Answer: C. it's a good time to buy the wood.
Explanation:
$500 = 738NZ dollars, therefore 738 NZ dollar ÷ $500 = 1.476NZ dollar
The current exchange rate is $1 = 1.476NZ dollar
10 foot slab costs $5000, Tee Golf Resort will pay $ 3387.53 ($5000/1.476NZ)
if they import wood from New Zealand. Tee Golf Resort will pay less than $5000 if they import Wood from New Zealand at the current exchange rate. This is a Good time for them to import woods
Answer:
The after tax real interest rate of interest is 2%
Explanation:
The after tax real interest rate is computed as follows:
Given,
Nominal interest rate is 5%
Inflation rate is 2%
Computing before tax real interest rate as:
Before tax real interest rate = Nominal interest rate - Inflation rate
= 5% - 2%
= 3%
Computing tax:
= 20% tax on nominal interest rate
= 20% × 5%
= 1%
Now, computing after tax real interest rate as:
After tax real interest rate = Before tax real interest rate - Tax
= 3% - 1%
After tax real interest rate = 2%
Letter A and B are absolutelly incorrect. I think it is C... Not sure
When using credit, you are giving up spending in the future to spend money now. This trade off involves costs (interest). So borrowing money from your future to buy now, will cost you more in the long run that paying cash.