This situation is known as cannibalization. Cannibalization is a marketing strategy that refers to the reduction company's see in there sales volume, revenue or market share of a current product when they release a new product. When a company releases a new product, those who are fans of their other products will likely try the new product instead of the hold which initially brings down the volume they sell and make from the initial product.
The given statement " A director violates the corporate opportunity doctrine if he or she competes with the corporation, unless the disinterested directors approve of the director's actions " is TRUE
Explanation:
A business opportunity applies to any business opportunity that a client may gain.
The Corporate Opportunity law controls the moral responsibility of directors, managers and managing stockholders in an organisation, with loyalty responsibilities, not to misuse such incentives without first offering to the corporate board the right to reject the opportunity on behalf of the company.
When these actions are broken and a director of the company takes the chance, then the trustee has abused his obligation to be trustworthy and will be able to maintain a constructive trust with the proceeds arising from the incorrect transaction.
Answer:
The answer is option A) Diversification merits strong consideration whenever a single-business Is faced with diminishing market opportunities and stagnating sales in its principal business company
Explanation:
Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories. It aims to maximize returns by investing in different areas that would each react differently to the same event.
It's important to diversify among different asset classes. Different assets such as bonds and stocks will not react in the same way to adverse events. A combination of asset classes will reduce your portfolio's sensitivity to market swings. Generally, bond and equity markets move in opposite directions, so if your portfolio is diversified across both areas, unpleasant movements in one will be offset by positive results in another.
Answer:
Total FV= $29,335.25
Explanation:
<u>First, we need to calculate the future value of the initial investment ($2,500) using the following formula:</u>
FV= PV*(1 + i)^n
PV= $2,500
i= 0.0075
n=10*12= 120 months
FV= 2,500*(1.0075^120)
FV= $6,128.39
<u>Now, the future value of the $1,500 annual deposit:</u>
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
We need to determine the effective annual rate:
Effective annual rate= (1.0075^12) - 1= 0.0938
FV= {1,500*[(1.0938^10) - 1]} / 0.0938
FV= $23,206.86
Total FV= $29,335.25
Answer:
<em>Computation of the interest expense using the equation as shown below:
</em>
Interest expense for year 1 = Notes payable * Interest rate
= $100,000 * 10%
= $7,000
Notes payable reduction in Year 1 = $14,238 - $7,000
= $7,238
General journal entry
Item Debit Credit
<em>Notes payable $7,745</em>
Interest expense $6,493
Cash $14,238
Workings
Interest expense = ($100,000 - $7,238) * 7%
= $92,762 * 7%
=$6,493
