Answer:
The risk premium = 6.765%
Explanation:
Required rate of return (r) on Cachapa International's stock = 0.045 + 1.23 * (0.1 - 0.045) = 0.11265 or 11.265%
The risk premium on a stock is the additional return that is expected from the stock based on the risks it carry.
It is simply calculated by deducting the risk free rate from the required rate of return (r) of the stock
Thus, the risk premium on Cachapa's stock is = 11.265 - 4.5 = 6.765%
Not being able to pay it off is a big one.
Answer and Explanation:
The computation of the predetermined overhead rate in the following cases are shown below:
As we know that
Predetermined overhead rate = Estimated overhead ÷ activity level
1.
= $203,000 ÷ 58,000
= $3.50 per direct labor hour
2.
= $203,000 ÷ $1,015,000
= $0.20 per direct labor dollar
3.
= $203,000 ÷ 14,500
= $14.00 per machine hour
<span>This allows for individuals to be encouraged to undertake certain tasks that will better themselves and society as a whole. These deductions make it more likely that a person will give to charities as well as contribute income toward their needs at the end of their careers.</span>
Answer:
c. Economic entity assumption
Explanation:
There are various assumptions and principles out of which few are given below:
1. Expenses recognition principle: According to this, the expenses of a particular year would be recorded on that year itself as the sale is recorded for the particular year
2. Full disclosure principle: According to this, all the important information should be disclosed by the company which can change the decisions of the users of the company
3. Economic entity assumption: According to this, the business activities or record keeping should be separate from its owners, shareholders, etc.
4. Going concern assumption: According to this, the business should be run for a longer time or forever. It will keep the business in running and there is no intention to closed or liquidate it.
In the given situation, the most appropriate option is c.