The correct answer to the following question is Substitution.
Equity can be defined as the shares or stock that a company issues to the public to get the financing and these stocks represent ownership interest in the company.
Debt can be termed as the amount of money that one party borrows from other party and that has to be paid in future. Almost all companies borrow money from public, or another company or banks to expand their company.
When stocks or anything valuable are exchanged or replaced for one's existing debt , then we call this process Substitution .
Answer:
The correct answer is letter "B": The rate of return decreases.
Explanation:
Net Present Value or NPV is a mathematical calculation used to determine if a project could be profitable or not. NPV is obtained by subtracting the present value of outflows from the present value of inflows, In case NPV is positive, it is expected a project will provide the firm profits, while a negative NPV implies the company incurring in losses.
<em>The Rate of Return (RoR) has an inverse relation with the NPV meaning if the RoR decreases the NPV will increase and vice versa.</em>
Using the Rule of 72, it would take 8.47 years to double at 8.5% interest.
The rule of 72 is very simple: divide 72 by the fixed interest rate to determine number of years it will take for an investment to double.
Answer:
Hire temporary employees to work on specific projects.
Explanation:
Human resource management is the process by which a business effectively manages its manpower needs to meet its organisational goals at a reduced cost to the business.
It involves the various strategies used to hire employees to meet business needs in a cost-effective way.
The construction division has a highly seasonal workload, with fewer projects in the winter than in the summer. Also, different expertise is needed for different kinds of buildings. So hiring a permanent workforce is counterproductive as they will be paid when there is no work to be done. The best strategy is to hire temporary workers. Also there is need for specialised staff to work on specific projects.
Answer:
d. There would be a decrease in the current account and an increase in the capital account.
Explanation:
The balance of payment in accounting typically comprises of capital account and current account, it is used for the recording of business transactions between two countries. Capital accounts are used to record any trade between two countries relating to financial assets and liabilities.
The current account is used to record trades relating to import and export of goods and services in a country.
Hence, if the U.S. government cuts back on government spending and increases taxes in an effort to reduce the budget deficit. The effect of these changes on the U.S. balance of payments is that there would be a decrease in the current account because it has no effect on the value of assets and liabilities, thereby affecting the export and import of goods and services.
Also, there would be an increase in the capital account due to the fact that the government tends to borrow more and seeks foreign investors.
