Suppose Edison would like to invest $10,000 of his savings. One way of investing is to purchase stock or bonds from a private company. Suppose TouchTech, a hand-held computing firm, is selling bonds to raise money for a new lab?a practice known as (equity or debt) finance. Buying a bond issued by TouchTech would give Edison (an IOU, or promise to pay, from or a claim to partial ownership in) the firm. In the event that TouchTech runs into financial difficulty, (the stockholders or Edison and the other bondholders) will be paid first. Suppose instead Edison decides to buy 100 shares of TouchTech stock. Which of the following statements are correct?a. TouchTech earns revenue when Edison purchases 100 shares, even if he purchases them from an existing shareholder. b. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Edison's shares to decline. c. An increase in the perceived profitability of TouchTech will likely cause the value of Edison's shares to rise. d. Alternatively, Edison could invest by purchasing bonds issued by the government of Japan. Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a (higher or lower) interest rate than a bond issued by the government of Japan.

Daniel owns 100 shares of abc corporation's common stock. abc uses the fair value option, and recent declines in the firm's credit rating have caused the value of the firm's outstanding bonds payable to drop by 10%. daniel feels this is good news, but he wants to know what you think about the situation. which of the following represents your best response? a : "this situation may be positive for you in that the change in abc's credit standing indicates that the value of the firm's assets is likely increasing. however, the drop in bond value may negate any positive effects on your bottom line, because it means your claim on the firm's assets is simultaneously decreasing." b : "actually, this is bad news all around. the drop in the value of abc's bonds payable means shareholders' claims on the firm's assets have decreased. moreover, abc's declining credit rating means that the firm's assets are probably also dropping in value, thus magnifying your losses even more." c : "on the surface, this seems like good news because it means your claim on the firm's assets has increased. however, the drop in creditworthiness may also indicate that abc's assets are declining in value, thus offsetting any gains associated with the drop in bonds payable." d : "you're right! this is good news because it means that abc's debtholders have a decreased claim on the firm's assets. as a result, the firm's existing shareholders"like you"have seen their claim on the firm's assets increase."

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?

What should a food worker use to retrieve ice from an ice machine?