The owners of a firm facing a high probability of bankruptcy prefer to invest in ____ projects, because ______

Answers

Answer 1

The answer is risky; the shareholders have little to lose and might win if successful.  They prefer to go to high risk projects financed with debt because the bondholders are more pertinent to suffer any economic losses incurred should the project fail. The additional debt a company gets, the more it risks being not capable to meet its economic obligations to creditors. A highly leveraged firm is more susceptible to a decline in profitability. Therefore, a highly levered firm has a higher risk of bankruptcy. Investors and/or owners would prefer the company to go ahead with the risky investment. If the company foregoes the investment, owners don’t benefit. If the company does go for the risky investment, owners have at least some upside gain potential.

Answer 2

The owners of a firm facing a high probability of bankruptcy prefer to invest in [tex]\fbox{risky}[/tex] projects because [tex]\fbox{the shareholders have little to lose and might win if successful}.[/tex]

Further Explanation:

Bankruptcy: Bankruptcy refers to the legal process where the person or company seeks relief from the court because they are not able to pay their debt. The company and debtor both can file for bankruptcy in the court.

If the firm is facing bankruptcy, it means that it is heavily laden with debt. The profitability of the firm is very low since it is not able to pay its debts. If the firm goes for bankruptcy, the shareholder will receive a cents for a dollar. But if the firm accepts the risky project and successfully implement it, then it will improve the condition of the firm. The firm might be able to pay its debts.

Therefore, the firm that is facing a high chance of bankruptcy prefers to invest in risky projects because the shareholders might receive their money back if the project is successful.

Learn more:

1. Learn more about the value of the investment

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2. Learn more about the value of the bond

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3. Learn more about the present value of the investment

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Answer details:

Grade: Senior School

Subject: Business Studies

Chapter: Financing decisions

Keywords: Owners of a firm, high probability of bankruptcy, risky projects, investment, bankruptcy, the shareholders, have, little too, lose, profit, loss, creditors, bank loan.


Related Questions

Is considering purchasing a water park in charlotte, north carolinaâ, for $2,000,000. the new facility will generate annual net cash inflows of $520,000 for ten years. engineers estimate that the facility will remain useful for ten years and have no residual value. the company usesâ straight-line depreciation. its owners want payback in less than five years and an arr of 12â% or more. management uses a 14â% hurdle rate on investments of this nature?

Answers

Given:
initial investment 2,000,000.
the new facility will generate annual net cash inflows of $520,000 for ten years.
engineers estimate that the facility will remain useful for ten years and have no residual value.

Payback period = Initial Investment / Cash Inflow per period
Payback period = 2,000,000 / 520,000
Payback period = 3.85 years or 3 years and 10 months.

Accounting Rate of Return (ARR) = Average Annual Profit / Average Annual Investment
Average annual profit = 520,000
Average annual investment = 2,000,000 / 10 years = 200,000
ARR = 520,000 / 200,000 = 2.60 or 260%

NPV = 520,000 * [(1-(1.14)⁻¹⁰ /0.14)] - 2,000,000
NPV = 520,000 * 5.216 - 2,000,000
NPV = 2,712,320 - 2,000,000
NPV = 712,320

Monthly payments on an amortizing mortgage note payable typically build equity in real estate in an amount equal to

Answers

The answer is a principal portion of the payment. A portion of every installment is for intrigue while the rest of the sum is connected towards the important adjust. An amortization plan demonstrates the particular financial sum put towards enthusiasm, and additionally, the particular sum put towards the key adjust, with every installment.

The profile of five partnerships firms

Answers

The 5 Partnership Firms:
(Chronological order)

1) "Contract for Partnership"

2) "Maximum number of Partnership is 20"

3) "Carrying on business with Partnership"

4) "Sharing on profit with Partnership"

5) "Mutual Agency in a Partnership"

These are the five profiles of Partnership in any corporate agency

In 2007, five or six major pharmaceutical companies formed a group in order to control the price of vitamins and adjust their production. such an arrangement is called a ________.

Answers

Five or six major pharmaceutical companies formed a group in order to control the price of vitamins and adjust their production in the year of 2007. This kind of organization is an example of cartel. A cartel is an organization shaped from a official arrangement among a group of manufacturers of a good or service to standardize supply in an exertion to regulate or manipulate prices. In addition, a cartel is an assortment of otherwise independent businesses or countries that serve together as if they were a single producer and are able to fix values for the goods they manufacture and the services they render in deprived of competition.

