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3 years ago

A decrease in the interest rate results in:______.

Business

1 answer:

rjkz [21]3 years ago

6 0

Answer:

3. a smaller opportunity cost of investment and so planned investment spending increases.

Explanation:

Opportunity cost is defined as the foregone alternative when a person undertakes an activity. For example going to work is the opportunity cost of staying at home to rest.

Opportunity cost is weighed against activity to be undertaken.

In this instance the opportunity cost of investment is the alternative foregone by investors.

As interest rate decreases it makes investment attractive because the cost of doing business decreases. This make other alternatives less attractive (smaller opportunity cost).

Investment now increases.

The monetary regulation agencies use interest rate a tool to either boost or reduce investment. The higher the interest rate th lower investment, and vice versa

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Welch Corporation is planning an investment with the following characteristics (Ignore income taxes.): Useful life 12years Yearl

Vlada [557]

Answer:

$339,600

Explanation:

The internal rate of return is the relationship between the price of the equipment and their yearly cash flow. the IRR makes the net present value equal to zero thus, it makes the present value of the yearly cashflow equal to the cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 60,000.00

time 12

rate 0.14

$60000 \times \frac{1-(1+0.14)^{-12} }{0.14} = PV\\$

PV $339,617.5275

From the given option:

$ 339,600 is the closest option.

7 0

3 years ago

Give an example of two economic goals conflicting with each other

Alexxandr [17]

Any country around the world has certain targets for becoming an ideal and economically stable nation. Economic goals of full employment, stability, economic growth, efficiency, and equity are widely considered to e beneficial and worth pursuing for a country to achieve economic stability. Full employment and price stability are goals that conflict with each other. Full employment is an economic situation in which all the available labor resource is being used in the most efficient way possible while price stability implies avoiding both prolonged inflation and deflation.

4 0

3 years ago

Read 2 more answers

Dr. G, the principal at Westside High School Academy, is worried that the students who win academic awards might also be more li

rosijanka [135]

No, Dr G has nothing to worry about because only 8 students won the academic as well as fine arts award out of 128 academic award winners. This corresponds to very low percentage of joint winners out of just academic award winners (0.0625%)

Explanation:

Total students in the Westside High School- 768

Winner of academic awards- 128

Winner of fine arts awards- 48

Students who won both awards- 8

Dr G pre assumption= Dr G was worried that winner of academic awards would win fine awards more likely.

But it seems that his assumtions are wrong since only 8 students out of 128 students won joint awards (meaning only 8 students won awards for fine arts as well as academic awards). Similarly, this corresponds to only 0.0625% of students winning academic awards as well as Fine arts awards.

8 0

3 years ago

Horner Construction Co. uses the percentage-of-completion method. In 2014, Horner began work on a contract for $16,500,000; it w

Leno4ka [110]

Answer:

2014 = zero

2015 = $6,450

Explanation:

2014

Under the completed-contract method of accounting, revenue, expenses, and gross profit is deferred until the completion of the contract. If at the end of the business fiscal year of a company work on a contract remains incomplete, no revenue, expenses, and profit on that contract is recognized in the current year on the income statement; all costs and billings are accumulated in respective balance sheet accounts.

2015

This year, the construction is completed so Horner Construction Co. will now recognize its Revenue and gross profit in relation to the project.

Contract price $16,500,000

Less: constructions costs 10,050,000

Gross profit $6,450,000

* construction cost = ($5,850,000 + $4,200,000)

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3 years ago

The multiplier effect of changes in government transfers is: greater than the multiplier effect of a change in government spendi

sergiy2304 [10]

Answer: less than the multiplier effect of a change in government spending.

Explanation:

The multiplier effect of government transfers refers to the measure by which the aggregate demand will increase by as a result of government transfers increasing.

This multiplier is less than the multiplier effect of a change in government spending. This is because government spending affects more people in the economy as it targets both companies and consumers. Government transfers on the other hand, target only welfare and unemployment payments amongst others so it cannot have the same effect as government spending.

5 0

3 years ago