Question

d) intracompany analysis. 13. Lovely Things Boutique reported revenue of $500,000 in 2017 and $446,500 in 2016. The horizontal percentage change from 2016 to 2017 is a) 9% b) 10%. c) 11% d) 12%.

Answer 1

13. d. 12%

Explanation:

Horizontal change is from py to fy. Therefore, horizontal change from 2016 to 2017 is ($500,000-$446,500)/$446,500 = 11.98%= 12% appx.

6. d. All of the above

Explanation:

Two common reasons why a company would invest in debt or equity securities are as follow:

• The company may have short-term, excess cash that it doesn't need for normal operations. This excess cash could be the result of temporary or seasonal business fluctuations, or it could be cash available for a longer term. The company wants to make the best use of its excess cash, so it invests in debt or equity securities to generate investment income. This investment income may come from interest earned from debt investments, dividends earned from stock investments, and/or increases in the market value of the security.

• The company may invest in debt or equity securities of other companies to pursue a certain business strategy. For example, a company may invest in a key vendor's debt or equity securities to further enhance a business relationship with that vendor. Doing so might strengthen the investing company's supply chain source