Answer:
<h2>A man buys a racehorse for $20,000 and enters it in two races. He plans to sell the horse afterward, hoping to make a profit. If the horse wins both races, its value will jump to $100,000. If it wins one of the races, it will be worth <em>$50,000.</em></h2>
Explanation:
Answer:
The value of the option to wait is $0.70,option A.
Explanation:
In calculating the value of the option to wait,I discounted all cash flows under both alternatives, using the discount rate of 12% as given in the question.
Option to start now gives net present value(positive return ) of $360.64 while the other one gives $361.34,invariably option to wait one year gives $0.70($361.34-$360.64) more than the option to start now.
The formula used in the calculating present value is PV=FV(1+r)^n
Where PV=present value
FV=future value
r=rate of interest
n=number of year
Find attached spreadsheet for detailed calculations.
Answer:
The correct answer is E, Information Resources.
Explanation:
Factors of production include Labor, Capital, Entrepreneurs and physical resources. But in the recent years, information has become the vital resource for organizations. Correct information and knowledge about a specific thing is crucial to the organization. For example if a company wants to introduce its new product and specifies a target audience, if the company doesn't get the accurate information about the needs and demands of that specific target area, other factor of production won't be of any use. So this information resource has become a vital and important part of the factors of production.
Answer:
a. Revenue recognition principle
Explanation:
The revenue recognition principle refers to the principle in which the revenues are recorded when it is realized or earned. It follows the accrual basis of accounting
It is not recorded when the cash is actually received.
When the sale is made, the same is to be shown in the books of accounts
Therefore as per the GAAP, the revenue should be addressed by revenue recognition
hence, the correct option is a.
