The Discount rate reflects the opportunity costs of spending funds now versus achieving a return through another investment, as well as the risks associated with not receiving returns until a later time.
Explanation:
The discount rate relates to the interest rates on loans that the Federal Reserve Bank borrows from central banks and financial institutions through the commercial bank loan mechanism.
The rate of barriers, financial assets and discount rates are all equal. The next best potential investment option with a comparable risk profile wins the rate of returns. The word ' opportunity expense' is a clear and generic concept that can be used any day of the day.
Answer: Yes, because it is a contract whose terms prevent possible performance within one year
Explanation:
The Statute of Fraud mandates that certain contracts need to be written down. These contracts include the sale of land, amounts involving more than $500 and contracts that have a timeframe of over a year.
Melinda entered into a contract with terms that have to be fulfilled in more than a year. It is therefore under the Statute of Frauds.
Answer and Explanation:
a. The current ratio is
We know that
Current ratio = Current Assets ÷ Current Liabilities
= $440,000 ÷ $200,000
= 2.2
Cash $160,000
Marketable Securities $75,000
Account receivable $65,000
Inventory $140,000
Current Assets $440,000
Account Payable $200,000
current liabilities $200,000
b
Quick ratio =( Current assets - inventory ) ÷ Current Liabilities
= ($440,000 - $140,000 ) ÷ $200,000
= 1.5
Answer: $121
Explanation:
The question simply wants us to find the present value of receiving $100 investment two years from now at a 10 percent annual discount rate.
This can be easily solved as follows:
For the first year, the $100 will be worth:
= $100 + ($100 × 10%)
= $100 + ($100 × 0.1)
= $100 + $10
= $110
The worth at the end of the second year will then be:
= $110 + ($110 × 10%)
= $110 + $11
= $121