-2% are the nominal and real rates of change in their incomes. The sum of the real interest rate and the anticipated rate of inflation is referred to as the nominal interest rate.
We should mention that the real interest rate is determined as follows based on the information provided in the question:
Inflation rate - nominal interest rate
The true interest rate in this scenario will then
be:
= 3%-5%
= -2%
Real income change is -2%.
Nominal income change = 3%
The propensity of the money illusion is what causes people to believe that the salary reduction is unfair. This simply means that one considers of money in nominal terms, which is in its far value form, rather than in terms of its purchasing power, or in real terms.
A real interest rate indicates the true return on a bond and a loan (to the lender) (to the investor). The nominal interest rate is the amount that banks, debt issuers, and investment companies advertise for loans and different types of investments.
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in 2007, (nominal) interest rates were about 4.5% and inflation was about 2.8%. what was the real interest rate in 2007? group of answer choices
The real interest rate in 2007 is 1.045 / 1.028 = 1.0165; real rate = 1.65%
Interest is the price from a borrower or deposit-taking economic group to a lender or depositor of an amount above reimbursement of the foremost sum (this is, the quantity borrowed), at a particular rate.[1] it is wonderful from a rate which the borrower may also pay the lender or a few third parties. it's also awesome from dividend which is paid through a corporation to its shareholders (proprietors) from its profit or reserve, but not at a particular price determined in advance, as a substitute on a pro-rata foundation as a percentage inside the reward won by way of chance taking marketers while the revenue earned exceeds the whole expenses.
For instance, a client might generally pay hobby to borrow from a bank, so that they pay the bank a quantity that's extra than the quantity they borrowed; or a patron may additionally earn interest on their financial savings, and so they'll withdraw extra than they in the beginning deposit. On their financial savings, and so they'll withdraw extra than they in the beginning deposit.
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if the bidders at an oral auction have true values of $78, $72, $66, and $65, the item will sell for:
If the bidders at an oral auction have true values of $78, $72, $66, and $65, the item will sell for just under $78.
In the field of sociology, an oral auction can be described as a type of auction in which bidding for a project or thing is done orally. The bidding continues until the highest value is received and just that highest value remains.
Instead of normal bidding, a person has to pay money lesser than the highest value that was given in the bid. In the scenario above, as the highest value given was $ 78, so the person will have to pay a value lesser than $78.
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a firm offers a packed lunch box group discount for orders exceeding 15. two firms are taking advantage of this offer. sales to company a averages $15, 000 of annual sales, has a 22% profit margin and an expected lifetime of 8 years. company b averages $11, 000 of annual sales, has a 25% profit margin and an expected lifetime of 90 years. which is the more important customer based on the higher expected lifetime value? assume a 7% discount rate.
The most valuable customer is A because it's NPV value is $ 17916.89
What do you mean by NPV?
Net present value can be defined as the difference between the present value of cash inflows and the present value of cash outflows over a period of time. An NPV is considered as “good” if it is greater than zero.
In this case NPV of company A is
Profit per year = 22% x $ 15,000
=$ 3,300
Lifetime. = 8 years
NPV. = 3300/1.07 + 33/ (1.07 x 1.07)....
….. + 3300 / (1.07)8
= $19705. 28
NPV of company B. =
Profit per year = 25% of 11,000
= $ 2750
Lifetime. = 9 years
NPV. = 2750 / 1.07 +....... + 2750 /(1.07)9
= $ 17916.89
By analysing both cases we can find out that company A has more value because of its higher NPV.
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the outstanding bonds of winter time products provide a real rate of return of 5.6 percent. the current rate of inflation is 4.68 percent. what is the actual nominal rate of return on these bonds?
The nominal rate of return on these bonds is 10.54%.
What are nominal rate ?
Prior to accounting for inflation, the interest rate is referred to as the nominal interest rate. Additionally, it describes the rate that is stated in the loan agreement without taking compounding into account. The real interest rate for inflation adjustments and the effective interest rate for compounding adjustments are different from the nominal interest rate.
The supply and demand of money, federal government activity, the central bank's monetary policy, among many other things, can all have an impact on nominal interest rates.
