Answer:
D1 = $1.12
D2 = $1.25
D3 = $1.40
D4 = $1.48
D5 = $1.55
Explanation:
The formula to calculate dividends for next years is:
Where D_n is successive year dividend
D_(n-1) is previous year dividend
g is the growth rate (given as 12% = 12/100 = 0.12)
Initial dividend is $1, D_0
So, lets calculate the dividends for 5 years:
Year 1:
D1 = 1(1+0.12) = 1(1.12) = $1.12
Year 2:
D2 = D1(1+g) = 1.12(1.12) = 1.2544 = $1.2544
Year 3:
D3 = D2(1+g) = 1.2544(1.12) = 1.404928 = $1.404928
Year 4:
D4 = D3(1+g) = 1.404928(1+0.05)1.404924(1.05) = $1.4751744
Year 5:
D5 = D4(1+g) = 1.4751744(1.05) = $1.54893312
Answer:
The discount will not affect the net income as no gain is recognize nor expense.
the cash flow statemetn will decrease by 3,960 which is the cash used.
the balance sheet after the series of trasnactions, will show inventory for 3,960
Cash would have decrease by 3,960
No change on equity.
Explanation:
inventory 5,000 debit
accounts payable 5,000 credit
account payable 1,000 debit
inventory 1,000 credit
Account payable 4,000 debit
Inventory 40 credit
Cash 3,960 credit
B. You have health insurance with a $500 deductible.
Answer:
The statement which is not true about life insurance companies is:
B. They invest heavily in short-term highly marketable securities.
Explanation:
- The option A is true about the life insurance companies as they sell contracts that offer financial protection against premature death and against living too long as this the main purpose of a life insurance policy.
- These companies don't invest heavily in short-term highly marketable securities so the option B is not true about these companies.
- The option C is true about the insurance companies as they have prediction about their inflows and outflows.
- The option D is also correct as their liabilities are long-term in nature as the insurance policy is a long term policy.
Answer:Governments intervene in markets to address inefficiency. In an optimally efficient market, resources are perfectly allocated to those that need them in the amounts they need. In inefficient markets that is not the case; some may have too much of a resource while others do not have enough. Inefficiency can take many different forms. The government tries to combat these inequities through regulation, taxation, and subsidies. Most governments have any combination of four different objectives when they intervene in the market.
Maximizing Social Welfare
In an unregulated inefficient market, cartels and other types of organizations can wield monopolistic power, raising entry costs and limiting the development of infrastructure. Without regulation, businesses can produce negative externalities without consequence. This all leads to diminished resources, stifled innovation, and minimized trade and its corresponding benefits. Government intervention through regulation can directly address these issues.
Another example of intervention to promote social welfare involves public goods. Certain depletable goods, like public parks, aren’t owned by an individual. This means that no price is assigned to the use of that good and everyone can use it. As a result, it is very easy for these assets to be depleted. Governments intervene to ensure those resources are not depleted.
Macro-Economic Factors
Governments also intervene to minimize the damage caused by naturally occurring economic events. Recessions and inflation are part of the natural business cycle but can have a devastating effect on citizens. In these cases, governments intervene through subsidies and manipulation of the money supply to minimize the harsh impact of economic forces on its constituents.
Socio-Economic Factors
Governments may also intervene in markets to promote general economic fairness. Government often try, through taxation and welfare programs, to reallocate financial resources from the wealthy to those that are most in need. Other examples of market intervention for socio-economic reasons include employment laws to protect certain segments of the population and the regulation of the manufacture of certain products to ensure the health and well-being of consumers.
Explanation:
ok
