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frozen [14]
3 years ago
7

Suppose the nominal annual interest rate on a two-year loan is 8 percent and lenders expect inflation to be 5 percent in each of

the two years. The annual real rate of interest is:______.
A. 6 percent.
B. 8 percent
C. 2 percent.
D. 3 percent.
Business
1 answer:
Kisachek [45]3 years ago
5 0

Answer:

C. 2 percent.

Explanation:

The computation of the annual real rate of interest is presented below:

Provided that

Nominal annual interest rate = 8%

Inflation rate = 5%

So, the annual real rate of interest is

Real rate of return = {( 1 + nominal annual rate of return) ÷ ( 1 + inflation rate)} - 1

= {( 1 + 0.08) ÷ ( 1 + 0.05)} - 1

= 2%

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You have been asked to help King Company make the necessary journal entry to record the purchase of office furniture for a $170
Marina CMI [18]

Answer:

Debit Office Furniture account    $710

Credit Cash account                    $170

Credit Accounts payable             $710

Being entries to recognize office furniture partly paid for.

Explanation:

When items are purchased using cash, the corresponding credits in such transactions are recorded in the cash account. Where the item is purchased on account (or credit), the credit is posted to accounts payable.

Total worth of the office furniture = $170 + $540 = $710

The total debit for this will be recorded in the office furniture account.

Hence to recognize the transaction,

Debit Office Furniture account    $710

Credit Cash account                    $170

Credit Accounts payable             $710

Being entries to recognize office furniture partly paid for.

3 0
3 years ago
QUESTION 02<br> What is the meaning of the following words:<br> 2.1.1 Shackled.(1)
bekas [8.4K]

Answer:

chained to : restrained

Explanation:

8 0
3 years ago
Suppose that widgets are produced by a monopolistically competitive industry. If each firm in this market has the same cost stru
natulia [17]

Answer:

The equilibrium number of firms is 20.

Explanation:

Q = SH × b

   = 2,400 × (1/20)

   = 2,400 × 0.05

   = 120

Also given, Q = S / n

                120 = 2,400 / n

                  n = 20

3 0
3 years ago
Consider an 8.5% loan amortizing at a 25-year rate with monthly payments. What is the maximum amount that can be loaned on a pro
Leto [7]

Answer:

<u>Maximum Amount that can be loanded = $4139619</u>

Explanation:

DSCR = NOI / Debt Service

Debt Service = Principal + Interest

NOI = $ 500000

Debt Service = 500000 / 125 % = $ 400,000

The loan would be ammortized monthly over a period of 25 years.

Monthly Payment or EMI

E = P×r×(1 + r)n/ ((1 + r)n - 1)

12E = 400,000 = [P×r×(1 + r)n/ ((1 + r)n - 1)] * 12

or, P = 400000 / 0.0966272500154557 = $4139619

<u>Maximum Amount that can be loanded = $4139619</u>

8 0
3 years ago
Violations of security policies are considered to be a(n) __________ issue upon which proper disciplinary actions must be taken.
kari74 [83]

<u>Answer: </u>

Violations of security policies are considered to be a law enforcement issue upon which proper disciplinary actions must be taken.

<u>Explanation: </u>

  • The security policies put into place by the organization actually serve as the first wall of protection for the organization.
  • The organization makes it clear through its security policies what actions would be deemed as an attempt to breach the security and what actions are prohibited within and outside the premises of the organization as an employee of the organization:
4 0
3 years ago
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