Answer:
Buffett is concerned about debt in business as they analyse the financial statement of business before acquiring it or investing in it, as it suggest the future financial position of the company and it´s ability to generate consistent earning for the company. They focus on return on equity rather than debt, as regulatory body, credit agencies, and creditors use financial statement to decide on company´s worthiness by evaluating company´s debt and lending term. Debt become obligation for the company and its shows weak accounting and financial position of the company. The warren buffett´s investment policy is to acquire and hold companies for long run, therefore return on equity is a better parameter to evaluate any company.
Answer:
Letter c is correct. <em>Scalar principle</em>
Explanation:
Scalar principles follow the classic management model, where each employee must communicate with executives following the chain of command, respect hierarchy and communicate through an intermediary or immediate. This management rule model can have the disadvantages of less flexibility and more rigid communication, which makes interaction between employees and conflict resolution and motivation to develop individual skills and competences more difficult.
Answer:
a) Threat of substitute products.
Explanation:
<em>The threat of substitute products is one of the factors that fuels competition in the industry as explained by porter's five forces. This is threat that a similar product or service can reduce the return the return on investment for a business if customers switch to such product because they consider such as more valuable in terms of product offering like price and value.</em>
<em>Kodak, for example has lost its market for for film because customers had switched to the use of more advanced photography technology that do not require use of film.</em>
Answer:
$11,000
Explanation:
One IBM March 20 put contract is purchased at a premium of $10
Therefore the maximum profit that will be gained from this strategy can be calculated as follows
= 100(120-10)
= 100(110)
= 11,000
Hence the maximum profit is $11,000