The short-term nominal interest rate is a tool used by central banks to conduct monetary policy. In order to boost economic activity during a recession, the nominal rate is decreased. The nominal rate is increased during inflationary times.
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in deciding whether to establish a foreign operation, which is not a tax related factor might a multinational corporation (mnc) consider? group of answer choices different labor costs different income tax rates from competing investment locations the tax treatments of branches versus subsidiaries withholding rates on dividend and interest payments
After-tax returns from competing investment locations, The tax treatments of branches versus subsidiaries, Withholding rates on dividend and interest payments are not a tax related factor might a MNC's consider.
Any investment return that is profitable after deducting the cost of taxes is known as an after-tax return. The after-tax return is frequently used by high-income investors and businesses to calculate profits. To determine the pretax rate of return, an after-tax return can be expressed numerically or as a ratio.
For individual investors, the performance data is broken down into "real-life" form using after-tax returns. High-yield stocks and municipal bonds help investors in the highest tax bracket increase their after-tax returns. High tax rates apply to capital gains from short-term investments as a result of frequent trading.
Only income received and expenses incurred during the reporting period should be included when figuring the after-tax return.
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your company will generate $77,000 in annual revenue each year for the next seven years from a new information database. if the appropriate discount rate is 6.75 percent, what is the present value? (
The interest rate that the Federal Reserve charges banks for short-term loans is referred to as the discount rate, but the rate used to discount future cash flows in discounted cash flow (DCF) analysis is referred to as the discount rate.
The rate employed in discounted cash flow analysis to calculate the present value of future cash flows is sometimes referred to as the discount rate.
Year 1 / ( 1 + r )n Discounting at 6.75% (B)
1 1/(1.0675) 0.937
2 1/(1.0675*1.0675) 0.878
3 1/(1.0675*1.0675*1.0675) 0.822
4 1/(1.0675*1.0675*1.0675*1.0675) 0.770
5 1/(1.0675*1.0675*1.0675*1.0675*1.0675) 0.721
6 1/(1.0675*1.0675*1.0675*1.0675*1.0675*1.0675) 0.676
7 1/(1.0675*1.0675*1.0675*1.0675*1.0675*1.0675*1.0675) 0.633
Discount lending is a crucial tool of monetary policy in the banking industry and is a component of the Fed's role as the lender of last resort. If the compounding is to be done every six months, figure out the discount rate.
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a customer complained about the new toaster she had purchased because, even on the lowest setting, it burned the toast. this kind of complaint is caused by the
This kind of complaint by a customer is caused by the manufacturer.
Who is a customer?A customer is the recipient of a good, service, product, or idea in sales, commerce, or economics that they have purchased from a seller, vendor, or supplier in exchange for money or another valuable consideration. The gift economy based on favors was a mainstay of early societies. Later, as commerce grew, less long-lasting human relationships were created, relying more on momentary needs than on enduring social desires. Customers are typically defined as those who purchase goods and services, whereas clients are those who receive individualized guidance and assistance. While grocery stores, banks, and restaurants tend to prefer customers over clients, businesses like law firms, movie studios, and health care providers tend to prefer clients despite the fact that these distinctions have no contemporary semantic significance.
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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.
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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copper corporation sold machinery for $47,000 on december 31, 2018. the machinery had been purchased on january 2, 2015, for $60,000 and had an adjusted basis of $41,000 at the date of the sale. for 2018, for purposes of section 1245, what should copper corporation report?
The deal generates a profit of $6,000 as a result. The amount of money you make each year is your ordinary income.
Your regular pay as well as any bonuses, commissions, overtime, or tips collected are all included in your income. Gross annual income and net annual income are two different terms that may be used to describe it.
The total amount of money made throughout a fiscal year is referred to as annual income. Net annual income is the amount left over after all deductions have been made, while gross annual income refers to all profits before any deductions are made. Both individuals and corporations can use this idea while completing their yearly tax returns
A $6,000 ordinary income on average
2019 copper should report a typical year.
earning $ 6000
The machinery cost $ on the initial purchase.
The adjusted basis, which is $, equals the book value.
41.000.00
marketed for $47,000.00
Gain or loss: book value minus selling price.
