Answer:
C) a higher real interest rate reduces a borrowing firm's profit and hence its willingness to borrow.
Explanation:
Companies borrow money to leverage their projects, investments or regular business activities. When they borrow money, they do it to earn more money themselves, not just to make a bank or a bondholder earn money. Since the company must repay its loans, the profit it makes using the loans must offset the money it must pay back in interest.
E.g. I borrow $100 for my business and the bank charges me $7 in interest per year, so I must be able to use that money to increase my profit by more than $7 a year.
Answer:
The financial advantage of buying 72,000 units from the supplier instead of making those units is that Cane would not its traceable fixed manufacturing overhead.
If we assume that Cane's fixed costs are made up of traceable fixed manufacturing overhead of 60% or $60,000 and 40% of common fixed expenses or $40,000, then $60,000 would not be incurred by Cane in the period it decides to buy from the supplier.
Explanation:
Traceable fixed manufacturing overheads are the expenses that can be traced to production units. We can say that they are variable with production units or that production gives rise to them. This implies that when there is production, such costs are incurred, whereas, they are not when there is no production. They arise due to usage. For example, more utility energy is consumed based on production.
The common fixed expenses are allocated costs, including administrative expenses, for example. By their nature, they are generally unavoidable whether Cane decides to produce or buy from the supplier. And since they must be incurred and allocated, they are not relevant in making a buy or make decision.
Answer:
8.33333333333333
[( Current value - Original value ) / Original value ] * 100
I think the answer is D) Sales promises