Entrepreneurs and other producers accept risks because they hope to earn PROFIT.
Every businesses are set up for the purpose of earning profits. Every venture has its accompanying risks of failure but if everything goes right, then the pay-off will be worth it.
High risks business also have high potential of generating high profit.
The criteria for distinguishing between whether an expenditure is a capital item or a deductible expense is the useful life of the item.
If the purchase is going to be used and no longer have value at the end of the reporting period it is an expense for that period. If the item is a capital item it is going to have a longer useful life. In this case the item is depreciated over its useful life, assigning an expense amount to each accounting period that the item has value.
<span>In a guaranty situation, the guaranty contract is between the person who agrees to pay the debt if the primary debtor does not and the original creditor.
The guaranty contract outlines the role of the </span>people in the agreement. It shows the lender to borrow agreement and obligation. This agreement serves as a document to make sure the lender has proof in value to get something in return from lending the money.
<span>b) With an adjustable rate mortgage, the interest rate always increases after the first five years
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