Answer: TRUE
Explanation: Moral hazard refers to the situation when an individual starts taking avoidable risk unnecessarily when he or she is aware of the fact that any potential loss will be bore by the third party and not him.
Thus, if the manager is taking more and more risk knowing that they are insured is a clear example of moral hazard. Hence, the given statement is true.
Answer:
Ms. Jorgen will report only the Taxable gain and losses from the purchase and will not report the commission paid for by OP Inc
Explanation:
Gross Income Definition is total amount( the amount is $14500), in cash(the $14500 is cash) or otherwise ( asset value), Accrued to, received by or in favor of ( the amount of $14500 is in paid in favor of her) and must not be of a capital nature ( the commission is of a capital nature. Therefore it will not be reported as income.
Answer:
12%
Explanation:
initial investment $367,402
net cash flows 1 - 7 = $80,500
the IRR is the interest rate at which NPV = 0
we can calculate it by using Exhibit 13B-2 (present value of annuity in arrears)
$367,402 = $80,500 x present value of 7 year annuity in arrears
- present value of 7 year annuity in arrears at 14% = 4.288
- present value of 7 year annuity in arrears at 12% = 4.564
- present value of 7 year annuity in arrears at 8% = 5.206
with 14% ⇒ $80,500 x 4.288 = $345,184
with 12% ⇒ $80,500 x 4.564 = $367,402 CORRECT ANSWER
with 8% ⇒ $80,500 x 5.206 = $419,083
It would be overdraw because you’re gonna take money out of your bank account etc.
