Company sold inventory with a selling price of to customers for cash. It also colected sales taxes of. The journal entry to record this information includes a.

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Answer 1

When the products are sold to the final buyer, the associated sales taxes should be deducted from the cost of inventory and recorded as an expense. The balance sheet shows the cost of inventory.

If you treat inventory as non-incidental materials and supplies, you can write off the cost of the item when it is used or consumed, not when you purchased it. The reverse of incidental materials and supplies is that you can quickly write everything off.

You give the completed

You subtract cost of commodities sold and credit the inventory of finished items. By doing this, the items are moved from inventory to costs. You would record a bookkeeping entry for a cash transaction and credit the sales revenue account for the sale when you sell the $100 item for cash.

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a firm reports ebit of $100 million. the income statement shows depreciation of $40 million. if the tax rate is 35% and total capital expenditures and increases in working capital total $10 million, what is the free cash flow to the firm?

Answers

The free cash flow to the firm (FCFF) is $65 million dollars.

FCFF = EBIT *  (1-rate of tax)  +Depreciation-Capital expenditure-Working capital changes

= $100*(1-35%)+$20-$10-$10

= $65+$20-$10-$10

65 million dollars

The amount of cash flow from operations available for distribution after depreciation, taxes, working capital, and investments is referred to as free cash flow to the firm (FCFF). FCFF measures a company's profitability after deducting all expenses and reinvestments. It is one of many benchmarks used to compare and analyze a company's financial health.

Free cash flow to the firm (FCFF) is the cash flow from operations available for distribution after depreciation, taxes, working capital, and investments are deducted.

The most important financial indicator of a company's stock value is arguably free cash flow.

A positive FCFF value indicates that the company still has cash after expenses.

A negative value indicates that the firm's revenue was insufficient to cover its costs and investment activities.

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callable bonds are advantageous to the corporation because a.callable bonds are advantageous to the purchaser, not the corporation. b.they mature on the same date. c.they can be exchanged for other securities. d.the corporation reserves the right to redeem them early.

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callable bonds are advantageous to the corporation because the corporation reserves the right to redeem them early. A callable bond yield is higher than a straight bond's yield.

A callable bond is a type of bond that gives the issuer the option to continue holding the bond and redeeming it at some point before the bond reaches its maturity date. Bonds that can be called in or redeemed by the issuer before the bonds mature are known as callable or redeemable bonds. When an issuer-calls its bonds, it pays investors the call price plus any accumulated interest up to that point and then stops paying interest.

An corporation that is authorised by the state to act as a single entity and is recognised as such in law for specific purposes is known as a corporation. This organisation is typically a company or group of people. Charters established early incorporated entities. Nowadays, the majority of jurisdictions permit the formation of new corporations through registration.

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you work for an advertising agency that is preparing a new television commercial to appeal to women. you have been asked to design an experiment to compare the effectiveness of three versions of the commercial. each subject will be shown one of the three versions and then asked her attitude toward the product. you think there may be large differences between women who are employed outside the home and those who are not. because of these differences, you should use a

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The large differences between women who are employed outside the home and those who are not are the reason one should use a block design.

When the word commercial pops up, widespread business activity and commerce come into one's mind. The organization inquires about what kind of design one would prefer to utilize. In two levels of therapy, a matched pair design is used. The two final options are the completely randomized design and the randomized block design. In a completely randomized design, only one treatment component is considered. In randomized block design a treatment factor and a blocking factor are both considered (reminder that the blocking factor is controlling for a nuisance variable like if the experimental unit is employed or not). Since this design wants to consider that, the answer is a randomized block design.

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when can raw, unpackaged meat be offered for self-service? a at mongolian barbecues or sushi buffets b only when it is of the highest quality c never d when it is frozen

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Raw unpackaged meat is offered for self-service at Mongolian barbeques or sushi buffets.

An estimated 76 million foodborne disease cases are detected annually in the US, leading to 325,000 hospital admissions and 5,000 fatalities. In the America Journal of Preventative Medicine, a multi-state study found that the annual cost of illness brought on by food-borne infections ranges from 9.3 to 12.9 billion dollars in "medical costs and productivity losses."

Most of these illnesses are spread by contact with tainted raw meat, but additional "vehicles of transmission" are cropping up more frequently due to international travel. Additionally, but not exclusively, lettuce, sprouts, fruit juices, vegetables, raw milk, and water can all contain disease-causing microorganisms. However, raw meat is typically the main source of sickness brought on by microbial infections.

