Futures contracts are traded on exchanges while forward contracts are not. Futures contracts are standardized and publicly traded on futures exchanges while forward contracts are private agreements traded over the counter.
Explanation:The correct answer is C: Futures contracts are traded on exchanges, but forward contracts are not.
Futures contracts are standardized agreements to buy or sell an asset at a predetermined price on a specified future date, and they are traded on futures exchanges. These exchanges provide the marketplace where these contracts are bought and sold, thus making them easily accessible to interested parties.
In contrast, forward contracts also involve an agreement to buy or sell an asset at a predetermined price on a specified future date. However, forward contracts are not traded on exchanges. Instead, they are private agreements between two parties and are contracted in the over-the-counter (OTC) market where they can be customized to fit the specific needs of the contracting parties.
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______________ occurs when workers deliberately slow down their pace or restrict their work output.
A. Job loitering
B. Chugging
C. Reinforcing
D. Lagging
E. Soldiering
Answer:
correct option is E. Soldiering
Explanation:
solution
Soldiering occurs when workers deliberately slow down their pace or restrict their work output because soldering is that process in which 2 or 2+ items are joined together for better output
it was the concept of father of scientific management ( Frederick W taylor) when he was working in steel company he use game of soldiering when he going to make bigger output
so here correct option is E. Soldiering
Soldiering occurs when workers deliberately slow down their pace or restrict their work output. The correct answer is option E. Soldiering.
Soldiering, a term popularized by Frederick Winslow Taylor in the early 20th century, refers to the intentional effort by workers to reduce productivity. This behavior can arise from various reasons, such as dissatisfaction with management, unfair wages, or to maintain current job levels and avoid layoffs due to perceived overproduction.
Workers might engage in soldiering to protest working conditions or express dissatisfaction with management practices. By limiting output, they aim to pressure employers into addressing grievances, such as inadequate pay or poor working environments.Another reason for soldiering is to prevent the establishment of high productivity expectations. Workers may fear that if they consistently perform at higher levels, management will raise output standards, making it difficult to maintain those levels without undue stress or risk of job cuts. Thus, soldiering serves as a tactic to manage workload and job security.essler Manufacturers made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.75 a share. Secondly, all dividends after that will decrease by 1.5 percent annually.
What is the maximum amount you should pay to purchase a share of this stock today if you require a 14 percent rate of return?
1. $11.29
2. $12.64
3. $13.27
4. $14.00
5. $14.21
Answer:
1. $11.29
Explanation:
maximum amount you should pay to purchase a share of this stock today
= 1.75/(0.14 + 0.015)
= $11.29
Therefore, The maximum amount you should pay to purchase a share of this stock today is $11.29
Karl Corp.’s trial balance of income statement accounts for the year ended December 31, Year 1, included the following: Debit Credit Sales $80,000 Cost of sales $ 60,000 Administrative expenses 15,000 Loss on sale of equipment 9,000 Commissions to salespersons 10,000 Interest revenue 5,000 Freight-out 3,000 Loss on disposal of a major operating segment 10,000 Bad debt expense 3,000 Totals $110,000 $85,000 Other Information: Karl’s income tax rate is 30%. On Karl’s income statement for Year 1, the loss on discontinued operations is
Answer and Explanation:
$85,000 of revenues - $110,000 + $10,000 of Expenses = $ -15,000 Loss x 30% Tax ($4500) = $ -19,500
ABC Inc. has a dividend yield equal to 3 percent and is expected to grow at a 7 percent rate for the next seven years. What is ABC's required return?
A. 10 percent
B. 11 percent
C. 4 percent
D. 5 percent
Answer:
option (A) 10 percent
Explanation:
Data provided in the question:
Dividend yield = 3 percent
Expected growth rate = 7 percent
Therefore,
The ABC's required return will be
= Dividend yield + Expected growth rate
or
The ABC's required return = 3% + 7%
or
The ABC's required return = 10%
Hence,
The ABC's required return is option (A) 10 percent
ABC Inc.'s required return is 10 percent.
Explanation:To calculate ABC Inc.'s required return, we can use the Gordon Growth Model, which is a formula used to estimate the value of a stock. The formula is Required Return = Dividend Yield + Dividend Growth Rate. Given that ABC Inc. has a dividend yield of 3 percent and is expected to grow at a rate of 7 percent for the next seven years, we can calculate the required return as follows:
Required Return = 3% + 7% = 10%
Therefore, ABC Inc.'s required return is 10 percent.
