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1 year ago

The opportunity cost of holding money is ______.

Business

1 answer:

Contact [7]1 year ago

5 0

The opportunity cost of holding money is the interest forgone on an alternative asset.

<h3>What is asset?</h3>

An asset is any resource held or controlled by a business or economic entity in financial accounting. It is anything that has the potential to provide positive economic value. Assets represent ownership value that may be transformed into cash.

A business asset is something that has current or future economic worth to the company. In essence, assets for businesses encompass anything controlled and held by the company that is today valuable or has the potential to give monetary advantage in the future. Patents, machines, and investments are some examples.

Depreciation is the systematic distribution of an asset's depreciable amount throughout its useful life. The depreciable amount of an asset is equal to the asset's cost or another number substituted for cost, less its residual value.

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On July 1 of the current year, Marcia purchases a new home and borrows $320,000. Marcia is required to pay two points on the loa

snow_lady [41]

Answer:

D) $6,400

Explanation:

To calculate the points deducted by Marcia in the current year, we use the following method

Since she collected the loan in July of the current year, there is five (5) months remaining in the current year, for Marcia to deduct any point, the will need to divide the number of month(s) remaining by the money she borrowed while we have have as;

$320,000/ 5

= $64,000

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3 years ago

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Kurnick Co. expects that the pound will depreciate from $1.70 to $1.68 in one year. It has no money to invest, but it could borr

Alik [6]

Answer:

Expected Profit of $21,000.

Explanation:

Kurnick Co. Initial amount borrowed = 1,000,000 pounds

Kurnick Co. converts the amount to dollars = 1,000,000 * 1.70 = $1,700,000.

Invests in 5% risk-free deposit.

Total dollar amount at the end of 1 year = $1,700,000 x 1.05 = $1,785,000.

Total amount owed on the pounds borrowed = 1,000,000*1.05 = 1,050,000 pounds.

Expected amount of dollars needed to repay the loan = 1,050,000 x 1.68 = $1,764,000.

Profit = $1,785,000 - $1,764,000 = $21,000.

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3 years ago

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth

djverab [1.8K]

Answer;

$ 70.07

Explanation:

The price of the stock when the dividends level off at a constant growth rate, we then find the PV of the future stock price, including the PV of all dividends during the super normal growth period. The stock start it constant growth in Year 4, so that we can be able to find the price of the stock in Year 3, which is the year before the constant dividend growth begins as:

P3= D3(1 + g) / (R− g) = D0(1 + g1)3(1 + g2) / (R− g)

P3= $3.40(1.24)3(1.06) / (.14 − .06)

P3= $85.89

Therefore the price of the stock today is the PV of the first three dividends, we then add it with the PV of the Year 3 stock price.

Hence the price of the stock today will be:

P0= $3.40(1.24) / 1.14 + $3.40(1.24)2/ 1.142+ $3.40(1.24)3/ 1.143+ $85.89 / 1.143

P0= $70.07

The current shape price is $70.07

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3 years ago

A high level of energy consumption indicates _____.

zepelin [54]

A high level of industrialization.

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