Answer: $250
Explanation:
From the question, we are told that Elmo Johnson was late on his property tax payment to the county and that he owed $7,500 and paid the tax four months late.
We are further told that the county charges an annual penalty of 10%. The amount of the penalty for the four-month period goes thus:
Annual penalty = 10% × $7500
= 0.1 × $7500
= $750
Since he is four months late and there are twelve months in a year, this will be:
= $750 × 4/12
= $750 × 1/3
= $750/3
= $250
Answer:
The answer is option A, There is more credit risk when the yield curve is upward sloping than when it is downward sloping
Explanation:
Solution
In an interest swap rate, when we receive floating, and pay fixed, in upward sloping yield curve, we are going to receive increase of cash flows and therefore going to pay fixed and so, the counterpart will be at a loss in slopping upward yield curve, and hence, we will have a credit risk that will be greater.
Answer:
Option (b) Decline 20%
Explanation:
Data provided in the question:
Firm X has declared a stock dividend that pays one share of stock for every five shares owned
Therefore,
The increase in number of shares
= [ 1 ÷ 5 ] × 100%
= 20%
Thus,
The earnings per share will decrease by the amount of increase in number of shares i.e decrease by 20%
Hence,
Option (b) Decline 20%
Answer:
Correct option is C.
<u>Maximum potential loss from this position is $800</u>
Explanation:
Premium paid for call option = $6 * 100 = $600
Premium paid for put option = $2 * 100 = $200
Total cost = $600 + $200 = $800
In case the price of underlying stock falls below $75, call option will be exercised. If the price rises above $75 cal option would be, exercised. In case price stays at $75, nothing would be done. In any case the amount lost cannot exceed the cost of $800 that has been paid for the options.
Depreciation is a way not only to recognize the lost value over time of an asset, but also a way to recognize the expense of the asset over time. To this end, we want to see the value of the asset get smaller, and a piece of the asset on the the income statement ever period.
The depreciation base is 95,000 -5,000 = 90,000, and the depreciation period is 90,000/15,000 = 6 years.
The journal entry every year will be
Dec. 31
Debit: Depreciation expense 15,0000
Credit: Accumulated Depreciation (15,000)
Accumulated depreciation is a *contra-asset* account on the balance sheet that reduces the value of the the depreciable asset.