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Daniel is a subscriber to your company's online tech forum and is complaining that he can no longer access it, although no other subscribers have called. You have no problem connecting to the tech forum. What would you tell Daniel to do?
Answer:
First of all, I would tell him to check his internet connection, because it might be causing the issues. Daniel should simply try to access any other website or turn off and on his internet connection.
In case the internet connection is not the issue, he should check if the forum is being blocked by a firewall, or the internet browser. In case it is, he should deactivate the blocks or use another browser.
Katherine 35 is married with two children and files as Head of Household. She lived apart from her husband for the last eight months of 2018.
What is the amount of California adjusted gross income she must have in order to be required to file a tax return?
Answer and Explanation:
Since Katherine is under 65 years of age and is the Head of Household. Therefore, in order to file a tax return, her gross income should at least be $13,400.
Which of the following guidelines should people who maintain professional blogs follow in order to be responsive to their readers?
a. Read the comments to learn reader concerns.
b. Use a businesslike tone.
c. Run contests so readers can win small prizes.
d. Use I-statements often to establish expertise.
e. Include lots of images.
Professional bloggers should read comments for reader feedback, maintain a businesslike tone, provide navigational cues, focus on unique contributions, regularly update content, and thoroughly interpret and analyze information to be responsive to readers.
Explanation:To be responsive to their readers, professional bloggers should adhere to certain guidelines. Reading the comments is a fundamental way to learn about reader concerns and feedback. Adopting a businesslike tone can contribute to establishing the author's credibility, while ensuring content is relatable and comprehensible is equally important.
Moreover, providing readers with cues, such as clear formatting and structured writing, can help them follow ideas more efficiently and locate information of interest. Rather than expanding the scope unrealistically, bloggers should identify and leverage their unique strengths and focus on making a helpful contribution to their targeted audience.
This includes posting relevant articles, updating their profile often, and maintaining fresh status updates. Lastly, it is crucial to interpret, analyze, and explain the information, reinforcing its relevance to the reader and commenting on its credibility.
What setting must be enabled to view data in Demographics and Interests Reports?
A. Content GroupingB. Advertising featuresC. User permissions on the viewD. In-Page Analytics
Answer: (B) Advertising features
Explanation:
The advertising feature is one of the most important type of setting that enabled to viewing the data in the interest and the demographic report.
The adverting feature is the process of analyzing the given information or data by collecting all the information from the users in the form of google advertisement cookies in the system.
We can easily enable the data in the demographics the interest report by clicking on the button admin and the navigating the given properties by enabling the advertising features.
Therefore, Option (B) is correct.
According to Robert Merton, ____________________ occurs when individuals feel social and psychological strain due to a lack of acceptable means for achieving success.
-Income taxes should be decreased to the same rate for everyone.
-Income taxes should be abolished and replaced with a national sales tax.
-Income taxes should be increased regardless of ability to pay.
-Income taxes should be reduced to a minimal level and be based on ability to pay.
According to Robert Merton, Anomie occurs when individuals feel social and psychological strain due to a lack of acceptable means for achieving success.
Explanation:
The American sociologist named Robert King Merton. He worked most of his profession at Columbia University where he graduated as a professor of the University.
Anomie is "the state that society gives persons no moral guidance" .
Conflicts between values and social linkages between an individual and the group will contribute to anomia.
Goals can become so relevant that illegal means can be used if the institutionalised means — that is to say, appropriate in compliance to social standards — collapsed. Stronger emphasis on results than means produces a tension that leads to a deterioration of the regulatory structure–that is to say, anomie.
A BD used by an IA for execution of trades announces a commission discount for placing at least 500 trades per month. The IA wants to get the discount for its clients, but typically places about 475 trades per month. The best practices for the IA to get the discount is to increase trading:______A) in the account of the IAB) equally throughout its clienteleC) proportionally throughout its clienteleD) only in the accounts that already trade frequently
Answer: A. in the account of the IA
Explanation:
Here,
IA = investment adviser
BD = broker-dealer
In this scenario, the investment adviser want to get discount for its client. The best option for investment adviser to get discount for its client would be to increase trading in the account of the investment adviser.
Final answer:
The IA wants to get the discount for its clients, but typically places about 475 trades per month. The best practices for the IA to get the discount is to increase trading: proportionally throughout its clientele, option C.