= $ 47,000- $41,000
= $ 6000
The deal generates a profit of $6,000 as a result.
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the charter of a corporation provides for the issuance of 100,000 shares of common stock. assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired. what is the amount of cash dividends to be paid if a $3 per share dividend is declared? a.$105,000 b.$15,000 c.$500,000 d.$120,000
The amount of cash dividends to be paid if a $3 per share dividend is $105,000.
What Is a Cash Dividend?Take
40,000 - 5,000 = 35,000
then multiply 35,000 by 3 to get $ 105,000.
cash dividend = 35000* 3 = 105,000
A cash dividend is a payment made from a company's current earnings or accumulated profits that is normally distributed to stockholders. Contrary to stock dividends or other forms of value, cash dividends are paid out in cash.The board of directors must decide to pay a cash dividend, there must be enough cash on hand, and there must be enough retained earnings in order to do so.Cash dividends are among the best forms of income from stocks if you want it on a regular basis.To learn more about cash dividend refer to:
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a loan with borrow options that can be long term with periodic adjustments or short term with more frequent adjustments to the rate is a(n) mortgage.
A (n) renegotiable rate mortgage is a loan with borrow options that can be short-term with more frequent rate adjustments or long-term with periodic adjustments.
What is a mortgage with a balloon rate?At the end of the loan term, a balloon payment is a one-time payment that is larger than usual.If you have a mortgage with a balloon payment, you might pay less in the years before the balloon payment is due, but you might end up with a large balance at the end of the loan.
What kind of loan has a variable interest rate over the course of its term?A loan with a fixed rate has an interest rate that stays the same throughout the borrowing period, whereas a loan with a variable rate has an interest rate that fluctuates over time. Fixed rate loans, whose costs will never change, are typically preferred by borrowers who value predictability in their payments.
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what might explain why the insurance companies would require a slightly higher effective annual yield on the coupon bonds compared to the bonds with no coupons?
Bonds with longer maturities yield more than those with shorter maturities under a normal yield curve. Regular coupon interest payments are like little zero-coupon bonds that mature earlier since they are due before the bond's maturity date.
Because zero coupon bonds do not offer any coupons that can be reinvested, long-term bonds have higher yields than short-term bonds under a normal yield curve. Interest payments shorten the waiting period and lower the risk, which lowers predicted returns as well.
The return on a bond when the bondholder reinvests interest payments (or coupons) at the same rate is known as the effective yield. In contrast to nominal yield, which is the reported interest rate of the investment, effective yield is the overall yield received by the investor.
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louvers, incorporated, accepted a $15,000, 180-day, 10 percent note from a customer on may 31. louvers plans to prepare financial statements as of june 30, the end of its fiscal year. prepare the necessary june 30 adjusting entry for louvers by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns
The interest of $750 (computed as $15,000 × 10% × 180/360) is due at maturity. Between June 30 and November 27, a total of 150 days passed.
The November 27 entry has a debit to Cash for $15,750 (computed as $15,000 + $750),a credit to Interest Revenue for $625 (computed as $15,000 × 10% × 150/360), a credit to Interest Receivable for $125, and a credit to Notes Receivable for $15,000 (the principal).
In finance and economics, interest is the payment by the borrower or deposit-taking financial institution to the lender or depositor of an amount in excess of the repayment of the principal at a specified rate. It is different from a fee that a borrower can pay to a lender or a third party. Interest is earned by the lender on the use of the funds or paid by the borrower on the use of those funds.
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true or false: there are only two basic types of businesses: service businesses and manufacturing businesses.
There are only two basic types of businesses: service businesses and manufacturing businesses, it is false.
What are two basic types of businesses?The following are the two basic types of businesses:
Sole proprietorship - A sole proprietorship, also known as a sole tradership, individual entrepreneurship, or proprietorship, is a form of business owned and operated by a single person with no legal distinction between the owner and the business organization. A solo trader may not always work alone and may hire others.Partnerships - A partnership is an agreement in which two or more people, known as business partners, agree to work together to further their shared interests. Individuals, businesses, interest-based organizations, schools, governments, or combinations can form partnerships.To learn more about businesses, click
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would the u.s. economy be better off without government intervention in agriculture? who would benefit? who would lose?
