Answer:
a. True
Explanation:
The adaptative expectations theory assume that people base their price projections on historical data or past experience, but rational expectations assume people base their price projections on all the available information they have. Then, in addition to using historical data, they include future events analysis or conjectures. But yes, the main difference between both is that is that rational expectations theory assumes that people’s thinking about price changes include forward-looking.
Answer:
$5 million
Explanation:
As we know the asset is financed from two capital sources equity and liability.
Using Accounting equations as follow
Assets = Equity + Liabilities
Total Assets Value = Equity Value + ( Account Payable + Accrued expenses + Long-Term Debt )
As we both sides are not equal, asset are more that the sum of equity and liabilities so we need more borrowing to finance the assets.
$50 million = $25 millions + ( $8 million + $2 million + $10 million ) + Additional Borrowing
$50 million = $25 millions + $20 million + Additional Borrowing
$50 million = $45 millions + Additional Borrowing
Additional Borrowing = $50 million - $45 millions
Additional Borrowing = $5 million
Hello!
Debt ratio is liabilities/net worth. So 173/350 debt ratio or 0.494 percent debt ratio. Meaning that almost half their net worth is tied up in debt.
Hope this helps! Thank you!
Answer:
c. $596,101.17
Explanation:
We use the PV function that is presented in the attached spreadsheet. Kindly find it below:
Provided that,
Future value = $0
Rate of interest = 5% ÷ 12 months = 0.4166%
NPER = 30 years × 12 months = 360 months
PMT = $3,200
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the largest loan you can obtain is $596,101.17
Answer:
Fixed price contract
Explanation:
A fixed price contract states that price for services rendered is fixed as mentioned in the contract irrespective of time taken and resources used.
Price cannot be revised in case effort and time has increased more than expected. In this case, Mister Plow cannot ask for more money as service contracts are fixed price contracts and terms of contract including price cannot be changed.