To be effective issuing and investing in bonds knowledge of their terminology, characteristics, and features is essential the contract that describes the term of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called

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The contract that describes the term of a borrowing arrangement between a firm that sell a bond issue and the investors who purchase the bonds is called INDENTURE. An indenture is a legal and binding contract which states in clear terms all the important characteristics of a bond. The document must be signed by all the parties involved. 

The payment to entrepreneurship is called

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Profit is the payment to entrepreneurship. When the entity’s amount earned exceeds the amount spent in buying, operating, or producing something and it has a financial gain, this is then the term we call the profit.  This is what an entity obtains when the amount of revenue from a business activity exceeds the expenses, costs and taxes which are all needed to sustain the activity. The owner may or may not decide to use the profit on the business.  This is also defined as the money the business makes after all the expenses have been taken into account. It is any company’s goal to consistently earn profit. This is the reason why much of business performance is based on the various forms related to profitability. 

Dr. brown conducts research on how concepts are represented in peoples minds. he believes that each category has one perfect representation of a concept. based on this, dr. brown most likely follows the ________ model of organizing concepts

Answers

Dr. Brown follows the prototype model of organizing concepts because this model pertains to categorizing an individual in terms of their characters and qualities. It tries to point out that every individual is different even if they fall under the same category. It could be shown in the statement above as he tries to say that in each category, an individual has a different representation of a concept compared to others.

Dr. Brown's research suggests he follows the prototype model of concept organization, which involves creating mental representations around 'best' examples or prototypes within a category.

Dr. Brown, who conducts research on how concepts are represented in people's minds and believes that each category has one perfect representation of a concept, most likely follows the prototype model of organizing concepts. The prototype theory suggests that people form mental representations of categories based on a 'best' example or prototype, incorporating the most common properties of that category. This theory is consistent with Dr. Brown's view that there is a perfect concept representation within each category. In contrast, the exemplar-based theory proposes that there is no summary representation of categories, instead, each category is represented by all instances that have been encountered and remembered.

Between two major currencies, the spot exchange rate is the rate ________ and the forward exchange rate is the rate ________.

Answers

To complete the statement above "Between two major currencies, the spot exchange rate is the rate on that date and the forward exchange rate is the rate at some specified future date. " 


A spot exchange rate is a cost to trade one cash for another for quick conveyance. The spot rates speak to the costs purchasers pay in one cash to buy a moment money. 
The cost cited for a quick settlement on an item, a security or a cash. The spot rate likewise called "spot price " depends on the estimation of a benefit right now of the quote.


Last month peggy company had a $22,080 profit on sales of $286,900. fixed costs are $92,680 a month. what sales revenue is needed for peggy to break even? (

Answers

Given:
For last month,
Profit = $22,080,
Sales = $286,900
Also,
Fixed costs = $92,680 per month
Therefore,
Revenue - (286,900 + 92680) =  22080
Revenue =  $401,660

To break even, profit = 0, so that
Sales Revenue = 286,900 + 92,680 = $379,580

Answer: $379,580

During a group meeting, pat questions the feasibility and logic of the solution that the group plans to propose. pat is performing the role of blocker.
a. True
b. False

Answers

That statement is false
In a group meeting, the blocker is someone that is constantly and negatively trying to oppose everything that the members of the group discussion said without offerings any solution. In this context, Pat's role is closer to the 'initiator' role, the one who constantly propose a solution for the group

Determine the total relevant cost per unit if starters are purchased from an outside supplier.

Answers

The total relevant cost per unit if starters are purchased from an outside supplier would include the contract price or the amount you would have to pay for the purchase and the freight of the product purchased. The total cost would include these two and dividing this total cost with the number of units purchased would yield to the relevant cost per unit. 

The basic goal of _____ is to increase the short-term cash return without too much concern for the long-run impact.

Answers

I think it's "harvest" :)

Speculation is the practice of focusing on increasing short-term cash returns from investments, often at the expense of long-term impacts. It leverages market volatility for quick payout and can influence corporate strategies and banking practices, thus potentially affecting economic stability.

The basic goal referred to in the question is speculation. Speculation is the practice of investing in risky financial opportunities with the intention of obtaining a fast payout, focusing on short-term gains rather than long-term stability or growth. Investors engaging in speculation typically prioritize immediate cash returns, taking advantage of market fluctuations, even though it may entail ignoring the long-term ramifications for the investments or the larger economy.

It is important for businesses to consider shareholder interests, which underlie the necessity for organizations to generate high returns on investments. This pressure to provide high returns can drive corporations to pursue strategies that may not be aligned with long-term sustainability but serve to maximize short-term profits.

Similarly, banks may experience the benefit of not requiring significant extra funds for loans since they plan to sell these loans quickly to convert them into financial securities. Nonetheless, this approach can raise concerns about the stability of the financial system and the broader implications for economic health.

