Answer:D
D, is the is the answer.
Answer:
A) are agreements by the borrowers to pay the lenders fixed dollar amounts at periodic intervals.
Explanation:
Debt contracts are formed when a borrower agrees to repay a lender. Convenants are usually used to settle disputes between the borrower and the lender. Convenants limits the the extent to which debtors take risks, dividend payouts, claim dilution, and other activities that can cause the lender to lose money.
Debt contracts are obtained by businesses to finance short term operations activities or long term expansion plans.
Answer: A) are agreements by the borrowers to pay the lenders fixed dollar amounts at periodic intervals.
Explanation: A debt contract is an agreement in which a borrower agrees to repay funds borrowed to a lender. Usually classes into a short-term and long-term debt contracts, they are used in raising money for working capital or capital expenditures and in return for lending the money, the individuals or institutions become creditors and receive a promise that the capital and interest on the debt will be repaid (usually in fixed amounts over a period of time) in accordance with the terms of the contract. Debt contracts include detailed provisions on collateral involved, interest rate, the schedule for interest payments, and the timeframe to maturity if applicable.
Answer:
True.
Explanation:
The cable company will not have any incentive to cut costs. This is because it knows that its costs will be averaged to determine the average cost to which a certain percentage is then added to arrive at the selling price. Having the cost averaged in this way will not motivate the cable company to seek cost minimization strategies that it could use to increase its income.
The statement is false. Under the average-cost pricing policy, the cable company has the incentive to cut costs to potentially lower prices and increase market share.
False, under the average-cost pricing policy, the cable company does have incentives to cut costs. The average-cost pricing policy allows the firm to set the price equal to the average cost of production. If the cable company can lower its cost of production, it will be able to lower the price it charges, which could potentially increase its market share and profits. Consider an example where economies of scale come into play: if each firm produced at a higher average cost due to building their own power lines, they would raise prices to cover this cost. However, if a firm found a way to reduce the cost of power lines or production in general, they could lower their prices in comparison to other firms. This demonstrates the incentive for cost-cutting under average-cost pricing.
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Answer:
Instructions are below.
Explanation:
Giving the following information:
Unit sales price $ 30
Variable cost per unit 6
Fixed costs per year 360,000
To calculate the contribution margin ratio, we need to use the following formula:
Contribution margin ratio= contribution margin / selling price
Contribution margin ratio= (30 - 6) / 30
Contribution margin ratio= 0.8
The break-even point in dollars formula is:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point in units= 360,000 / 0.8
Break-even point in units= $450,000
Now, the desired profit is $440,00:
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (360,000 + 440,000) / 0.8
Break-even point (dollars)= $1,000,000
Finally, the margin of safety:
Sales= 60,000*30= $18,000,000
Margin of safety= (current sales level - break-even point)
Margin of safety= 18,000,000 - 450,000
Margin of safety= $17,550,000
Answer:
b. Stocks that outperform the index in March always underperform it in April.
d. Stocks that outperform the index in March always outperform it in April.
Explanation:
The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.
Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.
Answer:
Convergence
Explanation:
Convergence meaning that the two different entities are coming together. It is also defined as the tendency of the group members to become more alike. It is also known as the company culture, in the sense, that the people who work there, tend to have the similar characteristics.
Therefore, the convergence is the phenomenon which states the shifting of the styles of the individual management in order to become more similar to one another.
Answer:
D) Has no effect on total equity but decreases retained earnings.
Explanation:
Dividends refer to the distribution of profits to the common stock holders.
This is basically an appropriation of profits.
When dividends are declared, then the retained earnings are reduced and a liability is created.
Announcing and declaring a dividend is a right to claim dividend by shareholders.
Thus, it do not affect the equity at all, but a liability is created and the moment dividend is paid liability is settled.