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3 years ago

1. Given the nominal interest rate of 17% and the expected inflation of 13%, then the value of the real interest rate is ___ ?

Business

1 answer:

Veronika [31]3 years ago

6 0

Answer:

According to fisher equation

(1+nominal Interest rate)=(1+real interest rate)(1+inflation)

1) So 1.17=(1+R)(1.13)

1+R=1.17/1.13

R=1.035-1

R=0.0353

Real interest rate = 3.53 percent

2) (1+NIR)= 1.03*1.04

1+ NIR= 1.072

NIR= 0.072

Nominal interest rate = 7.2 percent

A lender prefers a higher real interest rate as he will earn more money on the amount he has lend if the real interest rate is higher.

A borrower will prefer a lower real interest rate as he will have to pay lower interest payments on an amount if the real interest rate is lower.

Explanation:

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Gross Investment $18

Naya [18.7K]

Answer:

$75 billion

Explanation:

Recall that

Disposable Income = Personal Income - (Personal taxes + other deductions)

Disposable income = Consumption + Savings.

Given that

Personal Consumption expenditure = $70 billion

Savings = $5billion

We use the second formula.

Thus,

Disposable income = 70 + 5

= 75

Hence, from the given set of data, disposable income = $75 billion.

4 0

3 years ago

Autocratic managers tend not to _____. take orders then pass them along invite employees to plan work schedules assume everyone

larisa86 [58]

There are several type of leadership styles that a manager can exhibit according to the type of subordinates that she or he is managing and the type of situation that he or she is facing. These styles are autocratic, democratic, and laissez-faire.

From these leadership styles, the behavior that best exemplifies one that an autocratic leader would showcase is refusing to consider options from employees.

4 0

4 years ago

Read 2 more answers

Which sentence is an oxymoron?

olasank [31]

Answer:

You didn't attach any sentences, so I'm assuming that you want a definition. According to literarydevices.net, "Oxymoron is a figure of speech in which two opposite ideas are joined to create an effect....such as 'cruel kindness,' or 'living death'." I hope this helps.

7 0

3 years ago

Read 2 more answers

JoPacks sold 500 backpacks in September. Total variable costs were $7,500, total fixed costs were $10,000, and profit was $4,000

aivan3 [116]

Answer:

$18,000

Explanation:

Total revenue - total cost = profit

total cost = variable cost + fixed cost

when 500 units were sold

total revenue - ( $10,000 + $7,500) = $4,000.

revenue = $21,500

to determine profit when 1000 units are sold, we have to determine the price and average variable cost

Price = revenue / total unit sold = $21,500 / 500 = $43

Average variable cost = $7,500 / 500 = $15

For 1000 units sold

revenue = price x units sold = 1000 x $43 = $43,000

total variable cost = $15 x 1000 = $15,000

total cost = $15,000 + $10,000 = $25,000

Profit = $43,000 - $25,000 = $18,000

6 0

3 years ago

Lloyd Inc. has sales of $600,000, a net income of $60,000, and the following balance sheet: Cash $145,800 Accounts payable $192,

pogonyaev

Answer:

The new quick ratio is 4.6

Explanation:

Current ratio = Current assets / Current liabilities

2 = (Cash + receivables + inventories) / (Accounts payable + other current liabilities

2 = ($145,800 + $230,040 + inventories ) / $192,780

2 = $375,840 + inventories / $192,780

$385,560 = $375,840 + inventories

Inventories = $385,560 - $375,840

Inventories = $9,720

This means that inventories worth of $881,280 [ $891,000 -$9,720] were sold.

Also, if the funds so gained are used to reduce common equity, meaning buying back the equity at book value, hence common equity is $166,860 [ $1,048,140 - $881,280]

ROE before selling off the inventory = Net income / Stockholder's equity

= $60,000 / $1,048,140

= 0.057 or 5.7%

ROE after selling off the inventory = Net income / Stockholder's equity

= $60,000 / $166,860

= 0.40 or 40%

The firm's new quick ratio

= [ Current assets - inventories] / Current liabilities

= [$1,266,840 - $9,720] / $270,540

= $1,257,140 / $270,540

= 4.6

4 0

3 years ago

1. Given the nominal interest rate of 17​% and the expected inflation of 13​%, then the value of the real interest rate is ___ ?

1. Given the nominal interest rate of 17% and the expected inflation of 13%, then the value of the real interest rate is ___ ?