's wants.

Explanation:

One of economics basic premises is that human beings are rational and act on self interest. That describes both the behavior of consumers who will always try to maximize their benefits at the lowest possible cost, and entrepreneurs like Alex who will try to increase their wealth by identifying and satisfying other people's needs and wants.

6 0
3 years ago
Selecting the first ART for launch is an important step when creating an implementation plan. Which factors should be considered
zepelin [54]

Based on business activities, the factor that should be considered when deciding which ART to launch first is "<u>Organizational change impact</u>."

<h3>Organizational change impact</h3>

The Organizational change impact is a change impact from the firm's business activities. These impacts could be any competitive advantage, business opportunities, working conditions, etc.

Therefore, to determine which ART to launch first, firms should consider the Organizational change impact to set the tone for further ART launch.

Hence, in this case, it is concluded that the correct answer is "<u>Organizational change impact."</u>

Learn more about Organizational change impact here: brainly.com/question/6235800

3 0
3 years ago
unlimited liability and separate taxation of the business are advantages of a sole proprietorship.true false
statuscvo [17]

Unlimited liability and separate taxation of the business are advantages of a sole proprietorship.

The statement is False.

<h3>What is taxation ?</h3>

In practically every nation on the planet, governments impose taxes as mandatory levies on people or organizations. Although it can be used for other things as well, taxes are typically utilized to finance government spending.

Taxes are imposed on tangible property, including real estate and business dealings like stock sales or home purchases. Taxes exist in a variety of forms, including income, corporation, capital gains, property, inheritance, and sales taxes.

A fundamental method for nations to produce public revenues that enable them to support investments in human capital, infrastructure, and the provision of services for residents and enterprises is through the collection of taxes and levies.

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4 0
1 year ago
Hiram is a debtor to Central Credit Union, a secured party. If Hiram fails to maintain insurance on the collateral, he has likel
valentina_108 [34]

Answer:

D). defaulted on the security agreement.

Explanation:

From the question we are informed about Hiram who is a debtor to Central Credit Union, a secured party. If Hiram fails to maintain insurance on the collateral, he has likely defaulted on the security agreement.

A security agreement as regards to the law of the United States, can be defined as contract which governs the relationship that exist between the parties that are involved in a kind of financial transaction that is been known as a secured transaction. It gives lender kind of security interest as regards to a specified asset/property which is has been pledged as collateral. Security agreements do compose of

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6 0
3 years ago
You have $14,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14 percent and Stock Y with
larisa86 [58]

Answer:

Investment in stock x = $7816.67

Investment in stock y = $6183.33

Explanation:

The computation of invest in Stock X and Stock Y is shown below:-

Let the weight be x

x × 14% + (1 - x) ×8%

= 11.35%

0.14x + 0.08 - 0.08x

= 0.1135

0.14x - 0.08x

= 0.1135 - 0.08

0.06x = 0.335

x = 0.335 ÷ 0.06

x = 55.83%

Investment in stock x = x × Stock portfolio

= 55.83% × $14,000

= $7816.67

Investment in stock y = 1 - 0.5583 × $14,000

= $6183.33

4 0
4 years ago
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