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1 year ago

If the united states experiences lower personal savings rates, then it must be the case that?

1 answer:

8 0

If the united states experiences lower personal savings rates, then it must be the case that any increase in domestic investment must be financed by foreign funds.

Because consumer spending accounts for roughly 70% of the US economy, even a small reduction in consumer spending can reduce aggregate demand and economic activity. A falling saving rate, on the other hand, may result in temporarily faster economic growth as people spend a larger portion of their earnings on goods and services.

National savings in the United States have fallen in recent decades as a result of lower private savings rates and higher federal budget deficits. A low national savings rate is especially troubling given the large number of workers retiring now or soon in the United States. With fewer workers able to save and more people drawing down those savings as retirees, government budget deficits are likely to rise further. This reduces the national savings rate even further, harming future economic growth and living standards. Due to low saving rate the US needs to borrow foreign funds for domestic investment.

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Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchase

Savatey [412]

Answer:

The correct option is B.

Explanation:

It is given that Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August.

Purchase in July = $180,000

Purchase in August = $210,000

Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase.

In August, the cash disbursements for materials purchases be 3/4th of $210,000 (Purchase in August) and 1/4 of $180,000 (Purchase in July).

August's cash disbursements for materials purchases be

$Amount=\frac{3}{4}\times 210000+\frac{1}{4}\times 180000$

$Amount=157500+45000$

$Amount=202500$

The August's cash disbursements for materials purchases be $202500. Therefore the correct option is B.

4 0

3 years ago

Helen Ashley is expecting cash flows of $50,000, $75,000, $125,000, and $250,000 from an inheritance over the next four years. I

romanna [79]

Answer:

Present value of Helen's inheritance is $361,997.25

Explanation:

We know,

Present value of cash flows = ∑ $\frac{Cash flow for n periods}{(1 + i)^{n} }$

Given,

Cash flows for 1st, 2nd, 3rd, and 4th year = $50,000, $75,000, $125,000, and $250,000.

Interest rate, i = 11% = 0.11

Number of period, n = 4

Therefore,

Present value of cash flows = [$50,000 ÷ $(1 + 0.11)^{1}$ ] + [$75,000 ÷ $(1 + 0.11)^{2}$ ] + [$125,000 ÷ $(1 + 0.11)^{3}$ ] + [$250,000 ÷ $(1 + 0.11)^{4}$ ]

Present value of cash flows = ($50,000 ÷ 1.11) + ($75,000 ÷ 1.2321) + ($125,000 ÷ 1.3676) + ($250,000 ÷ 1.5181)

Present value of cash flows = $45,045.05 + $60,871.68 + $91,400.99 + $164,679.53

Present value of cash flows = $361,997.25

Therefore, Present value of Helen's inheritance is $361,997.25

5 0

3 years ago

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belka [17]

Explanation:

Great advertising.

5 0

2 years ago

Read 2 more answers

Helen spent the last 85 days of 2020 in a nursing home. The cost of the services provided to her was $27,625 ($325 per day). Med

Vsevolod [243]

Answer:

Amount included in gross income of Helen is $0.

Hence, There will be no effect upon the gross income of Helen.

Explanation:

Data Given:

Number of Days Helen Spent = 85 days

Cost of the services = $27,625

Medicare Paid = $8400

Benefits received = $15440

Assumption: Federal Daily Excludible amount = $380

Solution:

Daily Statutory amount = Daily Excludible amount x number days spent

Daily Statutory amount = $380 x 85 days

Daily Statutory amount = $32300

We know that,

Amount of Medicare Paid = $8400

So, now we need to calculate the amount of exclusion first.

1. Amount of Exclusion = cost of the services - Medicare paid

Amount of Exclusion = $27625 - $8400 = $19225

So, now we calculate the amount included into the gross income of Helen.

2. Amount included in gross income = Benefits Received - Amount of Exclusion

Amount included in gross income = $15440 - $19225

Amount included in gross income = -$3785

Here, we will not cater the negative, which means that amount included in gross income of Helen is $0.

Hence, There will be no effect upon the gross income of Helen.

5 0

3 years ago

Easy Car Corp. is a grocery store located in the Southwest. It expects to pay an annual dividend of $6.30 next year to its share

emmainna [20.7K]

Answer:

Missing question <em>"1. What is the cost of debt for Easy Corp? 2. How many interest payments are left for the bond of Easy Corp? 3. What is the interest payment per period for the bond? 4. What is the discount rate per period to use in pricing the bonds? 5. What is the market value of equity for Easy? 6. What is the cost of equity for Easy?"</em>

<em />

1. Cost of debt is equal to YTM, which is equal to 10%

Cost of debt = YTM = 10%

2. Number of interest payment to be made is equal to 26 * 2 = 52

This is because payment is made semi annually

3. Interest payment per period = 8.9141% / 2 * $1,000

Interest payment per period = 4.45705% * $1,000

Interest payment per period = $44.57

4. As the period is semiannual, discount rate per period is equal to 10% / 2 = 5%

5. Market value of equity = 600,000*60 = $36,000,000

6. Cost of equity = Dividend price + Growth rate

Cost of equity = 6.3/60 + 0.05

Cost of equity = 0.105 + 0.05

Cost of equity = 0.155

Cost of equity = 15.5%

7 0

3 years ago