The agriculture sector is complicated since it consists of privatised farms that follow rules and procedures that virtually qualify them as public goods. The question of whether the government ought to get more involved in the agriculture sector is still up for discussion.
Except for just ensuring that farms are employing safe procedures to cultivate their food, the United States would be better off without any government involvement in agriculture. In other words, the government would keep an eye out to make sure farmers weren't using banned items, pesticides, or grazing animals that would transmit illness. However, when the government intervenes in any sector of the private sector, sets pricing, or acquires a share in any property or resource that has been privatized, it greatly dilutes its influence, and the overall effectiveness and quality of the end result typically suffer.
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the currency traders who seek to minimize their risk of exchange-rate fluctuations, often by entering into forward contracts or similar financial instruments are called .
Hedgers are currency traders who attempt to reduce their exposure to exchange-rate fluctuations, frequently through the use of forward contracts or other financial instruments.
A fund or person who hedges is called a hedger. A hedge is something that guards against potential financial losses. There are numerous financial instruments products available to help protect against any kind of monetary loss.
For instance, a fund can buy commodities like gold to protect itself Hedgers against inflation, which will depreciate the value of its cash financial instruments holdings. Gold is regarded as a natural inflation hedge for this reason. Hedgers are currency traders who attempt to reduce their exposure to exchange-rate fluctuations, frequently through the use of forward contracts or other financial instruments.
In essence, a hedge is a protection tool, and a hedge is a person who Hedgers employs such tools. Another classification of hedge is insurance.
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am's boss asked him to compile sales figures for the past three years, william pulled together the information and turned it over to his boss. after several days of not getting any feedback from his boss, william worried that he hadn't done a good job in presenting the information. william is demonstrating:
After several days of not getting any feedback from his boss, William worried that he hadn't done a good job of presenting the information. William is demonstrating low self-esteem.
For an organization to have success and recognization diversity and inclusion are quite important. To recognize an individual, value an individual, respect individuality, and furthermore, make use of the different perspectives make an organization head towards prosperity and success. Organizations make this possible by embracing diversity, introducing new opportunities, and encouraging employees to participate further.
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define what liquidity means by completing the following sentence. liquidity refers to a company's ability to pay for its (near/long) -term obligations.
Liquidity is the simplicity with which money can be raised to cover short-term liabilities like bills.
Stocks and bonds are examples of liquid assets since they are easily sold (although cash is, of course, the most liquid asset of all). A business needs to have enough cash on hand to pay all of its bills, pay its suppliers, pay its employees, and conduct its daily business. In the event of an emergency or other monetary setback, you have access to liquidity in the form of your emergency savings account or the cash you have on hand. Additionally, having liquidity is important since it enables you to take risks.
When wonderful possibilities present themselves, it will be easier for you to pass them up if you have access to money and resources. Liquid assets include cash, savings accounts, and checkable accounts since they can easily be changed into cash when needed.
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what explanation best characterizes post-scarcity economics? a. technological advancements such as robotics measn that people are free to prusue their hobbies. b. increasing wealth has satisfied material needs, so aesthetic needs become more prominent. c. humans have perfected the fundamental mechanism of the economy so that only individual drive determines one's success. d. a surplus of wealth leads to a willingness to a more equitable distribution of that wealth.
The explanation that best characterizes post-scarcity economics is option A. technological advancements such as robotics means that people are free to pursue their hobbies.
The increasing automation of physical labour by robots in the more immediate future is frequently proposed as a way to create a post-scarcity economy. Given the right instructions, the required raw materials, and the appropriate energy, these shapes open the door to the possibility of systems that can mechanically make any specified commodities. Thus, option A proves to be the right choice.
In a hypothetical post-scarcity economy, the majority of commodities can be produced in vast quantity with little human effort required, making them widely accessible to everyone for very low prices or even for free.
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retained earnings of $100,000 represent a corporation's cumulative earnings blank and is shown on the blank . multiple choice question. declared; statement of retained earnings and income statement in cash; balance sheet not paid out by dividends; balance sheet and statement of retained earnings
Balance sheet and statement of retained earnings.
