All categories

3 years ago

Someone with dollar bills to lend will never agree to make a loan with a nominal interest rate of less than zero because:

1 answer:

7 0

<span>Having a nominal interest rate less than 0 would mean that a depositor pays a bank to hold its money. If the annual nominal interest rate is negative 1 percent, a deposit of $1000 dollar would come out $10 dollar short the following year which is why someone with dollar bills will never agree to loan with a nominal interest rate that is negative percent.

</span>

You might be interested in

Situations where an individual is required to define right and wrong conduct are termed ________.

koban [17]

Answer:

The right option is option b, which is Ethical dilemmas

Explanation:

Ethical dilemmas are situations in which there is a choice to be made between two options neither of which resolved the situation. It is a decision making problem which is between two possible moral imperatives.

8 0

3 years ago

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of co

Scilla [17]

Answer:

Option (d) 7 times

Explanation:

Data provided in the question:

Net income = $250,000

Dividends paid to common stockholders = $50,000

Common stock outstanding = 50,000

Selling price of the common stocks = $35

Now,

The price-earnings ratio is calculated as:

⇒ ( Stock price ) ÷ ( Earnings per share )

also,

Earnings per share = ( Net income ) ÷ ( common stock outstanding )

= $250,000 ÷ 50,000

= $5

Price-earnings ratio = $35 ÷ $5

Price-earnings ratio = 7 times

Option (d) 7 times

4 0

3 years ago

A homeowner has a mortgage balance of $149,570.75. If the interest rate on the loan is 9.5% and the monthly payment is $1,303.55

nalin [4]

Answer:

Principal balance at the end of year 2 = 149,330.9079

Explanation:

Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.

We will use the following relationships:

Interest paid = Interest rate × loan balance

Principal paid = Monthly installment - Interest paid

Principal balance= loan balance - principal paid

Year 1

Interest paid = 9.5%/12 × 149,570.75 = 1,184.101

Principal paid in year 1 = 1,303.55 - 1,184.101 = 119.448

Principal balance = 149,570.75 - 119.448= 149,451.3018

Year 2

Interest paid = interest rate × loan balance in year 1 = 1183.156

Interest paid = 9.5%/12 × 149,451.3018 = 1183.156

Principal paid = 1,303.55 - 1183.156139 = 120.393

Principal balance at the end of year 2= Principal balance in year 1 - Principal paid in year 2

= 149,451.3018 - 120.393861 = 149330.9079

Principal balance at the end of year 2 = 149,330.90

8 0

3 years ago

When looking for capital, bankers and other lenders will usually feel most comfortable investing in a/an

lilavasa [31]

Existing business with a proven record. When you ask for investments, the lending institution will most definitely ask for your financial track record. They would want to know if you are a good paymaster because they will need the assurance that you can pay them back. Even if you have a really original idea and want to start a new business, there will still be some reservation if you have no track record because the lenders do not know if you are trustworthy or not. Unlike if you already have a proven record that you are a good paymaster, then you at least have proof that you can pay back.

7 0

2 years ago

24. ABC Corp. has a deferred tax asset account with a balance of $75,000 at the end of 2019 due to a single cumulative temporary

nevsk [136]

Answer:

The journal entries to prepare would be as follows:

Debit Credit

Deferred tax asset $5,000

Income tax expense $159,000

Income tax payable $164,000

Debit Credit

Income tax expense $25,000

Valuation Adjustement $25,000

Explanation:

The journal entries to prepare would be as follows:

Debit Credit

Deferred tax asset $5,000

Income tax expense $159,000

Income tax payable $164,000

Deferred tax asset=($400,000*20%)-$75,000

Deferred tax asset=$5,000

Income tax payable=$820,000*20%=$164,000

Income tax expense=$164,000-$5,000=$159,000

Debit Credit

Income tax expense $25,000

Valuation Adjustement $25,000

5 0

3 years ago