The definition of proprietorship, partnership , and corporation.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Don't solve this question with unclear data. i will give unhelpful rating . please skip this qn

The prodave paint company earned a net profit margin of 20% on revenues of $20m this year. Fixed Capital Investment was $2 m and depreciation was $3 m. Working capital Investment equals 7.5% of the Sales level in that year. Net income, fixed Capital Investment, depreciation, interest expenses and sales are expected to grow at 10% per year for the next 5 years. After 5 years, the growth in sales , net income, depreciation and interest expenses will decline to a stable 5% per year and fixed Capital Investment and depreciation will offset each other. The tax rate is 40% and the prodave has 1 m shares of common stock outstanding and long term debt paying 12.5% interest trading at it's par value of $32 m. The WACC is 17% during the high growth stage and 15% during the stable growth stage. Required: a) Calculate FCFE b) Determine FCFF c) Estimate the value of Equity d) Calculate the value of the Firm

A key dynamic within any Multi-National Corporation (MNC) is cash and foreign exchange risk exposure. Cash management is critical and also heavily influenced by global dynamics, especially since COVID-19. Within the Caribbean and North American jurisdiction, the economic framework is tightly connected with the major Asian economies of China, the United Kingdom and Japan. The Caribbean and the North American economy have been a barometer of the global economic cycle.) For both Caribbean and North American economies, many Multi-National Corporations have made significant investments to reduce the production cost of goods and diversification benefits. Despite the benefits that could materialize, some North American countries have not been resilient through Global market shocks. Given this context, the following questions require research within the Caribbean context and current market dynamics since COVID-19. Your Manager has asked you to address the following concerns in the report 1)…

Answer 2

Question

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Answer 6

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

Answer 7

Chapter 1, Problem 1Q

a)

Summary Introduction

To determine: The definition of proprietorship, partnership, and corporation.

Answer 8

a)

Expert Solution

Explanation of Solution

A company owned by one individual is a proprietorship or sole proprietorship. When more than two persons are associated to organize the business, a partnership exists. Corporation, on the other hand, is a state-created legal entity. The organization is independent of its owners and managers.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

Answer 13

b)

Summary Introduction

To determine: The definition of limited partnership, limited liability partnership, professional corporation.

Answer 14

b)

Expert Solution

Explanation of Solution

Under a limited partnership, the liabilities, control of limited partners and investment returns are limited, while the liability and control of general partners are unrestricted. A limited liability partnership, also referred to as a limited liability company, blends a corporation's limited liability advantage with a partnership's tax benefits. A private company known as a professional association in some countries, have more of incorporation privileges, nevertheless members are not exempted from professional liability (malpractice).

Answer 15

b)

Expert Solution

Answer 16

b)

Expert Solution

Answer 17

Expert Solution

Answer 18

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

Answer 19

c)

Summary Introduction

To determine: The definition of stockholder wealth maximization.

Answer 20

c)

Expert Solution

Explanation of Solution

Maximizing Stockholder wealth is the right objective for management choices. To maximize the price of the common stock of the firm, the timing and risk related with cash flow and EPS are considered.

Answer 21

c)

Expert Solution

Answer 22

c)

Expert Solution

Answer 23

Expert Solution

Answer 24

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

Answer 25

d)

Summary Introduction

To determine: The definition of production opportunities, time preferences for consumption.

Answer 26

d)

Expert Solution

Explanation of Solution

Opportunities for production are the returns arising from productive assets investment within an economy. The more the chances of growth, the higher the producers are eager to make payments for the required capital. The priorities in the consumption time apply to the desired consumption pattern. Consumer's consumption time expectations decide the amount of consumption they are ready to accept, and therefore save, at diverse interest rates.

Answer 27

d)

Expert Solution

Answer 28

d)

Expert Solution

Answer 29

Expert Solution

Answer 30

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.

Answer 31

e)

Summary Introduction

To determine: The definition of foreign trade deficit.

Answer 32

e)

Expert Solution

Explanation of Solution

When individuals and businesses in Country U experience a foreign trade deficit. S. Import more goods than they are exported from foreign countries. Trade deficits need to be funded, and debt is the main source of funding. Therefore, debt financing increases as the trade deficit rises, uplifts the rate of interest.

Interest rates of Country U must be consistent with the foreign interest rates when the Federal Reserve tries to fix the interest rates beneath the foreign rates, the investors will sell the Country U bonds, which leads to higher Country U bond prices, it leads to higher rate of country U. Therefore, when the trade deficit is high comparative to the portion of the complete economy, the ability of the Fed to battle a decline by way of lowering the interest rates may be hampered.