Which of the following is false about investing with borrowed money? (5 points)There is increased risk.

If you lose money, you will still have payments on it.

It is the best way to ensure you have retirement funds.

No investment is a sure deal

Answers

Answer 1
Answer: It is the best way to ensure you have retirement funds. 

Retirement funds are generally a conservative investment and investing with borrowed money is seen as a risky activity because it requires payment, regardless of whether you earn additional money through investing or not. Because no investment is a sure deal, the investment process carries risk and the loan requires certain outflows in payments. Therefore, it is not often prudent to use this technique when investing for retirement. 

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Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. If this scenario describes job searches in general, the segment of the population that is most risk-averse will tend to earn:

Answers

Answer:

The  Expected Earning for the college graduates is 40,000

Explanation:

The Expected Earning for a college alum with a four year college education in financial matters is determined as weighted normal all things considered, utilizing likelihood of every result as its weight.  

Although the Expected Earning is;  

Expected Earning = (25% × 30,000) + (50% × 40,000) + (25% × 50,000)  

Expected Earning = 0.25 × 30,000 + 0.5 × 40,000 + 0.25 × 50,000  

 Expected Earning = 7500 + 20,000 + 12,500

Expected Earning = 40,000

Suppose you are committed to owning a $191,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 11 percent and you want to buy the car in 8 years on the day you turn 30, how much must you invest today?

Answers

Answer:

Explanation:

In this scenerio we have to use compound interest formula to find the investmen amount:

FV=PV(1+i)^{n}

FV: Future Value (Ferrari price)

PV: Present Value (Investment amount)

i: interest rate (0.11) (11%)

n: time (8 years)

191,000=PV(1+0.11)^{8}⇒ 191,000=PV×2,3045377697175681

PV= $82,879.96=Investment amount

One element in preparing a financial plan for a client is to determine the appropriate type and amount of life insurance. If a client is conservative, 30 years old, and married with 2 young children, whose income is unpredictable, the IA may recommend what type of life insurance policy?

Answers

Answer:

Permanent Life Insurance Policy

Explanation:

Permanent Life Insurance Policy is a flexible insurance policy that allows policy holders to borrow from their insurance policy (policy loan). Furthermore, withdrawal up to the total premium amount paid into the policy is allowed.

Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is $50,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. On July 1, 2013 Stevenson sold the equipment for $100,000. The journal entry to record the sale of the equipment will include.

Answers

Answer: The following journal entries would be recorded upon disposal of the equipment:

                                                                              Debit                       Credit

Cash                                                                   $100,000

Accumulated depreciation                               $140,000

Equipment                                                                                        $250,000

Loss on disposal of asset                                   $10,000

Explanation: Using the straight-line method of depreciation, the following formula applies: (Historical cost - Salvage value) / No of years

Depreciation = ($250,000 - $50,000) / 5 years = $40,000 yearly

Accumulated depreciation (January 1, 2010 - July 1, 2013) for three and half years is $140,000 (3.5 years * $40,000). This means that the equipment had a net book value (NBV) of $110,000 as at the time of disposal. So, the above entries would eliminate the asset in the books and recognise the loss on disposal (sales proceed was less than the NBV).

Which of the following is a disadvantage of government provision of a public good? A. The private sector can provide all public goods at a lower cost. B. The government does not provide enough of any public good. C. The government lacks information about what people are willing to pay for the good. D. None of the above is a disadvantage.

Answers

Answer: Option (C) is correct.

Explanation:

Correct option: The government lacks information about what people are willing to pay for the good.

The government have less information about the willingness to pay of the consumers. So, this creates an obstacle for the government for a efficient provision of a public good.

So, the government have no clue about the minimum that a consumer can pay, this will lead to create problem for the government.

Government don't know to whom these public goods are to be provided.

Final answer:

A potential disadvantage of the government provision of public goods is that the government may lack clear information about what people are willing to pay for the good (C), which could lead to inefficiencies. This does not mean that private provision is always more efficient, especially in the case of essential public goods.

Explanation:

In response to your question about the disadvantage of government provision of a public good, option C indicates a potentially valid issue. This option suggests that government lacks information about what people are willing to pay for the good. Specifically, in some cases, private firms may provide services more efficiently than government because they have more capability to gauge market demand and adjust prices accordingly. However, for certain public goods like fire and police services, private provision might not be efficient or advantageous due to the nature of these services.

Learn more about Government Provision of Public Goods here:

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A debt service fund of Clifton received $100,000 from its general fund during the fiscal year ended June 30, 20X9. The cash was used to pay matured interest on Clifton's general obligation bonds, which were issued to finance construction of a new municipal building. On the statement of revenues, expenditures, and changes in fund balance prepared for the debt service fund for the year ended June 30, 20X9, the amount received from the general fund should be reported as:_____________. A. revenue.
B. a reduction of expenditures.
C.another financing source.
D. matured interest payments.

Answers

Answer: C. Another Financing source

Explanation:

The fund was received for the purpose of debt service. Debt service means repayment of loans. The funds were utilized for debt servicing. Hence, the amount should be reported as another financing source.

The objective of the funds was to repay loans and the amount was received for repayment. This amount was used to finance their debt service. So it was a financing source for the company.

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