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annual investments are being made so that $20,000 will be accumulated at the end of 10 years. the interest rate on these investments is initially expected to be 4 percent compounded annually. after 4 years, the rate of interest is unexpectedly increased to 5 percent, so that payments for the remaining 6 years can be reduced. what amounts should be invested annually for the first 4 years and what sums for the last 6?

Answers

The total amount invested for the last 6 years is $9388.08

The accumulated amount will be $20000 at the end of 10 years

Interest rate = 4% compounded annually

Let x be the annual investment then,

Accumulated amount = x{ (1+r)^t - 1/r}

20000 = x{(1+4/100)^4-1/(4/100)

x = 20000*4/(100*{(1.04)^10-1}

x = 1665.82

For the first four years, the annual investment is $1665.82

After 4 years interest increases to 5%, So, let after 4 years the annual deposited amount be y

So, first we calculate the accumulated amount for the first 4 years

1665.82*{(1+4/100)^4-1}/(4/100)

(1665.82*100)/4*0.1698

= 7073.84

Now this, accumulated amount will act as principal for the 6 years

7073.84*(1+5/100)^6 + y{(1+5/100)^6-1}/(5/100) = 20000

y{(1.05)^6 - 1}/(5/100) = 20000 - 7073.84*(1.05)^6

= 10520.38

y = 10520.38/{(1.05)^6-1}*5/100

= (10520.38*5)/(100*0.3400)

= $1564.68

Total investment for 6 years =  1564.68*6 = $9388.08

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Why is the interest rate one of the biggest factors when calculating the financial charges on credit cards?

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In a loan, the interest rate is considered as the biggest factors in calculating finance charges because the interest rate adds a percentage of money not already spent to pay towards the credit cards if not paid in full each month.

What is an interest rate in loan?

The term "interest rate" is a rate that tells you how high the cost of borrowing is or high the rewards are for saving. As a borrower, an interest rate is the amount you are charged for borrowing money which is shown as a percentage of the total amount of the loan.

In a loan, the finance charge means the total cost of borrowing money which includes the interest paid and any service fees by the lender which is why the interest rate is a big factor in calculating finance charges of credit cards.

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the north american industry classification system (naics) codes a. are for firms that operate in the nafta region. b. group firms by industry. c. are a perfect classification system for firms. d. a and b. e. a and c.

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The North American industry classification system (naics) codes are for firms that operate in the NAFTA region as well as group firms by industry.

So, the correct option is D.

In order to categorize commercial enterprises for the purposes of gathering, analyzing, and disseminating statistical data pertaining to the American business economy, federal statistical agencies utilize the North American Industry Classification System (NAICS). As well as regional and international organizations, individual nations have created their own standard industrial codes (SICs).

It evaluates current categorization systems and discusses the development of the North American Free Trade Agreement (NAFTA) Industrial Classification System (NAICS). In order to gather, tabulate, analyze, and disseminate statistical data describing the American economy, the U.S. Census Bureau assigns one NAICS code to each establishment based on that establishment's primary activity.

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you make annual end-of-year payments of $6,260.96 on a five-year loan with an 8 percent interest rate. the original principal amount was . group of answer choices

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A short-term loan is any amount borrowed from a financial institution for less than one year. Financing cost is high for this advance. As a result, choosing a loan with a typical term is generally recommended.

Principal amount calculation:

Payment is $6,260.96 per year, Rate (r) is 8%, and Term (n) is 5 Years.

What exactly are short-term loans?

A type of loan called a "short term loan" is used to meet a temporary need for personal or business capital. Due to the fact that it is a type of credit, it requires the principal amount as well as interest to be paid back by a certain date, typically within a year of receiving the loan.

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a(n) is defined as a large work segment comprised of several tasks that are performed by individuals.

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Duty is defined as a large work segment comprised of several tasks that are performed by individuals.

What is a work segment?

A work segment is a section of work that is assigned to an individual or group. It is often used in project management to break down a project into smaller, more manageable parts. Work segments can also be used to measure productivity or progress. Work segments can also be used to measure productivity or progress. For example, a project manager may track how much work is completed in a day, week, or month. This information can be used to identify areas of improvement or to adjust the project timeline.

Duty is described as the responsibility of an individual worker or an employee to complete work targets daily. It is important to mention that the duty can be a collection of smaller tasks that together can take the shape of a big task.

