Because a lower interest rate means a lower cost of borrowing money. However policies cannot be applied to today's world, because policies never considered how to increase investment spending when there is so much debt on the consumer side and government side.
Answer:
a) If the homeowner has the $6000 available for the project, what would the cost of electricity from the power company need to be greater than ($/kW-hr) to make the project viable if other investments are providing 8% interest. ($0.0545/kW-hr)
we can use the present value of an annuity formula:
PV = monthly savings x annuity factor
- PV = $6,000
- Annuity factor, 300 periods, 0.6667% = 129.52005
monthly savings = $6,000 / 129.52005 = $46.3249
price of kW-hr = $46.3249 / 850 = $0.054499851 ≈ $0.0545
b) If the homeowner had to borrow the $6000 from the bank at 5% interest for 10 years (monthly payments) what would the cost of electricity need to be greater than in $/kWhr from the power company to make the project viable if other investments are providing 8% interest. ($0.0476/kW-hr)
the monthly payment to cover the loan = PV / annuity factor
- PV = $6,000
- Annuity factor, 120 periods, 0.4167% = 94.28033
monthly payment = $6,000 / 94.28033 = $63.64
price of kW-hr = $63.64 / 850 = $0.074870588 ≈ $0.0749
Answer:
Operating cash flow= 297,000
Explanation:
Giving the following information:
EBIT= 260,000
Depreciation= 150,000
Interest= 50,000
t= 0.3
<u>To calculate the cash flow, we need to use the following structure:</u>
EBIT= 260,000
Interest= (50,000)
EBT= 210,000
Tax= (210,000*0.3)= (63,000)
Depreciation= 150,000
Operating cash flow= 297,000
Answer: d. dependability
Explanation:
Dependability is absolutely crucial in Business because it plays a leading role in Customer Satisfaction.
Can the Customer depend on you?
Can the Customer expect your services to be on time, reliable, efficient and consistent?
These are Dependability questions and the more of them a firm answers Positively, the higher the Customer Satisfaction.
Being consistent in lead time, with goods that arrive safely, and are complete is therefore a measure of DEPENDABILITY.
