Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer: $27,000
Explanation:
Even though for GAAP reasons, revenue is to be recognized only when earned as per the Accrual principle of accounting, this is not so for the calculation of taxable income.
Taxable income is to be calculated on cash basis which means that taxes are to be paid on revenue when the revenue is received in cash and not when it is earned.
As Ral Corp. received the money in 2020, they are to include the entire amount of $27,000 in their 2020 taxable income for rent revenue.
Answer:
E) Bright: No dominant strategy, Sparkle: Strategy 1
Explanation:
The payoff matrix above shows the profits associated with the strategic decisions of two oligopoly firms, Bright Company and Sparkle Company. The first entries in each cell show the profits to Bright and the second the profits to Sparkle. What are the dominant strategies for Bright and Sparkle, respectively?
Bright: No dominant strategy, Sparkle: Strategy 1
Answer:
1.56
Explanation:
Calculation for the market-to-book value
First step is to calculate for the P/E ratio
P/E ratio=1/12
P/E ratio= 0.0833
Now let find the market-to-book value using this formula
Market-to-book value = ROE percentage/P/E ratio
Let plug in the formula
Market-to-book value=0.13/0.0833
Market-to-book value= 1.56
Therefore the Market-to-book value will be 1.56
Answer:
The explanation is given as follows.
Explanation:
<u>Task 1: </u>
<u>The higher the percentage of assets a bank holds as loans, the higher the capital requirement.</u>
When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.
<u>Task 2:</u>
<u>It specifies a minimum leverage ratio for all banks
</u>
leverage ratio initially = total assets / capital = 1750 / 125 = 14
leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)
<u>Task 3</u>
<u>Its intended goal is to protect the interests of those who hold equity in the bank.</u>
Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.