It can be concluded that duty is defined as a large work segment comprised of several tasks that are performed by individuals.

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organizational change can often lead to improved performance if successful, yet many times change efforts might fail. what is the leading reason that change efforts fail? responses

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Organizational change is the process through which a firm or business changes a key aspect of its structure, such as its culture, the operational infrastructure or supporting technology, or its internal procedures.Organizational change should be adaptive, the process of directing organizational change to a successful conclusion by making it adaptive is known as organizational change management, and it generally consists of three main phases: preparation, implementation, and follow-through. Common Reasons Organizational Change Fails :

1. Poor Planning Sets Up Organizational Change for Failure

2. Inadequate Support from Leadership

3. Lack of Resources

4. Priority Focus on Systems vs. People

5. Inadequate Change Leadership Skills

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schmidt company borrows $10,000 from its bank and signs a 6-month note. interest, which is due quarterly, is specified in the note as 6%. the 6% interest rate is a(n)

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Schmidt company borrows $10,000 from its bank and signs a 6-month note. interest, which is due quarterly, is specified in the note as 6%. the 6% interest rate is a(n) annual, 12 month rate.

What will happen to the current if an accounts payable balance is paid off?

Liabilities overall On its balance statement, a business lists accounts payable as a current liability. The debts that it intends to pay off within a year are listed in this section. The balance of the account as well as the overall amount of the company's liabilities drop when it makes payments on its accounts payable.

On a company's balance sheet, accounts payable are listed. Given that it is money owing to creditors and appears on the balance sheet under current liabilities, accounts payable is a liability. Current liabilities are a company's short-term debts, usually lasting less than three months.

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limited government licenses that create a monopoly do so because part 2 a. the license grants a marginal cost advantage. b. the firm will become a natural monopoly. c. the license is an entry barrier. d. all of the above.

Answers

Limited government licenses that create a monopoly do so because the license is an entry barrier.

Hence, option C is correct.

What do you mean by monopoly in economics?

Monopoly can be defined as  a situation where there is a dominance of a single seller in the market.  It is opposite to the concept of perfect competition. An unregulated monopoly possesses market power and can influence prices in the overall sector.

The main features revolves around

Only One Seller and Various Buyers.No Produce Replacement OptionVery Difficult to Enter in Market.Pricing Control.Government Driven. Natural Monopoly.

There are usually three types of monopoly

Natural Monopolies. State Monopolies. Un-natural Monopolies.

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what is one way in which the executive branch helps create the legal environment for human resource management?

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The President of the United States, who also serves as head of state and commander-in-chief of the armed forces, is given control over the Executive Branch. The greatest good for the greatest number of people must be the end result of human resource practices.

The President picks the leaders of all government agencies, including the Cabinet, in order to carry out and enforce the laws passed by Congress. The Vice President is a member of the Executive Branch and is prepared to take over as President if necessary.The daily enforcement and implementation of federal legislation is the responsibility of the Cabinet and independent federal agencies. These divisions and organizations have objectives that are as dissimilar from one another as the Department of Defense's and the Environmental Protection Agency's, the Social Security Administration's and the Securities and Exchange Commission's, are.The greatest good for the greatest number of people must be the end result of human resource practices.

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the most important concerns regarding the costs of fdi for the home (source) country generally center on:

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The most important concerns regarding the costs of FDI for home-country center on balance-of-payments and the employment effects of outward FDI.

What is FDI?

An entity with its headquarters in another nation makes an investment in another country in the form of controlling ownership stake in a company operating in first country. Consequently, a concept of direct control sets it apart from a foreign portfolio investment. The investment may be done "organically" by growing the operations of an existing business in the target nation, or "inorganically" by purchasing a company there. Neither method affects whether the investment qualifies as an FDI under the law. In a strict sense, foreign direct investment only refers to the construction of new facilities and a long-term management stake (10 percent or more of voting shares) in a company that operates in a different economy from the investor.

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which of the following are the primary sources of ethics requirements for tax practitioners? i. aicpa code of professional conduct ii. statements on standards for tax practice iii. circular no. 230 iv. aicpa bylaws

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The following are the primary sources of ethics requirements for tax practitioners:

i. aicpa code of professional conduct and iv. aicpa bylaws

What are ethics requirements for tax practitioners?

