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1 year ago

When the housing market collapsed in 2007, the demand for loanable funds decreased and caused interest rates to decrease.

1 answer:

4 0

It is False When the housing market collapsed in 2007, the demand for loanable funds decreased and caused interest rates to decrease.

Because Interest rates typically decline during recessions as loan demand slows, bond prices rise and the central bank eases monetary policy. During recent recessions, the Federal Reserve has cut short-term rates and eased credit access for municipal and corporate borrowers. No price in the economy is as important as the price of money. Interest rates arguably drive the business cycle of expansion and contraction.

Interest rate is the amount a lender charges a borrower and is a percentage of the principal the amount loaned.

Recession is a period when the business and industry of a country is not successful.

Corporate is formed into an association and endowed by law with the rights and liabilities of an individual.

To know more about the Interest Rate here

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A company uses a periodic inventory system and during the December 31, year-end physical inventory count discovered that they ha

never [62]

Answer:

Debit: Shrinkage expense $300

Credit: Inventory $300

Explanation:

When your business experiences shrinkage, you must adjust your accounting books. Record inventory losses by increasing your Shrinkage Expense account and decreasing your Inventory account.

Debit your Shrinkage Expense account and credit your Inventory account.

To adjust for shrinkage, create a journal entry that looks like this:

Debit Shrinkage expense account by $300

Credit Inventory account $300

5 0

3 years ago

In the market for crude oil, if the change in demand due to the falling price of natural gas (a substitute for oil) is greater t

murzikaleks [220]

Answer:

True

Explanation:

The effects of both changes on price is as follows:

1. The Greater Effect - change in demand due to the falling price of natural gas (a substitute for oil)

As price of natural gas, a substitute for oil, falls, demand for oil will fall pushing oil producers to respond by cutting crude oil prices in a bid to sustain demand and prevent its fall. Thus, the effect is a price fall.

2. The Lesser Effect - change in supply due to disruptions in oil-well operations in the Middle East

Due to supply disruptions which will result is a reduction in supply, the price of oil will tend to increase as consumers buy more of a commodity in less supply. Thus, the effect on price is a rise.

There, since the greater effect is a price fall, and the lesser effect is a price rise, equilibrium price is expected to fall.

8 0

3 years ago

Trendsetters has a cost of equity of 14.6 percent. the market risk premium is 8.4 percent and the risk-free rate is 3.9 percent.

BabaBlast [244]

Given:
cost of equity of 14.6 percent
market risk premium is 8.4 percent
risk-free rate is 3.9 percent
increase company's beta to 1.4 after purchase.

We will use the CAPM or Capital Asset Pricing Model formula to solve the new cost of equity.

Re = rf + (rm – rf) * β

Where:

Re = the required rate of return on equity
rf = the risk free rate
rm – rf = the market risk premium
β = beta coefficient = unsystematic risk

We need to solve for the original beta coefficient using the given cost of equity, market risk premium and risk free rate.

Re = rf + (rm – rf) * β
14.6% = 3.9% + 8.4% * β
14.6% - 3.9% = 8.4% * β
10.7% / 8.4% = β
1.27 = β

The initial beta coefficient is 1.27.

Using the same risk free rate, market risk premium, and a new beta coefficient of 1.4, we need to solve the cost of equity.

Re = 3.9% + 8.4% * 1.4
Re = 3.9% + 11.76%
Re = 15.66%

The new cost of equity after purchasing a company is 15.66%. It increase from 14.6% by 1.06%.

4 0

3 years ago

The drama club is selling tickets to its play.

alexdok [17]

a) Four inequalities

- Variables:

number of adult tickets = a

number of student tickets = s

- An adult ticket costs $15 and a student ticket costs $11

=> sale = 15a + 11s

- The auditorium will seat 300 ticket-holders =>

(1) a + s ≤ 300

- The drama club wants to collect at least $3630 from ticket sale =>

(2) 15a + 11 s ≥ 3630

(3) a ≥ 0

(4) s ≥ 0 

Graph

- Draw the s-axis, and highlight the positive part (s ≥ 0)

- Draw the a- axis, and highlight the positive part (a ≥ 0)

- Draw the line a + s = 300 ; use the points (0,300) and (300, 0) which are the extremes of the line

- Shadow the region below the line (a + s ≤ 300)

- Draw the line 15 a + 11 s = 3630; use the points (0, 242) and (330,0) which are the extrems of the line

- Shadow the region above the line (15a + 11s ≥ 3630)

The solution is the region that you shadowed twice: a triangle, located between the two inclined lines, at the left of the shadowed region.

b) List three combination of tickets that satisfy the inequalities

Choose some points that are in the solution region. For example:

1) s = 10, a = 250

2) s = 40, a = 240

3) s = 0, a = 300

7 0

3 years ago

3. What are the most important elements of Toyota’s organizational structure?

valina [46]

Toyota employs a vertical structure within its business, meaning that it heavily relies on a management driven way of self-running. Managers are highly in control of the flow of business and production. Toyota also employs a system called 'TPS' in which employees have the power to veto a product if there is a defect or reason to believe there will be a defect. This is perhaps the most important element of Toyota's organizational structure.

6 0

3 years ago