Explanation:
The question refers to a situation where an Investment Advisor (IA) is considering ways to increase trading to qualify for a commission discount from a Broker-Dealer (BD) by reaching a threshold of 500 trades per month. The IA is currently averaging about 475 trades per month. The best practice for the IA to achieve the discount, while also considering potential regulation and ethical considerations, would likely be to increase trading:
C) proportionally throughout its clientele,
This approach is designed to maintain fairness and reduce any potential conflicts of interest by ensuring that the additional trades needed to secure the discount benefit all clients proportionally, rather than favoring certain accounts over others.
While the personal computer industry is flooded and growing with laptops and tablets, Malik recently bought a desktop, his first personal computer. He realized that a computer at home would be helpful for his children for their school projects, and he could use it to maintain the simple accounts of his plumbing business. Which of the following customer segments does Ivan best represent?
a. laggards
b, early adopters
c. early majority
d. category captains
Answer:
A. Laggards
Explanation:
Adopters Categories is the division of product consumers into various segments based on readiness or inclination to use a new product or innovation.
Laggards: This category of adopters are the slowest to try or use new products or innovations in the entire group. They are only forced to adopt when it seems like there are no other alternatives or every other person has adopted already.
Laggards who represent about 16% of consumers, only adopt new technologies when there are no traditional alternatives left. They are also very keen on ensuring reliability of product, practicality and low cost.
Laggards are conservative just like Malik in the question, while the industry is growing with laptops and tablets, he just got a desktop as his first personal computer, making him ways behind the trend in the society.
Other categories of Adopters:
Innovators: a group of consumers who are adventurous and are attracted to using new technologies because they are new.
Early adopters: this group of consumers are in charge of setting trends around a new product or innovation as they tend to create opinions about these products which others can now leverage on to adopt them.
Early majority: this group of consumers are attracted to products because of their benefits and how useful they are to their daily lives.
Late majority: Although they are like early majority, they are more skeptical to make purhcase, they prefer to test or a while before adoption
During modeling of the CRISP-DM method, we would ______. a. clarify business goals for the data mining project b. assess if the model achieves business goals c. apply selected modeling techniques d. select a subset of data to be used and prepare it
Answer:
c. apply selected modeling techniques
Explanation:
The CRISP-DM method is a cross-industry process used for data mining that is understood by all industries that may use it. During modeling of the CRISP-DM method, we would apply selected modeling techniques that are chosen to best meet the goals of this methodology and is understood by all those that will use it.
It is important to apply a selected modeling techniques when modeling the CRISP-DM method.
What is the CRISP-DM method?The CRISP-DM method refers to an industry process that is used for data mining which is understood by all industries that may use it.
During the modeling of the CRISP-DM method, the selected modeling techniques are chosen to best meet the goals of the methodology.
Therefore, the Option C is correct.
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Initially, Rhett believed he should maintain his production facilities within the United States and simply export his designer eyeglass frames to foreign sellers. However, he lacked expertise in exporting. Rhett decided to see if the federal government could provide any help by contacting a(n):
Answer:
Export Assistance Center
Explanation:
Export Assistance Center is the one which is established by the federal government to provide or offer the front line service and outreach for the operations to the US exporters.
These centres assist the business in US which are new exporting and would like to expand the additional markets of exports or to increase the market share in the existing markets.
So, Rhett lack in expertise in exporting so he decided to see if the federal government might provide help through contacting the export assistance centre.
National Financial Services, Inc. invested $ 15,000 to acquire 5,000 shares of Stonebridge Investments, Inc. on March 15, 2015. This investment represents less than 20% of the investee's voting stock. On May 7, 2018, National Financial Services, Inc. sells 2,500 shares for $ 20,250. When the journal entry to record the sale is made, ________.
a. Gain on Disposal will be credited
b. Loss on Disposal will be debited
c. Equity Investments will be debited
d. Cash will be credited
Answer:
a. Gain on Disposal will be credited
Explanation:
For recording this sale, first we have to determine the per share selling price and purchase price which is shown below:
Purchase price would be
= Invested amount ÷ number of shares acquired
= $15,000 ÷ 5,000 shares
= $3
Now the sale price would be
= Sales amount ÷ number of shares acquired
= $20,250 ÷ 2,500 shares
= $8.1
Since the selling price is more than the purchase price which would reflect the gain and the gain part is always credited
The recapture of depreciation changes the character of the gain on a Section 1231 asset from a(n) _________ gain to ________ income.
Answer:capital
ordinary
Explanation: A section 1231 asset is a kind of property that is held for more than one year as defined by section 1231 of the United States Internal Revenue Code. This property is real or depreciable assets. Section 1231 assets include: buildings, land, machinery, livestock, leaseholds etc.
For the recapture of depreciation to exist there must be a sale of a section 1231 sold at a gain. However the gain that is realised must be reported as an ordinary income for tax purposes. Thereafter if the selling price of this asset is higher than the tax basis then the difference is essentially recaptured. This done by changing it from a capital gain to ordinary income.
Petite Fashions issued 500,000 of its 2 million shares of authorized common stock. At the end of the accounting period, 450,000 shares are outstanding. How many shares of treasury stock does Petite Fashions have?
Answer:
Treasury shares = $50,000
Explanation:
given data
share issued = $500,000
authorized common stock = 2 million
Shares outstanding = $450000
to find out
How many shares of treasury stock
solution
we get here Treasury shares that is express as
Treasury shares = Shares issued - Shares outstanding ....................1
put here value we get
Treasury shares = $500000 - $450000
Treasury shares = $50,000
In Country X a returning tourist may import goods with a total value of $500 or less tax free, but must pay an 8 percent tax on the portion of the total value in excess of $500. What tax must be paid by a returning tourist who imports goods with a total value of $730 ?
Answer:
$18.4
Explanation:
Data provided in the question:
Maximum value on which there is no tax = $500
Tax paid on the portion of the total value in excess of $500 = 8% = 0.08
Total value of the goods imported by the returning tourist = $730
Now,
The excess amount of portion on which the tax will be charged
= Total value of the goods imported - Maximum value on which there is no tax
= $730 - $500
= $230
Therefore,
@8% tax rate
Total tax that must be paid on excess portion i.e $230
= $230 × 8%
= $230 × 0.08
= $18.4
Transaction brokers: A. provide online meeting places where people with similar interests can communicate. B. save users money and time by processing online sales transactions. C. sell physical products directly to consumers or individual businesses. D. provide a digital environment where buyers and sellers can establish prices for products. E. generate revenue from advertising or from directing buyers to sellers.
Answer:
D. provide a digital environment where buyers and sellers can establish prices for products.
Explanation:
Transaction brokerage provides a third party service to buyers and sellers. One distinguishing feature of transaction brokerage is neutrality. He or she is neither a buyer nor seller but an intermediary and charges a flat fee for his service.
Transaction brokers, like banks, act as intermediaries in the exchange network, whether that's online transactions or traditional banking transactions involving the lending and borrowing of money. They reduce transaction costs and create a more efficient and safer environment for exchanging goods, services, or financial assets. In addition to that, banks play a vital role in money creation.
Explanation:Transaction brokers primarily function as intermediaries in the exchange of goods, services, or financial assets online. A similar concept can be seen in the role of banks as financial intermediaries in the economy. They facilitate transactions between savers who deposit their money and borrowers who seek loans, reducing the transaction costs associated with finding a lender or a borrower directly and creating a more efficient payment system.
Banks play a crucial role not only in the exchange of money but also in money creation. Just like transaction brokers streamline online transactions, banks make financial transactions safer and more accessible. They offer various accounts to cater to different needs, such as checking accounts or interest-bearing accounts, further aiding in financial transactions.
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Spencer has an investment in two parcels of vacant land. Parcel 1 is a capital asset and parcel 2 is a § 1231 asset. Spencer already has a short-term capital loss for the year that he would like to offset with capital gain. He has a § 1231 lookback loss that exceeds the gain from the disposition of either land parcel. Spencer wants to sell only one land parcel: each of them would yield the same amount of gain. The gain that would be recognized exceeds the short-term capital loss Spencer already has. Which of the following statements is correct?
A) Spencer will have a net capital loss no metter which land percel he sells
B) spencer will have a net capital loss if he sells parcel 2.
C) spencer will have a net capital loss if he sells parcei 1.
D) spencer will have a net capital gain if he sells either parcel 1 or parcel 2.
E) None of the above.
Answer:
The correct answer is b. Spencer will have a net capital loss if he sells parcel 2.
Explanation:
When a person sells a capital asset, the sale usually results in a capital gain or loss. Capital assets include inherited assets or assets that someone owns for personal use or as an investment.
