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4 years ago

If a contract is illegal, may it be voided even if the actors knowingly signed to the terms of the contract?

Business

1 answer:

gregori [183]4 years ago

8 0

Answer: Yes, the contract is considered to be voided.

Explanation:

When a contract is void it has no effect so the parties to the contract need not abide by the terms of the contract. Some of the reasons which make a contract void are as follows:

The subject matter of the contract contains illegal content that is against the statutes and the public policy. The terms of contract are not clear or difficult to fulfill. Fraud, misrepresentation of facts or lack of consideration are other factors where the contract becomes void.

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Each bank must report its legal reserves as well as its deposit liabilities (depositors’ funds) to the __________________ in ord

zavuch27 [327]

Answer: Federal Reserve

Explanation: The Federal Reserve is USA's central banking system. The Federal Reserve is responsible for issuing money to banks in the US, and setting the policy on monetary affairs in America. In essence every bank operates under the Federal Reserve and because of this, must report their financial status, which includes their legal reserves and deposit liabilities to the Federal Reserve. This ensures that the banks comply with the reserves policy.

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4 years ago

Read 2 more answers

Risk acceptance is a natural part of driving. Risks are always present, and the compensation involves: Recognizing _____________

11111nata11111 [884]

Answer:

Balls

Explanation:

Balls

8 0

3 years ago

You have forecast pro forma earnings of $ 1 comma 031 comma 000. This includes the effect of $ 175 comma 000 in depreciation. Yo

AVprozaik [17]

Answer:

Forecast Free Cashflow: $

Forecast earnings 1,031,000

Add: Depreciation 175,000

Add: Decrease in working capital 108,000

Forecast free cashflow 1,314,000

Explanation:

Free cashflow is the aggregate of forecast earning, depreciation and decrease in working capital. Depreciation is added back to the forecast earnings because it does not involve movement of cash. Decrease in working capital is also added to the forecast earnings because it is an inflow of cash.

8 0

3 years ago

Air Tampa has just been incorporated, and its board of directors is grappling with the question of optimal capital structure. Th

irakobra [83]

Answer:

a. Unlevered beta = 1.12

b. Required rate of return on equity = 15.60%

c-1. rs = 16.37%

c-2. rs = 17.40%

c-2. rs = 18.81%

Explanation:

a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.

Levered beta = Unlevered beta * (1 + (D/S)(1 - T))

Therefore, we have:

Unlevered beta = Levered beta / (1 + (D/S)(1 - T)) .............. (1)

Where:

Levered beta = Jaxair's market-determined beta = 1.8

D = Debt ratio = 45%, or 0.45

S = Equity ratio = 1 - D = 1 - 0.45 = 0.55

T = Federal-plus-state tax rate = 25%, or 0.25

Substituting the values into equation (1), we have:

Unlevered beta = 1.8 / (1 + (0.45/0.55)(1 - 0.25)) = 1.12

b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity

Required rate of return on equity = ro = Rf + beta(Rm - Rf) .............. (2)

Where;

rd = Rf = 10%, or 0.10

beta = Unlevered beta = 1.12

(Rm - Rf) = market risk premium = RPM for an unlevered commuter airline = 5%, or 0.05

Substituting the values into equation (2), we have:

Required rate of return on equity = ro = 10% + 1.12(5%) = 10% + (1.12 * 5%) = 15.60%

c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.

c-1. $2 million debt

D = Debt = $2 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($2 * 15%) = $14.30 million

S = Value of equity = Value of lerevered firm - Debt = $14.30 - $2 = $12.30 million

rs = ro + ((ro - rd) * (D / S) * (1 - T)) ................... (3)

Where;

ro = 15.60%

rd = Rf = 10%, or 0.10

D = Debt = $2 million

S = Value of equity = $12.30 million

T = Tax rate at start-up = 15%, or 0.15

Substituting the values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (2 / 12.30) * (1 - 0.15)) = 16.37%

c-2. $4 million debt

D = Debt = $4 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($4 * 15%) = $14.60 million

S = Value of equity = Value of lerevered firm - Debt = $14.60 - $4 = $10.60 million

Substituting all the relevant values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (4 / 10.60) * (1 - 0.15)) = 17.40%

c-3. $6 million debt

D = Debt = $6 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($6 * 15%) = $14.90 million

S = Value of equity = Value of lerevered firm - Debt = $14.90 - $6 = $8.90 million

Substituting all the relevant values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (6 / 8.90) * (1 - 0.15)) = 18.81%

7 0

3 years ago

Which of the following provides a suite of integrated software modules for finance and accounting, human resources, manufacturin

IrinaVladis [17]

Answer:

b) ERP

Explanation:

Enterprise Resource Planning is a business management software that allows an organization to use a system of integrated applications to manage the business and automate many office functions related to technology. A typical example of an ERP is SAP ERP.

8 0

4 years ago