Describe the impact inflation has on investing.
What will be an ideal response?
Inflation is simply the rate of increase for the price for goods and services. Cars, bread, houses, milk, diapers, clothes, and even candy bars get more expensive as time goes on. If the prices of these goods and services increase, your purchasing power decreases. So what does this have to do with investing? The purpose of investing is to help you increase your wealth. However, the word 'wealth' is a relative term. The goal of your investments is to allow you to buy more in the future with your money than you can buy now. In other words, you want to increase your wealth at a rate that exceeds the rate of inflation. Otherwise, you could just stick your money under your mattress until you were ready to spend it. Historically, prices increase an average of 3% to 4% per year. That means if your investments average a 4% return or less, you lose purchasing power. Your goal when investing is not just to avoid losing purchasing power; you want to gain purchasing power in the future. You want your money to work for you and grow faster than inflation so you can purchase more with your money when you take it out. After all, you are making a sacrifice when you invest, because you are giving up the use of your money today. You want to be compensated for that sacrifice by earning more than inflation takes away. You don't just want to be able to buy a candy bar; you want to be able to buy the king size candy bar! This is why you have to get comfortable with risk.
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Indicate whether the statement is true or false
Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAPierce Co. paid $40,000 cash to purchase land.Assets Liabilities Equity Revenues Expenses Net Income Stmt of Cash Flows???????
What will be an ideal response?
The kiddie tax limits the tax savings from a transfer of income-producing property to a minor child by taxing a portion of such income at the tax rates applying to estates and trusts.
Answer the following statement true (T) or false (F)
Life Products Inc. enters into a contract to sell medical supplies to Med Clinic, which later sells some of the items to Nina, a patient and consumer. Article 2 of the UCC applies to
A. both transactions. B. the sale from Life Products to Med Clinic only. C. the sale from Med Clinic to Nina only. D. none of the transactions.