Answer:
Determinants of Interest Rates The real risk-free rate is 4%. Inflation is expected to be 4% this year, 5% next year, and then 4.5% thereafter. The maturity risk premium is estimated to be 0.0006 × (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security?
The nominal interest rate = 8.86%.
Explanation:
Average inflation premium = (4%+5%+4.5%+4.5%+4.5%+4.5%+4.5%)/7 = 31.5%/7 = 4.50%
Maturity risk premium for 7 year bond = 0.0006 * (7-1) = 0.36%
Nominal interest rate = real risk free rate + inflation premium + maturity risk premium = 4% + 4.50% + 0.36% = 8.86%.
Therefore, the nominal interest rate for the question given = 8.86%.
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Answer:
The entry to record accrued benefits would be a Debit to Employee Benefits Expense of $21,560
Explanation:
In order to calculate The entry to record the accrued benefits for the month we would have to calculate the following formula:
Accrued Benefits= Health Insurance Cost+ (Gross Salary × Percentage Contributable)
Accrued Benefits=$15,400+($154,000×4%)
Accrued Benefits=$15,400+$6,160
Accrued Benefits=$21,560
The entry to record accrued benefits would be a Debit to Employee Benefits Expense of $21,560
The required entries are as follows:
Dr. Cost of goods sold $770
Cr. Inventory $770
Dr. Accounts receivable $1,260
Cr. Sales revenue $1,260
What entries are required for sale of merchandise?
When merchandise is sold, the company's inventory reduces and cost of goods sold increases ,hence, the appropriate entries are to debit cost of goods sold in the income statement and credit the inventory account in the balance sheet.
Also, to account for sale on account, which means credit sales, the revenue account is credited with the sales value whereas the account receivables which represents claim from the customer is debited, this would happen for every transaction because the inventory system is perpetual.
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A. Adam Smith, Father of Modern Economics," believed that competition is a regulatory force. He argues that keeps self-interest at bay by restraining the ability to take advantage of consumers.
B. Friedrich Von Hayek, often called F.A. Hayek, believed that less government intervention gives people more economic freedom. He wrote about it in his pamphlet, "Economic Freedom and Representative Government."
C. John Maynard Keyness, according to Keynesian economics, one of the tenets of this school of thought is that government intervention is necessary for stability.
D. Milton Friedman (not Friedrich), said that the government's role in the role should be restricted. The government should not control the money supply.