Earnings and loses. A capital gain or loss is the difference between the base and the amount that the seller obtains when selling an asset. The base is generally what the seller paid for the asset.
A law firm received $2,500 cash from a client for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered as of the last day of the accounting period, but no adjusting entry is made, this would cause
a.expenses to be overstated.
b.net income to be overstated.
c.liabilities to be understated.
d.revenues to be understated.
Answer:
D.
Revenues to be understated
Explanation:
Understated amounts indicate a reported amount is not correct and the reported amount is less than the true amount.
Andy, a salesperson for Fashion Seal Uniforms, tells the owner of a retirement home about the importance of caregivers having clean and attractive uniforms that will withstand countless hot water washes. Andy displays several styles of uniforms that have been washed hundreds of times to show how well his company's uniforms are made. The owner of the retirement home tells Andy that she is planning to open one new center every six months for the next three years and will need a lot of uniforms. Then the owner agrees to buy six units but with no commitment to extend the relationship. Which of the following stages of the relationship development process does this scenario exemplify
Answer:
Exploration
Explanation:
The exploration phase of the relationship development process occurs when both parties (seller and buyer) test the actions of the other party. Both parties will explore or try how the business relationship may develop, since they are not committed yet to start a relationship.
The owner accepted to purchase a small number of uniforms to try how good or bad they are. Andy is also testing if what the owner says is true about opening new centers and needing a lot of uniforms before making an offer for a larger lot.
E-commerce sites are able to keep the amount of data entry errors to a minimum ________.
a. by using artificial intelligence to correctly "guess" what the users have entered
b. by having the buyers enter products information themselves
c. by using smart spell-checkers
d. by using 'smart' computers and 'smart' phones
Answer:
E-commerce sites are able to keep the amount of data entry errors to a minimum by having the buyers enter products information themselves
Explanation:
E-commerce sites are platforms where buyers and sellers meet on the internet to carryout transactions.
Entry errors are as a result of wrong information inputted when documenting information. In most E-commerce sites entry of items purchase is done by the buyers to reduce the chances of entry errors.
A market-penetration pricing strategy is most suitable when Answer . A) a low price slows down market growth B) production and distribution costs fall with accumulated production experience C) a high price dissuades potential competitors from entering the market D) the market is characterized by inelastic demand E) a low price encourages actual competition
Answer:
B) production and distribution costs fall with accumulated production experience
Explanation:
A low price may slow down market growth. However, it cannot occur in the market penetration strategy because a market penetration strategy lowers the price to attract customers in a discouraging competitive market. Therefore, option "A" and option "E" is incorrect. As the penetration strategy offers a lower price, therefore, the higher price is nowhere near the option, so "C" is not correct. As the price is low, customers want to buy more, and it is not an inelastic demand. Therefore, the option "D" is wrong also.
As penetration strategy produces the products at a lower price, they can offer low selling prices. It can only happen due to the higher production experience. So, "B" is the right choice.
The most suitable situation for a market-penetration pricing strategy is when production and distribution costs fall with accumulated production experience, as this allows for sustained low pricing while achieving economies of scale.
Explanation:The question asks which scenario best suits a market-penetration pricing strategy. The correct answer is B) production and distribution costs fall with accumulated production experience. Market-penetration pricing is a strategy designed to enter a market with a low initial price point to attract a large number of customers quickly and secure a significant market share. This strategy works effectively in situations where the costs of production and distribution decrease as the volume of production increases, due to economies of scale. This allows the company to maintain or even improve its profit margins over time despite the low price.
Options like discouraging competitors through high prices or targeting markets with inelastic demand represent different strategies and don't align with the foundational goals of market-penetration pricing. On the other hand, achieving cost reductions through scale enables a company to sustain low prices and deter new entrants, making it the most suitable scenario for market-penetration pricing.
Canon began as a camera-making company but has since become a company that produces a wide range of office equipment in addition to cameras. Canon’s managers evidently believe in growth through:
Answer:
Canon’s managers believe in Diversity growth.
good luck
Suppose the demand for hard-wood flooring increases, while the demand for wall-to-wall carpeting decreases. Based on this change in consumer tastes, the demand for hard-wood-flooring factory workers in North Carolina increases, while the demand for carpet factory workers in Georgia decreases. This is an example of.
