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olasank [31]
4 years ago
13

If a friend who’d never heard of amortization before asked you to explain how loan payments work, what would you say?

Business
1 answer:
Ahat [919]4 years ago
4 0

Answer:

Spreading a loan into a series of fixed payments.

Explanation:

When you ask how loan payments work, there's no better way to explain it that knowing that you will have to pay down a balance over a period of time. When you ask for a loan, you will have to spread it into a series of fixed payments (the total payment remains equal all the time) in which you will have to cover for the principal loan (the amount of money you requested) and the loan's interest (which is what the lender gets paid for the loan). This monthly payment even though it remains the same, covers for the following: the interest costs (which are at their highest at the beginning) and reducing the loan balance. As time goes on, a bigger portion of what you are paying goes toward the principal loan, and the interest you pay is proportionally less each month.

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A foreign currency ___________ is a contract giving the purchaser (the buyer) the right, but not the obligation, to buy or sell
Vera_Pavlovna [14]

Answer:

The correct answer is: Option; premium or option price.

Explanation:

As the name implies, an option refers to the right that is given to a potential buyer of capital goods to exercise currency trading within a specified time and amount. To carry out this process, an in-depth study must be carried out in order to make the best investment decision, for the benefit of both parties.

For its part, the price of the premium or option refers to the amount paid by the buyer in order to exercise the legitimate right over the capital asset. The premium corresponds to the value paid in excess and that represents a higher value for the seller within market estimates.

5 0
3 years ago
Bud’s Bucket ice cream company produces a chemically enriched ice cream and decides to penetrate the gourmet market by offering
ipn [44]

Answer:

It may turn off it's current customer base and cause them to purchase a competitors ice cream.

Explanation:

Market penetration strategy is the process of selling current products to an already existing market so as to obtain a higher market share by taking the market shares from the other competing companies.

Market penetration strategy uses low prices to generate demand for a product and increase market share. Bud's bucket ice cream decides to penetrate the gourmet market by offering its same ice cream at high prices instead of reducing the price, this might lead to a reduction in their current customer base.

6 0
3 years ago
Define the following terms: a. Cost of debt b. Cost of equity c. After-tax WACC d. Equity beta e. Asset beta f. Pure-play compar
gtnhenbr [62]

Answer: The answers are explained below.

Explanation:

• Cost of debt: The cost of debt is the interest rate that a company is charged on its debts. It is the interest paid on bonds, loans etc. The cost of debt is usually the before-tax cost of a debt.

• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.

• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.

• Equity Beta: It measures the sensitivity of the stock price to changes in market. Equity Beta is also called levered beta.

• Asset beta: It is the beta of a firm without the effect of debt. It is a company's volatility of returns without its indebtedness.

• Pure play comparable: The pure play comparable is the taking of the beta estimate of another company that is comparable and in same line of business.

• Certainty equivalent: It is the guaranteed return that an individual would take now, rather than awaiting a higher but uncertain return later in the future.

3 0
3 years ago
Read 2 more answers
A cell phone provider charges felicia $50 per month for her plan plus $0.05 per min of long distance calls.if felicia wants to k
Sunny_sXe [5.5K]
$0.05m + $50>55

0.05 per minute plus $50 per month for the plan less than $55
7 0
3 years ago
In order to prepare a contribution format income statement, costs must be separated into: Multiple Choice
scoray [572]

Answer:

variable and fixed costs.

Explanation:

The format of the contribution margin income statement is presented below:

Sales                                    XXXXX

Less: Variable cost            (XXXXX)

Contribution margin            XXXXX

Less: Fixed cost                  (XXXXX)

Net income or loss               XXXXX

Based on this we can concluded that the contribution margin income statement  classified into two cost i.e variable and fixed cost

4 0
3 years ago
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