The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk. To describe: The way given industry condition will result in business risk.

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Answer 1

Question

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

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4. On August 20, Mr. and Mrs. Cleaver decided to buy a property from Mr. and Mrs. Ward for $105,000. On August 30, Mr. and Mrs. Cleaver obtained a loan commitment from OKAY National Bank for an $84,000 conventional loan at 5 percent for 30 years. The lender informs Mr. and Mrs. Cleaver that a $2,100 loan origination fee will be required to obtain the loan. The loan closing is to take place September 22. In addition, escrow accounts will be required for all prorated property taxes and hazard insurance; however, no mortgage insurance is necessary. The buyer will also pay a full year's premium for hazard insurance to Rock of Gibraltar Insurance Company. A breakdown of expected settlement costs, provided by OKAY National Bank when Mr. and Mrs. Cleaver inspect the uniform settlement statement as required under RESPA on September 21, is as follows: I. Transactions between buyer-borrower and third parties: a. Recording fees--mortgage b. Real estate transfer tax c. Recording fees/document…

Answer 2

Question

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

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Answer 3

Question

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

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Answer 4

Question

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

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Answer 5

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 6

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 7

Chapter 4, Problem 4.30P

A

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 8

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 9

B

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 10

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 11

C

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 12

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 13

D

To determine

Introduction: The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc. is known as business risk.

To describe:The way given industry condition will result in business risk.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 4 - Prob. 4.1RQ Ch. 4 - Prob. 4.2RQ Ch. 4 - Prob. 4.3RQ Ch. 4 - Prob. 4.4RQ Ch. 4 - Prob. 4.5RQ Ch. 4 - Prob. 4.6RQ Ch. 4 - Prob. 4.7RQ Ch. 4 - Prob. 4.8RQ Ch. 4 - Prob. 4.9RQ Ch. 4 - Prob. 4.10RQ

The possibility that the profits of an entity will fall due to uncertainties like change in tastes and preferences of the customer, change in taxation policies, natural calamities, etc.is known as business risk. To describe: The way given industry condition will result in business risk.

Solution Summary: The author explains that a sudden fall in demand would decrease the profit earning capacity of the business and hence exposure to more business risk.

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