Answer:
Frictional unemployment created by sectoral shifts
Explanation:
Frictional unemployment happens throughout a phase when employees are looking for new jobs or are transferring from old jobs to newer ones.
It can even be defined as natural unemployment as it is not directly linked to factors that contribute to an economy that is performing poorly.
A new global trade agreement leads to higher demand for export-sector workers and lower demand for workers in import-competing sectors. Workers need time to change sectors, and sectoral shifts lead to frictional unemployment
A public choice theorist would be most likely to say that government failure is a consequence of the__________.
Answer:
Rational behaviour of the participants of the political process.
Explanation:
Public choice theory is the theory used in economic as well as political domain as a process of decision-making. It administers the use of economics-related knowledge in the field of politics and thus, focuses on solving various political problems with the help of economic tools. While making decision-related to political issues according to the public choice theory, it is important to have adequate economics and political knowledge, and the decision should not be based on any rational behavior.
Stock in country Road Industries has a beta of 1.46. The market risk premium is 7.5 percent while T-bills are currently yielding 2.5 percent. Country Road's last dividend was $1.55 per share and dividends are expected to grow at an annual rate of 4.5 percent indefinitely. The stock sells for $26 a share. What is the estimated cost of equity?
a. 11.96 percent
b. 13.45 percent
c. 10.73 percent
d. 12.09 percent
e. 10.46 percent
Answer:
b. 13.45 percent
Explanation:
We can use the CAPM method to find the cost of equity, according to CAPM
cost of equity = Risk free Rate +Beta(market risk premium)
cost of equity = 2.5+1.46(7.5)
cost of equity=13.45
If a price ceiling is not binding, thena. the equilibrium price is above the price ceiling.b. the equilibrium price is below the price ceiling.c. it has no legal enforcement mechanism.d. None of the above is correct because all price ceilings must be binding.
If a price ceiling is not binding, it means that the equilibrium price is below the price ceiling.
Explanation:If a price ceiling is not binding, it means that the equilibrium price in the market is below the price ceiling. This happens when the market price is determined by the forces of supply and demand, and it is below the maximum price set by the ceiling. For example, if the equilibrium price is $8 but the price ceiling is set at $10, then the price ceiling is not binding. In this case, the market can freely determine the price and it ends up being below the ceiling.
The correct answer option is b. the equilibrium price is below the price ceiling. It's important to note that not all price ceilings are binding. Some price ceilings are set above the equilibrium price, which makes them non-binding and ineffective.
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Dividend yield. BMM Industries pays a dividend of $2 per quarter.The dividend yield on its stock is reported at 4.8%. What is the stock price?
Answer:
stock price = 166.667
Explanation:
given data
dividend = $2 per quarter
dividend yield = 4.8%
to find out
What is the stock price
solution
we know that Dividend = $2 per quarter = 2 × 4 = $8 per annual
and dividend yield on the stock is given = 0.048
so stock price will be here as
stock price = [tex]\frac{Dividend}{dividend\ yield}[/tex] ................1
put here value we get
stock price = [tex]\frac{8}{0.048}[/tex]
stock price = 166.667
The dividend yield is calculated as the total annual dividend divided by the share price. Given that BMM Industries pays a total annual dividend of $8 and the dividend yield is 4.8%, the stock price comes out to be approximately $166.67.
Explanation:The dividend yield is a financial ratio that indicates how much a company pays out in dividends each year relative to its share price. The dividend yield is calculated as the total annual dividend divided by the current share price. In this case, since BMM Industries pays $2 per quarter, the total annual dividend is $2 × 4 = $8.
The given dividend yield is 4.8%. So, if we let P be the price of the stock, we can set up the equation 8/P = 0.048, or 8 = 0.048 × P. Solving for P, we get P = 8 / 0.048. The stock price is thus approximately $166.67.
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Solvency analysis evaluates a company's ability to a. make periodic interest payments. b. repay the face amount of debt at maturity. c. both repay the face amount of debt at maturity and make periodic interest payments. d. neither repay the face amount of debt at maturity nor make periodic interest payments.
Answer:
C) both repay the face amount of debt at maturity and make periodic interest payments.
Explanation:
Solvency ratios are used to measure a company's ability to repay its long term debt and the interests associated to it. The most currently used solvency ratios are:
total debt / total assets ratioequity ratiointerest earnedWhen a company's creditors want to analyze its ability to repay short term debt they will measure the company's liquidity, or its ability to convert short term assets into cash.