Management at hottie potatee, a nationwide potato bar chain, believes that its customers value a predictable and consistent level of service and quality. when customers stop at one of its potato bar chain restaurants anywhere in the united states, they should know what to expect in terms of menu, price and quality. in order to maintain this consistency, hottie potatee adopted a(n) ______ structure.

Answers

Hottie potatee adopted a CENTRALIZED AUTHORITY structure. A centralized authority structure is an organization management structure in which most of the decision making power and authority reside in the hands of the leaders who are usually located in the headquarters of the company.

Puto pueros libros __________. i think that the boys read (present tense) the books. entry 1: point value: 3.0 points question 2 puto eos litteras ___________.i think that they will read the letters. entry 1: point value: 3.0 points question 3 puto puellas libros __________. i think that the girls are reading the books. entry 1: point value: 3.0 points question 4 putavi discipulos libros __________. i thought that the students were reading the books. entry 1: point value: 3.0 points question 5 putavi milites libros __________. i thought that the soldiers had read the books. entry 1: point value: 3.0 points question 6 puto litteras a pueris __________. i think that the letters are being read by the boys. entry 1: point value: 3.0 points question 7 puto puellas libros __________. i think that the girls will read the books. entry 1: point value: 3.0 points question 8 puto litteras a eis __________. i think that the letters have been read by them. entry 1: point value: 3.0 points question 9 putavi libros a militibus __________. i thought that the books had been read by the soldiers. entry 1: point value: 3.0 points question 10 putavi libros a militibus __________. i thought that the books were being read by the soldiers. entry 1: point value: 3.0 points

Answers

As I see, your topic is Latin infinitives. You have to choose between these verbs: legere, legisse, lecturos esse, lecturas esse, legi, lectos esse, lectas esse. I've put verbs from English and Latin versions in bold, to show how it translates.
 
1. Referring to the English translation: "I think that the boys read the books.", correctly completed sentence looks like this: Puto pueros libros legere. Legere = read or I/he/she/it am/is reading. Because it is present tense.

2. According to the English translation: "I think that they will read the letters.", the sentence should be completed like this: Puto eos litteras lecturos esse. As you see Lecturos esse translates like will read or be reading (future tense).

3. "I think that the girls are reading the books.", so the sentence should be completed like this: Puto puellas libros legereAs I've mentioned it before, in the cases of present simple it translates as are reading or read.

4. According to this translation: "I thought that the students were reading the books.", the sentence can be completed like this: Putavi discipulos libros legere. (Past tense).

5. The English version is: I thought that the soldiers had read the books. So the Latin version should be completed like this: Putavi milites libros legisse. (introductory perfect verb).

6.  We know that the English version is: I think that the letters are being read by the boys. So the Latin version will be: Puto litteras a pueris legi. (are read or are being read.

7. If the English translation is: I think that the girls will read the books. The Latin one will be: Puto puellas libros lecturas esse. (Notice that this one is the same as the second sentence, but feminine).

8. We have English version of the sentence, that is: I think that the letters have been read by them. So the Latin one should be translated like this: Puto litteras a eis lectas esse.

9. Here we've got English translation: 
I thought that the books had been read by the soldiers. The Latin version should be completed like this: Putavi libros a militibus lectos esse

10. According to the English translation: "I thought that the books were being read by the soldiers.", the Latin version should be completed like this: Putavi libros a militibus legi.

Sarah can recite her speech for her oral communications class perfectly when she is alone. however, when she is in front of the group she often loses her "train of thought" because of her concern that the audience is judging her performance. sarah's performance has been influenced by:

Answers

Sarah's performance has been influenced by EVALUATION APPREHENSION. Evaluation apprehension refers to the concern that one feels when working in the presence of others which impairs or enhances one's performance. Evaluation apprehension can easily occur especially when one is been rated by panel of judges.

According to keynesian analysis, of households intend to save more, they will:

Answers

A simple Keynesian model follows four principles:
1. Accumulated expenditures, income, and output are the same.
2. All input of spending into the economy must equal all withdrawals
3. Investment is an input.
4. Saving is a withdrawal
According to Keynesian analysis, of households intend to save more, they will become poorer. The theory about Keynesian analysis applies to economic where an increase in savings decreases the circular flow of income. S when the households save more, they are reducing the stream of income for other households and therefor diminishes the overall economic activity.

Squire corporation charged job 110 withâ $13,400 of direct materials andâ $11,900 of direct labor. allocation for manufacturing overhead isâ 75% of direct labor costs. what is the total cost of jobâ 110?
a. â$8,925
b. â$41,167
c. â$34,225
d. â$25,300

Answers

Since costs for direct materials, cost for direct labor and allocation for manufacturing overhead are all costs, these three are added up to obtain the total costs.

