I understand it that they cannot control their cost increases because they cannot for example increase the prize of the service they provide.
This means that they will have less money if some costs increase, for example if the prize of gas increases. Therefore, the salaries will be lower, since there will be less money to distribute.
Answer:
option d) debit to Bad Debt Expense for $7,200
Explanation:
Data provided :
Total estimated uncollectible receivables of the company = $ 7,900
credit balance for the allowance for doubtful accounts = $ 700
Therefore,
the net bad debt expenses of the company = $ 7,900 - $ 700 = $ 7,200
Hence,
the<u> correct answer is </u><u>option d) debit to Bad Debt Expense for $7,200</u>
Answer:
Lower Bound (Minimum Value) of Put Option = Max. of ( 0 , S * E-rt - C) (In Bold is PV of S)
where, C = Spot Price / Current Price , S = Exercise Price/ Strike Price, Rf= Risk free rate , t is tenure in pa, E is Exponential
= Max. of (0, 30 * E-rt - 35)
= max. of (0, 28.5 - 35) = Max of (0, -6.5)
Thus 0 is the Minimum Bound.
At below 0 say -0.1 (Impracticle Put Buyer will never receive OP)
At Above 0 say 0.1; Gain/ Loss = PV of 30 -35 - OP =28.85 -35 - 0.1 = -6.25 Loss i.e No Arbitrage Opportunity.
Explanation:
