If prices are sticky and the number of dollars of gross investment unexpectedly increases, the AS curve will shift right.
What may shift aggregate supply to the right?As productivity rises or the price of important inputs decreases, the aggregate supply curve shifts to the right, allowing for a combination of lower inflation, higher production, and lower unemployment.
What causes the AS curve to change?Changes in inflationary expectations, variations in the labor force and capital stock, variations in government activity (which is not the same as government expenditure), variations in productivity, and supply shocks all affect how the short-run aggregate supply curve behaves.
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when a seller offers lower prices to those buyers who are willing to overcome some obstacle to get it, the seller is using to get buyers to reveal their . segment blocking; marginal benefit the hurdle method; marginal cost the hurdle method; reservation price impediment pricing; marginal benefit
When a seller offers lower prices to those buyers who are willing to overcome some obstacle to get it, the seller is using to get buyers to reveal their hurdle method and reservation price.
Professor of Economics Robert Frank is credited for developing the hurdle model. By using a hurdle system, purchasers with low minimum purchase prices are separated from those with higher so-called reserve prices. The consumer must be willing to overcome or leap over some sort of obstacle that poses an inconvenience in order to benefit from a cheaper price.
A reserve price, also known as a reservation price, is the lowest bid amount that a seller will accept as a successful bid in an auction. It is also occasionally referred to as the highest price a buyer will pay for a good or service.
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(true/false) conflict is a natural phenomenon of organizational life, but with the proper measures in place, it can be eliminated in the workplace. true false
Although conflict arises naturally in organizations, it can be avoided at work with the right policies in place. The assertion is accurate.
What does the term "workplace" mean?
A workplace is a place where someone performs work—either as their employer or for themselves. Such a location could be anything from an office to a sizable office complex or factory.
What three types of workplaces are there?
A job, an career, as well as a vocation exist. After working with hundreds of people over the course of my 20 years as a career coach, I can tell that that whatever you do for a living fits into one of the 3 groups.
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the pap's audio visual endorsement provides coverage for tapes, records, disc, and media up to $ while contained in an insured auto.
Coverage of tapes, records, and disk. The following insurance is modified by this endorsement: form for auto dealers coverage. Form for business auto coverage.
There is frequently misunderstanding regarding whether or not particular electronic equipment that has been "factory installed" is covered. Reviewing the aforementioned exclusions reveals that the term "factory installed" is absent from them. Radios, tape decks, and CD players must be "permanently placed" in order to be covered.
Only two of the many types of electronic gadgets under exclusion 5 are protected by the exception. One is a phone that is "permanently installed." Autos with TV monitors, VCRs (likely including the more recent DVDs), personal computers, and the other kinds described are all thus not included. With Endorsement, a buy-back of coverage is possible. PP 03 13 - Coverage For Excess Audio, Visual, and Data Electronic Equipment, Tapes.
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a contractionary fiscal policy is shown as a: group of answer choices rightward shift in the economy's aggregate supply curve. movement along an existing aggregate demand curve. rightward shift in the economy's aggregate demand curve. leftward shift in the economy's aggregate demand curve.
Contractionary fiscal policy occurs when the government cuts spending or increases taxes. It got its name from the way it deflates the economy. It reduces the amount of money available to businesses and consumers. This means government programs such as forest services, health services and the military receive fewer resources.
Contractionary fiscal policy is used to slow economic growth, for example when inflation rises too quickly. Constriction fiscal policy, the opposite of expansionary fiscal policy, raises taxes to reduce spending. When consumers pay more taxes, they spend less money, slowing economic stimulation and growth.
This will restrain economic growth and reduce inflation in the short term. Tightening monetary policy could lead to more unemployment, less borrowing and spending by consumers and businesses, and if applied too aggressively could ultimately lead to a recession.
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1. Rey is working at a part-time job while going to college. Out of the 80 hours per week that are available for work, Rey can work up to 30 hours per week in the school bookstore and make$20per hour. A. Draw a time allocation budget to reflect the choices available to Rey. Indicate with an indifference curve the choice to work 30 hours per week. B. The government has now imposed a tax on weekly income, although the first$100of income is tax-exempt. Show how this changes the time allocation budget, and use the indifference curve you drew for part a to indicate how this tax might impact the choice of how many hours to work. C. When Rey finishes college, what is likely to be the change in the work-leisure tradeoff?
An individual pays 20% in average weekly taxes, with a marginal tax rate of 37.5% during the final hour of work each week. The correct answer is Draw a time allocation budget to reflect the choices available to Rey. Indicate with an indifference curve the choice to work 30 hours per week.
The rate of taxation applied to taxable income for each extra dollar of income produced is known as the marginal tax rate.The application of marginal tax rates is divided into four taxable households and seven tax frames.For the most recent hour, the marginal tax rate is:Given the circumstances, Assessed in Taxes for Final Hour = $3 Hourly Wage $8. When we substitute the values in the marginal tax rate formula, we obtain.
Assessed in Taxes for Fina Earning Per Hour = Marginal Tax Rate.
For (b), the marginal tax rate is 37.5%.
$3 $8\sX 100
Tax Rate Marginal = 37.5%
Consequently, 20% is the appropriate number.
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which global facility type is set up in an area with an abundance of advance suppliers, competitors, and research facilities? which global facility type is set up in an area with an abundance of advance suppliers, competitors, and research facilities? outpost factory. contributor factory. server factory. offshore factory.
Outpost factory is set up in an area with an abundance of advanced suppliers, competitors and research facilities. The correct answer would be option A.
One could think of an outpost factory as an intelligence gathering unit. This means that an outpost factory is frequently located close to the main operations or headquarters of a rival, as well as close to the most picky clients or significant suppliers of special and vitally crucial parts. An outpost factory serves a purpose in production as well; it frequently doubles as a server and/or an offshore plant. The outpost factory is closely related to the concept of deciding which nations to operate in based on their strategic value rather than on a location's ability to produce goods. Maintaining and possibly even improving the global company's position in important nations is occasionally seen as a practical consideration.
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a normal good is: a good for which higher income causes an increase in demand. a good which is normally purchased by many consumers. a good for which higher income causes a decrease in demand. a good which is only purchased by high-income consumers.
A normal good is a good for which higher income causes an increase in demand. (first option)
What is a normal good?Normal goods are goods that have a positive relationship with the income of a consumer. Normal goods are goods whose demand increases when income increases and falls when income falls.
Inferior goods are goods whose demand falls when income rises and increases when income falls. Inferior goods have an inverse relationship with income of the consumer.
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A normal good is: a good for which higher income causes an increase in demand.
What Is a Normal Good?A normal good can be decribed as those good that experiences an increase in its demand due to a rise in consumers' income.
It should be noted that any increase that can be attributed to the wages, then will bring the demand for normal goods to increases while however the wage declines or layoffs lead to a reduction in demand, hence normal good serves as good for which higher income causes an increase in demand.
Therefore, option A is correct.
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question 10 as a project manager, you’re prioritizing stakeholders using a power grid. one stakeholder has high power and high interest. what level of engagement should the team have with the stakeholder
The level of management that the team should have with the project manager is c) manage closely.
Such stakeholders who are having high power should be managed closely as they can benefit the project in more than one way. When a business form is such that it prioritizes the stakeholders, then in such circumstances the project managers have the responsibility to deal closely with the stakeholder that has high power and high interest.
A stakeholder will be responsible for buying out many parts of the business or will make a valuable investment in it. Such a stakeholder that has high power should be managed closely.
Although a part of your question is missing, you might be referring to this question:
As a project manager, you’re prioritizing stakeholders using a power grid. one stakeholder has high power and high interest. what level of engagement should the team have with the stakeholder
a) show consideration
b) monitor
c) manage closely
d) meet the needs
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assuming all other elements are the same, what would most likely lead a global firm to purchase an item from an outside supplier?
The item to be manufactured is a non-essential item with little impact on the worldwide firm's key competencies or consumer expectations.
What are the customer's expectations?Customer expectations are any set of behaviors or activities that people expect when they interact with a firm. Customers have traditionally anticipated the essentials, such as quality service and fair pricing, but current customers have considerably greater expectations, such as proactive service, personalized interactions, and integrated experiences across digital channels. There are five degrees of consumer expectations: ideal service level, desired service level, adequate service level, anticipated service level, and zone of tolerance.
Expectations for Basic Customer Service.
To be heard, cherished, and appreciated.To make the procedure feel simple and uncomplicated.To observe that action is being made on the request or issue.To learn more about customer's expectations, click
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margaux is reviewing the corporate policy that stipulates the processes to be followed for implementing system changes. which policy is she reviewing?
Change control policy is being reviewed by Margaux.
The procedures and processes through which technology change is planned, approved, and implemented are governed by "change control" policy.
The objectives are to accept necessary change, prevent unnecessary change, and make sure all accepted change is implemented with the least possible impact on continuing operations. Keep reading to find out how to complete this substantial task.
Whether it has to do with system administration, hardware configuration, software upgrades, or other maintenance responsibilities, technology change is unavoidable.
IT change control is used to accommodate evolving business and technological needs and is a standardized IT management strategy that aims to maintain overall stability, security, and reliability.
Technology change can be disruptive as well as advantageous. Effective change management procedures must be created to maximize benefits and minimize difficulties.
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xanthippe has some money in his wallet, but he also has a checking account. this money can best be defined as
Xanthippe has some money in his wallet, but he also has a checking account. this money can best be defined as M1.
What Is M1?The money supply, or M1, is made up of cash, demand deposits, and other liquid deposits, such as savings accounts. Because it encompasses assets and currencies that are either already cash or can be swiftly transformed into it, M1 includes the most liquid parts of the money supply. The M2 and M3 categories, which include "near money" and "near, near money," cannot be converted to currency as rapidly.
M1 money, which is utilized as a medium of trade, is a nation's fundamental money supply. Demand deposits and checking accounts, the most widely used exchange mediums through the usage of debit cards and ATMs, are included in M1. The M1 definition is the most restrictive of all the elements of the money supply. Financial assets like bonds are excluded from M1. The money supply metric economists use the most to measure the amount of money in circulation in a nation is M1 money.
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hardware is adding a new product line that will require an investment of . managers estimate that this investment will have a 10-year life and generate net cash inflows of the first year, the second year, and each year thereafter for eight years. assume the project has no residual value. compute the arr for the investment
If West Hill Hardware is adding a new product line that will require an investment of $1,500,000. the payback period is: 5.56 years.
How to find the payback period?Amount after 5 years =$1,360,000
Total amount left= $1,500,000 - $1,360,000
Total amount left = $140,000
Now let find the payback period
Payback period = 5 years + (140,000 /250,000)
Payback period = 5 years + 0.56
Payback period = 5.56 years
Therefore the payback period is 5.56 years.
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The complete question is:
West Hill Hardware is adding a new product line that will require an investment of $1,500,000.
Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $300,000 the second year, and $250,000 each year thereafter for eight years.
The investment has no residual value.
Compute the payback period.
a(n) has a legal life of its own. a.corporation b.association c.sole proprietorship d.trade alliance e.partnership
corporation has its own legal existence.
Which type of business enterprise is created as a distinct legal entity?A corporation—also known as a C corp—is a legal entity distinct from its owners. Corporations are able to earn money, pay taxes, and deal with legal repercussions. Although founding a corporation is more expensive than creating other forms of companies, it offers owners the strongest defense against personal liability.
Continuity is another benefit of incorporation. The corporation can (at least theoretically) last eternally since it has a separate legal existence from that of its owners. It is simple for shareholders to transfer control of a firm by selling their stock to third parties.
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The returns on the common stock of New Image Products are quite cyclical. In a boom economy, the stock is expected to return 32 percent in comparison to 14 percent in a normal economy and a negative 28 percent in a recessionary period. The probability of a recession is 25 percent while the probability of a boom is 10 percent. What is the standard deviation of the returns on this stock?
19.94 percent
E(r) = (0.10 0.32) + (0.65 0.14) + (0.25 -0.28) = 0.053
Var = 0.10 (0.32 - 0.053)2 + 0.65 (0.14 - 0.053)2 + 0.25 (-0.28 - 0.053)2 = 0.039771
Std dev = 0.039771 = 19.94 percent
Returns on New Image Products' common shares are very cyclical. The returns for this stock have a standard deviation of 19.94%.
Why do you say "stock"?Any corporation's ownership certificates are referred to as "stock." A share can refer to either hand of a stock certificate for a certain company. You are regarded as a shareholder if you already own shares in a certain company. Common and preferred stocks are the two categories.
The stock process is what?Stock in Process refers to "raw stock" that has gone through any aging, seasoning, mechanical, or other manufacturing process but hasn't yet turned into finished stock. Over the long term, stocks provide the highest potential for capital gain for investors.
Briefing:E(r) = (0.10 0.32) + (0.65 0.14) + (0.25 -0.28) = 0.053
Var = 0.10 (0.32 - 0.053)2 + 0.65 (0.14 - 0.053)2 + 0.25 (-0.28 - 0.053)2 = 0.039771
Std dev = 0.039771 = 19.94 percent
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the software division of lamda co. has sales of $6,000,000, operating assets of $5,000,000, operating income of $600,000, and cost of capital is 9%. calculate residual income for the software division.
Residual income is $150,000, The money that still comes in after an initial time and resource commitment has been made is known as residual income.
What sort of income has a residual component?Net operating income $6,000,000
Average operating assets $5,000,000
Sales $6,000,000
Operating assets * 9% = $5,40,000
Residual income = $1,50,000
The money that still comes in after an initial time and resource commitment has been made is known as residual income. Artist royalties, rental income, interest income, and dividend payments are a few types of residual revenue.
Is extra money a salary?In essence, residual income is any extra money someone has left over after meeting all of their financial responsibilities. For instance, if a person earns a salary of $40,000 per year and pays off all of their obligations and household expenses with $30,000 per year, the remaining $10,000 is regarded as residual income.
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melanie quits her job to look for a better one that has opportunity for advancement. melanie will be classified in which category of unemployment?
Melanie quits her job to look for a better one that has opportunities for advancement. Melanie will be classified on Frictional unemployment.
What is frictional vs structural unemployment?People who experience temporary unemployment due to entering the job market or looking for a better position are said to be experiencing frictional unemployment. A mismatch between the skills held by job seekers and the skills required by employers leads to structural unemployment.
Short-term unemployment includes frictional unemployment. When someone actively seeks a job or a new career, they are said to be in a frictional state of unemployment. Unemployment that is only intermittent isn't always a bad thing.
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interest is $405 on a principal balance of $5,000; assuming a 7 month loan, what is the rate? round to the nearest cent or hundredth percent as needed.
The calculated interest rate is 13.89% per annum.
How do you calculate the rate?Relation between the simple interest(S.I) , principle(P), rate of interest (r)and time (t) is given by the formula,
Simple interest = Prt/100
Now, putting the values of P, r, t we get,
S. I = 500×r ×7/100×12 (Time is taken in years, so 7months equals to 7/12years.)
400= 3500/1200× r
r = 13.9%
So, the rate of interest was calculated and found to be 13.9%per annum.
What does consumer loan interest rates mean?Consumer loan interest rates are often expressed as an annual percentage rate (APR). For the right to borrow their money, lenders require a certain rate of return. An annual percentage yield (APY) is the interest rate that is earned on a savings account or certificate of deposit (CD) at a bank or credit union. For instance, the interest rate on credit cards is quoted as an APR.
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the mathis brand of televisions has a significant market share but spends proportionally less on advertising than competing brands. this is the case because
Beyond a certain volume of promotion, diminishing returns set in.
Reason: certain amount of promotion causes diminishing returns to occur.
What do marketing diminishing returns mean?
According to this, if you increase one of the inputs in a manufacturing or service process without raising the others, the additional returns per unit of that input will decrease. This holds true for all marketing strategies, including advertising, mailers, and even sales staff.
What do you mean by advertising?
A marketing strategy known as advertising involves purchasing real estate to advertise a good, bad, or intangible idea. Ads, as they are commonly known, are the real advertising messaging. Reaching the demographics most likely to be interested in purchasing a company's goods or services is the aim of advertising.
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suppose a tax per unit is imposed on this market and the new equilibrium quantity is 30. what is the tax per unit imposed in this market?
The sum of all taxes paid is known as tax revenue. This is the quantity sold multiplied by the amount of the excise (or per unit) tax.
What is the price and quantity in equilibrium before the tax is applied?Prior to the tax's implementation, the supply and demand curves intersect at the equilibrium price and quantity. As a result, $5 must be the price consumers pay and the amount producers receive before tax, and 12 pinckneys must be produced to achieve equilibrium.
What does a tax example by unit mean?In a per-unit tax, the tax base is specified in terms of a physical quantity rather than a monetary amount. If the federal government imposes a tax on each unit, for instance regardless of the price, buyers and/or sellers are required to pay an additional 10 cents for each gallon of gasoline sold.
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There are three important aspects that affect the ultimate performance of a team. Describe each of these: a) Organizational context b) Team design c) Team culture d) Which (one, two, or three equally) does a leader have the most control over?
Organizational context is the important aspect that affects the ultimate performance of a team and the leader has the most control over it.
The management strategies a team adopts to oversee not just the work its members do but also how people and groups interact, collaborate, assess, and plan are referred to as the team's organization. It also depends on the team's ability to establish clear goals and how those responsibilities are defined and understood in order to achieve goals in an efficient manner. Responses to questions concerning organization from team members can differ greatly depending on their personal perspectives and understandings. In some cases, a well-run weekly meeting may be sufficient to reassure team members of the team's organization.
In other cases, team members might not feel organized until they can delegate some of their work to a smaller group.
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Which of the following statements is correct?
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.
2.) The market value of a firm's debt and equity will continuously change throughout the day, but the book value of debt and equity tends to stay more stable over time. Consequently, the firm should use the book-value weight to define its optimal capital structure.
3.) A firm's after-tax cost of preferred stock may be significantly less than its before-tax cost, because issuing preferred stock dividends creates a tax shelter.
1.) A firm's weighted cost of capital should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and all other factors are held constant.
If a company's tax rate goes up, but all other variables stay the same and the yield to maturity of its noncallable bonds doesn't change, then its weighted cost of capital should go down. The right response in this case is option A.
The weighted average cost of capital (WACC) is the average rate an organization pays to finance its assets (WACC). It is determined by averaging the rates of all the company's capital sources and weighting the results according to the relative importance of each component.
They also overwhelmingly suggest that tax hikes can enhance government revenue, but frequently at the price of citizens' economic mobility and progress.
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what explanation might an economist provide why some people when such behavior can lead to health consequences?
Economist say they overvalue the utility from current choices.
Instead, behavioral economics uses both psychology and economics to investigate why people occasionally make illogical choices and why and how their behavior deviates from what economic models predict. Most people make decisions at some point in their lives on things like how much to pay for a cup of coffee, whether to go graduate school, whether to follow a healthy lifestyle, how much to put toward retirement, etc. The goal of behavioral economics is to clarify why a person chose option A rather than option B.
The given question is incomplete, the complete question is :
What explanation might an economist provide why some people smoke cigarettes when such behavior can lead to health consequences?
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what are some financing options for developers who do not have permanent financing committed before construction begins?
The developer might use his personal money or the money of his company to supply the necessary equity. Some funding options for developers include a combination of these three approaches.
What do you mean by financing?Finance is the process of creating funds or cash for any kind of spending. It involves allocating various financial resources, including as credit, loans, and cost of equity, to the areas of the economy that may benefit from them most.
Why is financing so important?Financing is essential to strengthening company finances since it allows companies to take chances and grow. Businesses used to be able to operate as they wished without receiving any financial help.
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diversion programs generally select already-sentenced probations and parolees and subject them to closer supervision in the community rather than regular probation and parole.
Diversion programs generally select already-sentenced probations and parolees and subject them to closer supervision in the community rather than regular probation and parole violation of supervision management strategies.
Strategic management strategies assist businesses to locate course and develop through a manner of evaluation, evaluation and then improvement that can assist to become aware of new enterprise dreams, set suitable and achievable targets, and help organizations to regain a aggressive aspect.
Examples of the useful strategy encompass product approach, marketing strategy, human aid approach, and monetary method. The purposeful method is concerned with developing a special competence to provide a enterprise unit with a competitive gain.
Strategic management is the ongoing making plans, monitoring, analysis and evaluation of all requirements an corporation needs to satisfy its goals and targets. modifications in business environments would require organizations to constantly check their techniques for fulfillment.
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part i during the current year, a donor gives $400,000 cash to the school and stipulates that the money must be held forever. any investment income earned on this money must be used to supplement faculty salaries. by the end of the current year, $31,000 has been earned and, of that amount, the school has expended $22,000 appropriately. at the end of the current year, the board of trustees also set aside $150,000 in unrestricted cash that must be held with income going to faculty salaries. what was the overall change in each of the following for the year?
a. Net assets without donor restrictions b. Net assets with donor restrictions
There is no net change in the presented problem's unrestricted net assets since the interest has been correctly used.
As of right now, 000 has been categorized as unrestricted net assets, and salary expenditure serves as an additional offset.
The investment, which is now worth $31,000, has been downgraded to $ 22,000 and classed as an unrestricted asset for the purpose of paying salaries since there is a restriction on the amount that may be used to pay salaries.
The $400,000 listed as a contribution to the school will be considered permanently restricted property. When money is kept for a longer length of time, it might be considered an investment and utilized to pay faculty salaries.
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Surf 'N' Sun Shop sells ski boats and other boating accessories.It receives most of its inventory about three months in advance of the summer season,but it is not able to pay for the inventory up front.Instead,its suppliers allow Surf 'N' Sun to use its inventory as collateral.This type of agreement is called
Choose correct answer/s
A unsecured short-term financing.
B long-term lending.
C factoring.
D secured short-term financing.
E a promissory note.
It receives most of its inventory about three months in advance of the summer season, but it is not able to pay for the inventory upfront. Instead, its suppliers allow Surf 'N' Sun to use its inventory as collateral. This type of agreement is called D) secured short-term financing.
Inventory is the goods or materials an enterprise intends to sell to customers for profit. stock management, a crucial detail of the delivery chain, is the monitoring of inventory from producers to warehouses and from those facilities to a degree of sale.
A skills inventory is a compilation of the abilities, schooling, and studies of contemporary employees. businesses use those inventories to assess whether the modern teams of workers can meet the organization's desires. know-how of the business enterprise's pool of modern abilities/competencies and destiny ability necessities aids in strategic making plans efforts.
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ashburn corporation issued 15-year bonds 2 years ago at a coupon rate of 6.6 percent. the bonds make semiannual payments. if these bonds currently sell for 115 percent of par value, what is the ytm? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
10.32% is the YTM value for the given question.
What is YTM?Yield to maturity (YTM) is the total rate of return a bond will have achieved after all interest payments and principal repayments have been completed. The internal return rate (IRR) on a bond if carried to maturity is essentially what YTM stands for.
Calculation:
Given the following :
Assume par value of $1000
Payment is made semi annually
Payment per period (PMT) = 115% of par value = [(6.6/100) × 1000] ÷ 2
= 66 / 2
= $33
Present value(PV) = 115% × 100 = $1150
Year of maturity = (15 - 2) = 13 years
Therefore, number of periods = 13 × 2 = 26
( since payment is made semi annually).
We can utilize the yield to maturity calculator online or the excel formula to reduce the computational complexity:
Using the online calculator :
Yield to maturity = 10.32%
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Which of the following generates a positive externality?
A) You buy a new car and find $5,000 in the door panel.
B) Your next-door neighbor mows the lawn at 6 A.M.
C) Your next-door neighbor installs a bat house and the bats eat mosquitoes.
D) Joe buys health insurance but decides not to take the time to get a flu shot.
The statement that generates a positive externality is when your next-door neighbor installs a bat house and the bats eat mosquitoes. The Option C is correct.
What is a positive externality?In economics, a positive externality is when the third party benefits from another party deciding to consume or produce a product or service. This turns into greater social benefit as the benefits are usually more widespread than a single individual, however a positive externality can also translate to private benefit which is the instance of an individual or single business entity receiving the benefit.
Also, a positive externality also occur on the production or consumption sides of the transaction involving a good or service.
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find the future value of an annuity due of $9,000 paid at the beginning of each 6-month period for 9 years if the interest rate is 4%, compounded semiannually. (round your answer to the nearest cent.)
$240,041.06 is the future value of an annuity due of $9,000 paid at the beginning of each 6-month period for 9 years if the interest rate is 4%, compounded semi-annually.
How to calculate future value of an annuity?
The current value of the annuity payable can be multiplied by (1 + r) n in the first alternative, where FV = PV (1 + r) n. The calculation is (1 + r) * P 1 - (1 + r) - n / r to determine the current value of the annuity payable. The second approach involves comparing the cash flows of an annuity due and a regular annuity.
A series of payments paid at regular intervals is known as an annuity. Regular savings account deposits, mortgage payments, insurance premiums, and pension payments are all examples of annuities.
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Which of the following statements is false regarding multiple acquisitions of a subsidiary's existing common stock?
A) The parent recognizes a larger percent of subsidiary income.
B) A step acquisition resulting in control may result in a parent recognizing a gain on revaluation.
C) The book value of the subsidiary will increase.
D) The parent's percent ownership in subsidiary will increase.
E) Noncontrolling interest in subsidiary's net income will decrease.
Any company's book value does not rise as a result of acquisitions. Only the company's operations can change book value. Fair value is impacted by acquisitions and mergers.
Hence, option (c) is false.
A company's book value is the net difference between its total assets and total liabilities, where book value reflects the total value of a company's assets that shareholders would receive if the company was liquidated.
They now possess a sizable portion of common stock as a result of numerous acquisitions, and as a result, receive a sizable portion of the subsidiary's income. Hence, option (a) is true.
After one purchase, the fair value of a subsidiary's shares often decreases. The parent will profit from the revaluation if they buy the remaining shares for less. Hence, option (b) is true.
More shares are obtained as a result of multiple acquisitions, increasing the percentage of ownership. Hence, option (d) is true.
Because the parent owns the majority of the shares, they have even fewer stakes in the subsidiary, and income is distributed proportionally to the stock held. Hence, option (e) is true.
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