Total costs = costs for direct materials+cost for direct labor+allocation for manufacturing overhead
Total costs = $13,400+$11,900+0.75($11,900)
Total costs = $34,225

The answer is C.

Sometimes a company uses a(n) ____, which allows customers or suppliers to access part of its intranet.

Answers

 Sometimes a company uses an Extranet which allows customers or suppliers to access part of its intranet.
By doing this, the company will give the customers and the suppliers several information that needed for the transactions without having to make a direct communication through customer's service.

Some physician practices will bill at rates from 100% of medicare to 500% of medicare. which one do you think is correct and why? discuss what are you going to look for and why?

Answers

From the perspective of the patient, clearly we would like to be billed at the lower rate of 100%. However, the physician most likely wants the maximum revenue so he would like the 500% rate. Somewhere in between should be acceptable. If a physician is only charging the 100% rate, as a patient, that may make me think that he is charging a reduced rate, possibly because he is not that good of a physician and needs more patients. I think a rate of 200-250% would be a good indicator that the physician is good and fair. He is not overcharging, but he is also not charging to little, which would be a red flag.

Small teams perform better than large ones because: members exchange more opinions. members do not feel like a part of the group. there is lower motivation. fewer questions are asked.

Answers

The reason why small teams perform better than large ones is because of the first option, members exchange more opinions, it is because in large groups, there are a lot of people in the group which is hard to communicate and to exchange more opinions as the group is large and could cause misunderstanding. But when in small groups, it is much easier to exchange opinions as they are only small in size, making it easier to communicate and to understand each other compared to a large group who are comprised of many individuals, causing unclear conversations and misunderstandings when not handled properly. Other options does not correspond to the question as it does not explain why small teams perform better than large groups.

One advantage of the interview method of personality assessment is the ___________. ease of interpreting responses

Answers

One advantage of the interview method of personality assessment is the ability to pose open-ended questions. Face to face interview is very effective in knowing the personality of an individual since we can ask questions that encourage answers that are meaningful and would reflect the person's knowledge, emotions and personality.

Subsidizing medical services through medicare

a. makes medical services available to a large percentage of the? population, who otherwise could not afford them.

b. drives a wedge between the price received by providers and the price perceived by consumers.

c. is a relatively low percentage of u.s. gdp compared to other nations.

d. all of the above are true.

e. only a and b are true.

Answers

Final answer:

Medicare makes medical services more accessible and can cause price disparity between providers and consumers. However, it's not accurate to say Medicare is a low percentage of US GDP compared to other nations. Only statements 'a' and 'b' are true.

Explanation:

Subsidizing medical services through Medicare does indeed make medical services available to a larger population, particularly those who otherwise could not afford them, which aligns with statement 'a' in the student's question.

Also, as per statement 'b', it can contribute to a disparity between the price received by providers and the price perceived by consumers. This happens because consumers might not feel the full cost of the care due to the assistance from Medicare.

However, statement 'c' is not entirely correct. While healthcare expenses do represent a significant portion of the U.S. GDP, this is not exclusive to Medicare subsidies, but rather includes all facets of healthcare expenditure. Moreover, the U.S. spends more on healthcare as a percentage of GDP than most other nations.

So, the correct answer is 'e'. Only statements 'a' and 'b' are true.

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Final answer:

Medicare subsidies help make medical services more available to a larger population, creating a discrepancy between the perceived pricing and received pricing. However, the U.S. spends a high percentage of its GDP on health compared to other nations.

Explanation:

The correct answer to your question appears to be 'e. only a and b are true'. Subsidizing medical services through Medicare does indeed make these services more accessible to a larger percentage of the population, as options a and e suggest. This is especially true for those who may not afford them otherwise. This is also what option 'b' suggests, as subsidies can introduce a discrepancy between the price consumers perceive and the price providers receive. However, option 'c' is not accurate. The U.S. actually spends a high percentage of its GDP on healthcare when compared to other nations, not a low percentage as stated.

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The multiplier will increase if the marginal propensity to consume? ______ or the marginal tax rate? ______.

Answers

The multiplier will increase if the marginal propensity to consume DECREASES or the marginal tax rate DECREASES. 

Multiplier = 1 / 1-MPC
MPC or marginal propensity to consumer = change in consumption / change in income

Taxes and imports are identified as leakages. Leakages are money spent by an individual but not on domestic goods or services. Leakages reduces the size of the multiplier. Thus, the lesser the amount of leakages, the bigger the multiplier. 

