$250,000
$1,458 x 12
Months = 17,496
17,496/0.07
=$249,942
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.
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Answer:
Correct option is (c)
Explanation:
Market interest rate and price of the bond are inversely related.if market interest rate falls and is lesser than stated interest rate (coupon rate), then the bond becomes attractive and its price increases. So, bond can be solved at present higher than the maturity value. This is the reason bond is redeemed before maturity.
On the other hand, if market rate increases, bond becomes less attractive as investors can earn more by investing at market interest rate. So price of bond falls and there is no point redeeming it before maturity.
Answer:
$94,610
Explanation:
Invested assets (A) = $1,103,000
Sales = $1,278,000
Income from operations (I) = $238,000
minimum rate of return (r) = 13%.
Residual income (RI) is the generated income that exceeds the minimum rate of return and can be defined as:
The residual income for Mason Corporation is $94,610