Tax ethics means the tax payer's ideal duties or responsibilities to pay taxes and is dependent on the relationship between the tax payer and the government. Tax ethics and tax evasion are often used interchangeably. Ethics for tax practitioners are five basic principles of ethics for tax practitioners. These are as follows:

Integrity,Objectivity,Professional competence and due care,Confidentiality, andProfessional behavior.

Therefore, three primary sources of ethics are the AICPA code and bylaws, but they only apply to those who are members of the organization, namely practicing accountants.

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Answer:

1 2 3 n 4

Explanation:

A tax practitioner is the one who gives advice and consultations by using his/her knowledge by optimally utilizing the tax law and advanced training. Regarding ethics, the judgement of the tax preparer is paramount here as the profession is not heavily regulated. Therefore, three primary sources of ethics are the AICPA code and bylaws, but they only apply to those who are members of the organization, namely practicing accountants. Treasury dept Circular no. 230 (document specifying rules, regulation, ethical provisions, and procedure to those who practice before IRS) and IRS regulations apply to others. All of these form a firm foundation for ethics in the tax preparation field..

Which method of obtaining personal information involves breaking into personal devices to steal information?

Group of answer choices

Dumpster diving

Hacking

Shoulder surfing

Phishing

Answers

The Phishing method of obtaining personal information involves breaking into personal devices to steal information.

The phishing is a type of attacks occur through a number of different mediums including cell phone messages, internet social networks, emails, standard mail and text messages.

The phishing is the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information such as passwords and bank account details like credit card number.

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creative clayworks purchases 3 pottery wheels for $1,000 each and pays $500 (total) to have them delivered to the studio. during the first year of operations, she has to have one of the machines fixed for $100. assuming a $300 salvage value, 4 year estimated life and that she uses straight line, what is her annual depreciation expense?

Answers

Her annual depreciation expense = $800

Purchase price of pottery wheels = 3 ×  $1,000 + $500 delivery charges.

                                                        = $3,000 + $500 =   $3,500.

Depreciation = Purchase price of pottery wheels - Salvage value / Estimated useful life.

= $3,500 - $300/4 Year

= $3,200/4 Year

=  $800.

Therefore, depreciation expense = $800.

The monetary fee of an asset decreases over the years due to use, put on and tear, or obsolescence. This lower is measured as depreciation. Description: Depreciation, i.e. a lower in an asset's fee, can be because of a number of different factors as nicely which include adverse marketplace conditions, and many others.

Depreciation represents the estimated reduction in the value of fixed property within a financial 12 months. Tangible belongings, which include buildings, equipment, cars, and so on, are bought in huge lump sums.

Depreciation magazine entry is the magazine access surpassed to record the discount within the fee of the fixed belongings because of everyday wear and tear, regular usage or technological changes, and so forth., wherein the depreciation account will be debited, and the respective constant asset account could be credited.

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one reason why the coffeehouse market is competitive is that group of answer choices it is trendy and therefore is likely to have a customer following. consumption takes place in public. barriers to entry are low. demand for specialty coffee is very high.

Answers

one reason why the coffeehouse market is competitive is that barriers to entry are low.

Barriers to entry are obstacles that prohibit or discourage new businesses from entering a market, even when established businesses are making excessive profits.

When addressing antitrust legislation, barriers to entry are crucial because they shield existing businesses from competition and prevent new ones from entering a market. As a result, they can lead to pricing distortions. Entry restrictions frequently result in or support the development of monopolies and oligopolies or give businesses market power.

Here are a few entry barrier examples from the market, although there are many more.

tax advantages granted to reputable businesses in a certain sector.Price cuts by well-established businesses discourage would-be competitors.patent defense.government-issued permits needed to access a particular market.

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what is the purpose or purposes of form 8-k filings by sec registrants? what specific items of information must be included in an 8-k that announces a change in audit firms?

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Form 8-K is a "current report" that companies must file with the SEC to announce significant events that shareholders should be aware of.

Other Events (The registrant may use this item to report events not expressly required by Form 8-K that the registrant believes are important to security holders.) An 8-K is a report of organizational changes that will occur. . Both the Securities and Exchange Commission and the organization's stockholders appreciate the information provided in the Form 8-K. The report shows events including bankruptcies, acquisitions and resignations of directors

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a change in which of the following would increase the short-run aggregate supply curve? i. an increase in consumer spending ii. a decrease in the price of resources iii. a decrease in labor productivity iv. an increase in capital stock

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Quantity supplied rises when price rises because a company will sell more if they can sell it at a larger profit.Sticky input prices, such as wages, and sticky output prices, often known as "menu costs," are the two factors that cause the SRAS curve to slope upward.