Mullin, inc, purchases supplies such as paper, and seat covers directly from manufacturers and then sells them to other firms. mullin, inc. is a (n) _____.

Answers

Mullin, inc, purchases supplies such as paper, and seat covers directly from manufacturers and then sells them to other firms. mullin, inc. is a (n) wholesaler.
Distribution of goods or things to specific customer types is wholesaling. Wholesaler is a person, company or firm who buys from various producers, a large quantity of goods and then resells to retailers. There are also some types of wholesalers.

Final answer:

Mullin, Inc. is a wholesaler, which is an intermediary that buys products in bulk from manufacturers and sells them to other businesses. Wholesalers play a critical role in the supply chain by providing services like storage and distribution.

Explanation:

Mullin, Inc., which purchases supplies such as paper and seat covers directly from manufacturers and then sells them to other firms, functions as a wholesaler. Wholesalers are intermediary entities in the distribution channel that buy in bulk from producers and sell these goods to retailers or other businesses, but not directly to the final consumer. The role of a wholesaler like Mullin, Inc. is crucial in the supply chain because it enables manufacturers to focus on production while simultaneously allowing businesses to purchase the items they need without having to buy large quantities directly from the producer. Therefore, wholesalers offer not just ease of access to products for retailers, but also services such as storage, distribution, and sometimes credit facilities.

What are the main advantages and disadvantages of organizing a firm as a corporation there is no limit on the number of owners?

Answers

The main advantages of organizing a firm as a corporation are there is no limit on the number of owners, it means business will continue after the death of any of the owner. The liability of the owner is according to the amount they invested in the firm.

The main disadvantages of organizing a firm as a corporation are firstly corporation is very complicated and its setup is very expensive as compared to other business entities. And secondly there is double tax to pay.

A corporation is a form of ownership where a company sells its shares as stocks to anyone willing to buy it. 

The main advantage of a shareholder of a corporation is that, you are only entitled to your own liabilities and not the whole corporation. If you have 30 shares of that corporation, then that is your only responsibility. Second, it is everlasting as long as the company does not go bankrupt. 

The disadvantage is the double taxation. Aside from paying taxes on your income, you will also pay taxes for the dividends received. A corporation is also heavily monitored by the government. So, you would expect excessive filings of legal documents before you can put up this type of ownership.

There are five major league baseball markets with more than one team. so far this season, the average combined attendance for the chicago cubs and the chicago white sox ranks lowest. before conducting any marketing research to explain low attendance figures, the teams will need to:

Answers

Final answer:

Before conducting marketing research, the teams need to consider the historical context of baseball, the threshold populations, and the patterns of fandom that influence attendance.

Explanation:

Before conducting any marketing research to explain low attendance figures for the Chicago Cubs and the Chicago White Sox, the baseball teams need to understand several historical and social factors affecting fan behavior and attendance. Firstly, they must recognize how professional baseball started as an inexpensive form of entertainment that helped immigrants and Americans form a unified civic identity. The complex historical context including scandals such as the 1919 Black Sox Scandal, the segregation in sports leading to the Negro Leagues' popularity, and the differing patterns of fandom in various sports all contribute to current attendance levels.

Additionally, understanding the threshold population needed for a major league baseball franchise and the sports' significance as a social unifier, alongside factors like team success, rivalry games, and player salaries should be factored into their research. Fandom, especially in baseball, has shown to spread through contagious diffusion rather than strictly geographical loyalty, which can also influence attendance.

Explain why engagement risk, professional skepticism, and assessment of fraud risk are important in this scenario.

Answers

Engagement risk, proficient doubt, and appraisal of extortion chance are critical in light of the fact that this organization is new and secretly held. There is very little organization history, not to mention money related history for the organization, to guarantee this organization has a solid future

The administrative model was developed to explain

Answers

The administrative model was developed to help decision making of managers and attain the optimal result. This is in consideration that people have different levels of understanding in handling administrative situations.  In an administrative model, when a decision becomes a solution, it then becomes a standard operating procedure (SOP).   It is collected and used as a solution to future problems that the company would face.
SOP is integrated into the management as rules or procedures to help the company. 

Though the profits accrue to the local capitalists, a system of nationally controlled production still depends on __________.

Answers

foreign markets. because the cycle still depends on it

In the state of Florida if you're convicted of reckless driving you'll be assessed how many points

Answers

In the state of FL you'll be assessed 4 points.

Answer:

Reckless driving behavior in the state of Florida can add four points to the driver's record. This might not seem to be much but if within twelve months a total of twelve points have been accrued, authorities are allowed to suspend the driver's license for thirty days.

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