What is Balance sheet ?In accounting, a balance sheet refers to the summary of the financial balance of an individual or organization, whether it is a sole proprietorship, partnership, corporation, limited liability company, or other organization such as a government or non-profit organization. First, assets, liabilities, and equity are listed as of a particular date (such as the end of the fiscal year). A balance sheet is often referred to as a "snapshot of a company's financial position." Of the four basic financial statements, the balance sheet is the only financial statement that relates to a specific point in the company's calendar year. A typical corporate balance sheet has two pages. Assets on the left and Funding on the right. debt and equity. The major categories of assets are usually listed first, usually in order of liquidity. Assets are followed by liabilities. The difference between assets and liabilities is called the company's equity or net worth or net worth or equity, and according to the accounting equation, net worth should be equal to assets minus liabilities.To learn more about Balance sheet from the given link :
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production part approval process (ppap) is group of answer choices a milestone of the apqp process a snapshot in time statement of conformance statement of acceptance all of the above
Production part approval process (ppap) milestone of the apqp process a snapshot in time statement. The Production Part Approval Process (PPAP) is a standardized process in the automotive and aerospace sectors that assists manufacturers.
Suppliers in communicating and approving production designs and processes prior to, during, and after manufacturing. PPAP is a byproduct of APQP. The goal of any Production Part Approval Process (PPAP) is to ensure that a supplier can meet the customer's manufacturability and quality statement. PPAPs are the responsibility of suppliers, not customers. This means that a supplier must maintain a quality system that documents all of the requirements of a PPAP submission.
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what method of handling conflict uses an independent third party and avoids the costs of litigation and unilateral decision making?
Alternative dispute resolution is the method of handling conflict uses an independent third party and avoids the costs of litigation and unilateral decision making.
What do you mean cost?A cost is the value of money that's been used to create something or deliver a service and is now unavailable for use in manufacture, doing research, selling it to consumers, and preserving bank documents. When calculating a purchase price, the sum of the acquisition's costs is taken into account.
What are cost examples?Raw materials, personnel, and other output expenditures such as distribution charges are all called strategic costs. It is simple to link the expense to a specific project, division, or product.
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which of the following are responsibilities of order getters? (check all that apply.) multiple select question. informing customers about new goods and promoting them to all channel members completing sales transactions finding new business opportunities establishing relationships with new customers
Order getter should informing customers about new goods and promoting. Also finding new business opportunities establishing relationships with new customers.
Who are Order getter ?Order getter is a salesperson who actively attempts to persuade consumers to purchase rather than only taking orders that the customers voluntarily place.Order-getters include, for instance: Account executives: A salesperson tasked with managing a client relationship is known as an account manager. They frequently maintain ongoing relationships with their customers, which leads to numerous sales over time.A company's sales teams are made up of varied individuals who each bring special talents to the table. Your sales skills can be improved by utilising a variety of techniques, and the best technique to use will depend on your selling style, product, and industry.Order takers rely on the consumer to make their own purchasing decisions. Order takers get to know their clients and have an impact on their purchasing decisions. Building trust with your potential buyer should take up the majority of your effort when you're trying to sell something.To learn more about Order getter refer :
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numerous environmental laws and regulations have recently changed. senior management has asked the chief audit executive to perform an environmental audit to be completed as soon as possible. the internal audit activity currently is performing an operational audit. as a result, the chief audit executive must make difficult decisions about resource allocation. which of the following is the least significant issue in determining whether to reallocate audit resources? the results from the prior financial audits. the potential fraud discovered during the operational audit. potential cost to the organization for noncompliance with the new environmental laws and regulations. the knowledge, skills, and competencies of the internal audit staff.
The least significant issue is the results from the prior financial audits in determining whether to reallocate audit resources.
Allocation of resources is done by the internal auditors after analyzing and determining the availability of resources in order to establish the engagement objectives in the environmental audits. There are certain factors that need to be considered in the allocation process:
Full information regarding both ongoing audits and new engagements.The consequences of not completing either engagement within a time limit.The knowledge, skills, and competencies regarding allocating resources and precision work of the internal audit staff with due professional care.Knowing prior audit details is irrelevant and least significant in determining of reallocation of resources.
