Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and accrued items.
Answer the following statement true (T) or false (F)
True
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Creditors may contract with a debtor for discharge of the debtor's liquidated debts.
Answer the following statement true (T) or false (F)
One key conclusion of the Capital Asset Pricing Model is that the value of an asset should be measured by considering both the risk and the expected return of the asset, assuming that the asset is held in a well-diversified portfolio. The risk of the asset held in isolation is not relevant under the CAPM.
Answer the following statement true (T) or false (F)
Firms may prefer to issue cumulative preferred stock rather than debt for which reason?
A) If there is no current taxable income, preferred stock dividends are automatically voided. B) Preferred stock has no voting rights but debt does. C) Preferred dividends provide a tax shield but debt does not. D) Corporate investors can receive a tax break on dividends. E) Dividend payments are tax deductible, interest on debt is not.
Rajesh Indian Market (RIM) is open 12 months out of the year. At RIM, the demand for rice is very consistent 200 pounds per month. RIM orders the rice from a distributor in India at an ordering cost of $50 per order. Rice costs $5 per pound, and annual carrying charge is 15%. Answer question 7-11 based on this information.What is the annual ordering cost (based on the rounded up number of orders)?
A. $250 B. $200 C. $150 D. $175