Answer:
C. moral hazard.
Explanation:
Moral hazard -
It is the condition , where the person take more risk , as he or she is aware that someone else need to bear the risk , is known as moral hazard .
In this case , one of the party can change the damage of other after any type of monetary transaction has occurred .
Hence , from the question ,
The statement given in the question , is about Moral hazard .
Economics because it has to deal with money, which is important for a career in business.
I feel stressed reading this question as it has no context but the question is asking for your opinion. there really is no wrong answer
Answer:
The new EPS is $ 3.16
Explanation:
In order to compute the earnings per share after the share repurchase the shares repurchased must deducted from the weighted average number of share of 320,000 before repurchase so as to arrive at the number of shares eligible for the earnings after such repurchase.
The number of shares repurchased=$634,000/$62.97
= 10,068.29
The average weighted number of shares after repurchase is 309,931.71 (320,000-10,068.29)
EPS after repurchase=$980,000/309,931.71
=$3.16 per share
Let understand that the organized table are intended to calculate missing numbers on Income Statement for the two companies are drawn below.
- Here, we are calculating missing columns for Monty Corp. and Whispering Winds Corp.
- Also understand that the bold numbers are the columns calculated according to the question.
Particulars Monty Corp. Whispering Winds Corp.
Sales revenue $90,000 $111,000
Sales return and allowance <u>$6,000</u><u> </u> <u>$5,000</u>
Net sales $84,000 $106,000
Cost of goods sold <u>$53,760 </u> <u>$65,720</u><u> </u>
Gross profit $30,240 $40,280
Operating expenses <u>$15,120 </u> <u>$19,080 </u>
Net income <u>$15,120</u><u> </u> <u>$21,200</u>
In conclusion, the formulae used to derived the bolded answers are:
- Sales revenue - Net sales = Sales returns and allowance
- Net sales - Cost of goods sold = Gross profit
- Gross profit - Operating expenses = Net income
- Net sales + Sales return and allowance = Sales revenue
- Net sales - Gross profit = Cost of goods sold
- Gross profit - Net income = Operating expenses
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