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BartSMP [9]
2 years ago
12

When Treasury bills are auctioned off, if buyers are willing to pay $900 for a $1,000 treasury bill, the government is being ask

ed to pay what percent in interest, if the bills mature after a period of one year?
Business
1 answer:
andriy [413]2 years ago
4 0

The government is paying 10% in interest.

What interest on Treasury bills?

The interest on Treasury bills compares the interest earned by the investor to the face value of the T-bill, in other words, it is determined as the interest(i.e. face value-purchase price) divided by the face value.

From an investor's perspective, I mean the person  buy purchasing the T-bill, his rate of return is the interest divided by the amount invested, which is the purchase price.

Interest=face value-purchase price

face value=$1,000

purchase price=$900

interest=$1000-$900

interest=$100

government's interest rate=interest/face value

government's interest rate=$100/$1000

government's interest rate=10%

In other words, the government by a way of issuing the bills is paying interest of 10% to the lenders

Read more on bonds generally including government bond on:brainly.com/question/22013938

#SPJ1

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Shane's Catering began with cash of $10,000. Shane then bought supplies for $2,300 on account. Separately, Shane paid $7,500 for
dolphi86 [110]

Answer:

Part (a) Shane has $ 12,300 in total assets

Part (b) Shane owes $ 2,300 in liabilities

Explanation:

Shane's Catering began with cash of $10,000

At the beginning the Accounting Records of Shane should reflect the following Account Balances

Cash $10000 (debit)

Owners Equity $ 10000 ( credit)

Shane then bought supplies for $2,300 on account.

When Shane buys supplies on account  the transaction is recorded as follows

Inventory $2300 (debit)

Account Receivable $ 2300

Shane paid $7,500 for equipment

When Shane pays for equipment in cash the transaction is recorded as follows

Equipment $7500(debit)

Cash $7500(credit)

Balance of Assets is calculated as:

Cash 10000+Inventory 2300- Cash 7500+ Equipment 7500 =$12300

Balance of Liabilities is calculated as:

Trade Receivable $ 2300

6 0
3 years ago
g A decrease in aggregate demand will cause prices to fall according to classical economists, and unemployment to increase accor
Mashcka [7]

Answer:

prices to fall according to the classical economists and unemployment to increase according to Keynes.

Explanation:

The classical economists believes that a decrease in aggregate demand for goods produced would being about fall in the prices of such goods. What this implies is that as more goods are produced, if such production is not backed by corresponding demand by consumers, the prices of such goods produced will eventually fall because supply is greater than demand.

For the Keynes, their argument is that a decrease in aggregate demand will cause unemployment to increase. This is because owners of businesses or employers would lay off their employees when goods produced exceeds the demand for such production by consumers. Here, owners of businesses pays their employees through sales of goods produced. So, when the goods produced are not purchased, then there will be excess availability of such goods; hence no sale or profit, from which salaries would be paid. The next step is to start laying off employees because employers cannot cover their running costs.

7 0
2 years ago
A bond indenture is
Lena [83]

Answer:

C. A contract between the corporation issuing the bonds and the bond trustee, who is acting on behalf of the bondholders.

Explanation:

A bond indenture specifies the contract which is between the bond issuers and bond holders. The contract specifies all the obligations owed by the issuers to the bond holders.

In this case the right definition of indenture would be a contract between the corporation issuing the bonds and the bond trustee, who is acting on behalf of the bondholders.

Hope that helps.

5 0
3 years ago
Any right to, or interest, in the land interfering with its use or transfer, or subjecting it to an obligation is known as: ____
S_A_V [24]
I Believe the answe is b
4 0
3 years ago
The management of Nebraska Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate
ankoles [38]

Answer:

The payback period is more than 5 years

Explanation:

Net present value is the Net value of all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.

Year  Cash flow    PV factor   Present Value

0       ($490,000)       1              ($490,000)

1         $40,000       0.909         $36,360

2        $10,000        0.826         $8,260

3        $120,000      0.751          $90,120

4        $90,000       0.683         $61,470

5        $180,000      0.621        <u> $111,780 </u>

Net Present Value                   ($182,010)

NPV of this Investment is negative so, it is not acceptable.  

Payback period

Total Net cash inflow of the investment is $440,000 and Initial investment is $490,000. This investment will take more than 5 years to payback the initial investment.

6 0
3 years ago
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