Unstable input costs Previously, economists held the view that all prices were negotiable.That implies that prices will swiftly adjust to changing conditions, such as a recession.

For instance, if a recession occurs, excessive unemployment will quickly cause wages to decline.Lower salaries encourage businesses to take on more employees.Greater workers equal more output, hence recessions should largely self-correct due to flexible prices (like salaries).

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martha, a marketing researcher, is currently analyzing the information collected and determining what possible opportunities it has for management. at which stage of marketing research is she?

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Martha, a marketing researcher, is currently analyzing the information collected which reflects that she is at the interpreting information stage of marketing research.

Interpreting information in marketing research helps the company to make effective strategies for sales and consumer satisfaction. It widens the scope of success of the campaigns started by the company.

Marketing data is usually collected by surveys, questionnaires, focus groups, and quantitative measures. The collected data is further researched based on the target that needs to be improved in a product.

The data is objectively reviewed and the marketing researcher provides a report on the product whether it is effective or needs improvement.

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personal wellness angela has been working for a local small business called personal wellness for the last three years. it is a retail business that sells sporting goods equipment. when she started to work there, she noticed several things that were possibly the cause of the business not doing as well as it hoped. angela has been thinking of starting her own small business because she feels she has learned much through working for personal wellness. angela's manager asked her to create a business plan for personal wellness. the manager hoped that this plan would put things into perspective to help the company do better. after creating the plan, angela suggested that personal wellness contact a group of senior and graduate students to provide management counseling for the company. angela wants to make sure that her leaving does not become the cause of the company going under. refer to personal wellness. when angela suggested that the company contact a group, what type of group was she referring to?

Answers

Angela has been working for a local small business called personal wellness for three years, and when she suggested that the company contact a group, she was referring to government regulations.

A company is a legal entity that represents an association of people, whether natural, legal or a combination of the two, with a specific goal. Members of a company work together to achieve specific, stated goals.

Unlike a typical mission statement, the company purpose seeks to address the primary reason why the business does what it does.

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galvatron metals has a bond outstanding with a coupon rate of 5.8 percent and semiannual payments. the bond currently sells for $944 and matures in 20 years. the par value is $1,000 and the company's tax rate is 21 percent. what is the company's aftertax cost of debt?

Answers

4.97% is the company's after-tax cost of debt for the par value is $1,000 and the company's tax rate is 21 percent.

the Rate formula is,

The NPER represents the time period.  

Given that,  

Present value = $944

par value  = $1,000

PMT = 1,000 × 5.8% ÷ 2 = $29

NPER = 20 years × 2 = 40 years

The formula is shown below:  

= Rate(NPER, PMT, -PV, par value, type)  

=Rate( 40,29,-944,1000,0.00)

The pretax cost of debt is 6.296%

After-Tax Cost of Debt = Pretax cost of debt × ( 1 - tax rate)

After-Tax Cost of Debt = 6.296% × ( 1 - 0.21)

After-Tax Cost of Debt = 4.97%

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which of the following will most likely occur during the contractionary phase of a business cycle? group of answer choices real gdp rises, and the unemployment rate falls. real gdp declines, and the rate of inflation rises. the sales of most businesses decline, and the unemployment rate rises. inflation rises, and employment/population ratio falls.

Answers

The majority of businesses report declining sales, and the unemployment rate is rising.

What happens in the contractionary phase of the business cycle?Business activity slows down, unemployment rises, and the economy is in trouble during a contraction.The average length of a recession is one year, though it can be longer or shorter.Following the peak and lasting until the trough, the business cycle enters its contraction phase. Businesses start to slash spending and production-related costs during the contraction phase.As the demand for goods and services starts to decline, workers may be subject to layoffs during the contraction stage of the business cycle. Contraction: The period of time from the peak to the trough is referred to as a contraction.It is a time when economic activity is declining.Indicating that businesses have scaled back their activities are rising unemployment rates, stocks entering a bear market, and GDP growth below 2% during a contraction.

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depreciation on the equipment for the month of january is calculated using the straight-line method. at the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,400. prepare the adjusting entry for depreciation.

Answers

Depreciation on the equipment for the month of january is calculated using the straight-line method is 11160.

Equipment depreciation is calculated as [cost-residual value]/[useful life].

[16000-3400]/2

= 6300

Depreciation for a month is equal to 6300*1/12, or 525.