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why are marginal revenue and price equal for competitive firms? price equals marginal revenue because price is constant for all levels of output. price must decrease as quantity increases. price is the same as total revenue. the demand curve is upward sloping.
Marginal revenue equals price and average revenue for a perfectly competitive business. This suggests that the firm's short-run supply curve for values greater than average variable cost is its marginal cost curve.
The business closes down if the price falls below the average variable cost.
How Does Marginal Revenue Work?
Marginal revenue is the additional revenue generated by selling one more output unit. The law of diminishing returns dictates that marginal revenue can remain constant over a certain output level, but it will eventually slow as output rises. Perfectly competitive businesses, according to economic theory, continue producing goods until marginal cost equals marginal revenue.
Marginal Revenue is the difference between the change in revenue and the change in quantity.
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How many more monthly payments are made for a five-year loan than for a two-year loan?.
Answer:
36
Explanation:
9) suppose you own a house that you are renting out to a group of college students for the 10-month academic year. you are charging $1,000 per month in rent. you will collect the first rent payment today and then on the first of the month each month thereafter. what is the value of this investment opportunity to you today if you could reinvest your income at an annualized rate of 6%?
Answer: $9779.06
Explanation:
Given,Period = 10 months Rent = $1000 per monthSince, rent is received on 1st day of the month, total number of future cashflows is 9 months. Rate of interest = 6% annual, therefore, interest per month = 6%/12months = 0.5%Present Value of Future Cashflows = Cashflow x PVIFA (Rate of Interest, Period)= $1000 × PVIFA (0.5%, 9)=$1000 × 8.77906= $8779.06Value of Investment = present value of future cashflows + rent received today = $8779.06 + 1000= $9779.06
The management function that involves creating a vision for the organization, communicating it to others, and motivating them to achieve goals is?.
The management function that involves creating a vision for the organization, communicating it to others, and motivating them to achieve goals is leading.
Leading can be described as the ability of a management head to power his employees to work towards the goals set in the objectives of a company.
Leading is an important aspect of management where the leader set clear goals for a company, is able to express these goals to the employees of the company, and motivates them to work harder for achieving these goals.
Leading also involved the ability of a manager to strategize and assess the proceedings and work of employers of the company.
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for the first few workers that a firm hires, marginal product and average product are both increasing. which is greater, marginal product or average product?
For the first few workers that a firm hires, marginal product and average product are both increasing. Here, the Marginal product Greater Than Average product.
The marginal product is growing and is above average for the first few quantities of the variable input (workers). An increasing average product would explain this.
In this early stage of production, for instance, if Waldo (owner of Waldo's TexMex Taco World) adds a new employee, their marginal product (i.e., additional contribution) will be higher than that of the current employees. As a result, this raises the mean for all employees.
Because the marginal is greater than the average, average product continues to rise even after the law of diminishing marginal returns takes effect and marginal product declines.
The extra output produced as a result of more input going into a business is known as the marginal product.
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you find a zero coupon bond with a par value of $10,000 and 20 years to maturity. the yield to maturity on this bond is 4.2 percent. assume semiannual compounding periods. what is the dollar price of the bond?
Thus the dollar price of the bond is $4,355
What does it mean to have a bond with no coupons?No interest is paid over the course of a bond having a zero coupon rate. Instead, buyers of zero-coupon bonds make their purchases at a significant discount to the bond's face value, which is the sum they will get when it "matures" or becomes due. With mature length, the price sensitivity rises.
Therefore, if you want to bet on interest rates moving in a certain direction, zero coupon bonds are your best choice to maximize profit from any rate movement. Zero-coupon bonds can be secured or unsecured. They are issued at a material discount to face value due to the fact that they pay all interest at maturity and make no interim payments.
Given,
The Zero coupon bond with par value = $10,000
The maturity time period (in years) = 20 years
The yield to maturity (YTM) (in percentage) = 4.2% = 0.042
The value of the bond = par value/ (1+YTM÷2)^(Maturity period)
= 10000 / (1+0.042÷2)²⁰
= 10000 /(1+0.021)²⁰
PV (price of the bond)= $4,355
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