Amounts Due at End = 46400 Beginning + 136000 - 125500-4900 + 134000 = 18600

Estimated uncollectible balance at the end = [(186000-12000)*30%] + [(12000*30%] .04]

= 3600+ 6960

= 10560

Unadjusted balance in the allowance account = 4300 – 4900 = – 600 debit

Unadjusted balance in the allowance account + anticipated uncollectible account at end = bad debt expense

= 10560 - (-600) (-600)

= 10560+600

= 11160

Depreciation is the gradual lowering of a fixed asset's recorded cost over time, until the asset's value is zero or insignificant, according to accounting terminology.

Buildings, furniture, office supplies, machinery, etc. are examples of fixed assets. The one exception, as land value increases over time, is that it cannot be depreciated.

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wherever i go in the world, i can find coca cola. it is literally sold in millions of outlets in almost every country in the world. coca cola's distribution market coverage can best be described as

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Coca-Cola can be found anywhere in the world. It is sold in literally millions of outlets in nearly every country on earth. The distribution market coverage of Coca-Cola is best described as INTENSIVE.

What is "intensive distribution"?

Intensive distribution can be defined as a marketing technique in which the company's products are made available to customers in as many locations as possible. Typically, this involves selling products at as many outlets as possible. Intensive distribution companies typically offer their items to both small local retailers and large national chains. This increases the possibility of customers finding products whenever they need them, which could result in more sales.

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what is the practice of giving a great deal of authority and decision-making freedom to lower-level managers.

Answers

Giving lower-level managers a lot of freedom in decision-making and authority is known as decentralization.

Diffusion of authority is a sign of decentralization.Decentralization is the transfer of decision-making authority to lower management levels.The fundamental stage of delegation is decentralization of authority, and the degree to which authority is not delegated is called centralization.

If decision-making is decentralized, what does that imply?

Any method in which a larger group is given decision-making authority is called decentralized decision-making.Additionally, it suggests that employees, executives, and functionaries at lower levels are given more authority.

A type of organizational structure known as decentralization is one in which upper management delegate authority to middle and lower management levels in an organization.

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he wage elasticity of labor demand calculation is group of answer choices the % change in wage divided by the % change in quantity of labor demanded. the % change in quantity of labor supplied divided by the % change in wage. the % change in quantity of labor demanded divided by the % change in wage.

Answers

The difference between the quantity of labor that is provided and the quantity that is demanded is called the surplus of labor.

The wage rate is set higher than the market wage rate when there is a labor surplus. In order to get back to the equilibrium, the wage rate falls.

Option A: The ratio of the percentage change in wage to the percentage change in the quantity of labor required is correct. This ratio is correct because wage elasticity.

What is the value of excess labor?

Marx defines surplus value as the difference between the value produced by living labor and the value paid to the worker by the capitalist in the form of wages.

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which one is not a reason that most businesses fail to raise money? select one: a. most business plans are written on ideas that are fundamentally flawed. b. they are inherently persuasive in nature and do not realistically account for critical risks. c. sources of capital are often not convinced that the industry is hot enough. d. most business plans are focused on the entrepreneur, not the customer.

Answers

Most businesses fail to raise money because sources of capital are often not convinced that the industry is hot enough.

What is the straightforward meaning of capital?

Things that add value or benefit to society include a factory and its machinery, intellectual property like patents, or the financial resources of a person or business,  fall within the broad definition of capital.

What is a business's capital?

Business capital refers to all of a company's long-term assets that are valuable both when the company is functioning and after it is sold. In accounting, capital is the total wealth or net worth of a company and its shareholders, calculated as the asset value less the liability value.

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you analyze a firm's financial statements and invest based upon the results of this analysis. which form of market efficiency may exist if you are able to earn abnormal profits on these investments?

Answers

One of the primary justifications why some investors might opt for a passive investing strategy is the Efficient Market Hypothesis (EMH).

What Is Efficient Market Hypothesis?The Efficient Market Hypothesis (EMH) fundamentally asserts that the prices of investment securities, such as stocks, already take into account all available information regarding those securities. If so, no amount of study will be able to give you the upper hand over "the market."Investors need not be logical; according to EMH, each investor will behave arbitrarily. However, the market is always "correct" overall. Simple logic dictates that "efficient" implies "normal."For instance, a strange response to a strange piece of information is typical. It's normal for you to follow the herd if they suddenly begin moving in that direction, even if there isn't a good reason to.

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