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Kamila [148]
3 years ago
12

Which one of the following is NOT likely to be a result of deflation? Question 1 options: Menu costs will increase People will b

e more likely to postpone major purchases Wealth will be redistributed from creditors to debtors Uncertainty will increase People on fixed pensions will see the value of their pensions increase
Business
1 answer:
suter [353]3 years ago
8 0

Answer:

Wealth will be redistributed from creditors to debtors

Explanation:

Deflation refers to the general fall in the price level of goods and services when rate of inflation becomes lesser than 0%.

Due to the fall in the price level, goods and services become cheaper, credit providers reduce the quantum of credit provided.

Fall in the prices leads to lower expenditure by the purchasers owing to lower level of confidence and such buyers delay their purchases.

Deflation increases the purchasing power of consumers since at the same level of income, buyers can now buy more compared to previously.

Hence, those who earn fixed pension observe an increase in the value of such pension.

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3. Management activities include all of the following except:
7nadin3 [17]

Answer:

A

Explanation:

Management activities include Decision making

6 0
3 years ago
Melinda, who works in a jewelry store owned by Cindy, was picking up some gem stones for use in the store. On the way back to th
baherus [9]
Yes she should be held liable
6 0
3 years ago
A 30-year maturity bond making annual coupon payments with a coupon rate of 8.5% has duration of 12.88 years and convexity of 23
marin [14]

Answer:

a. Predicted Price = $1815.52

b. Predicted Price = $1,834.64

c. Predicted Price = $1425.4

Explanation:

The actual price of the bond as a function of yield to maturity is:

Yield to maturity --- Price

7% $1,620.45

8% $1,450.31

9% $1,308.21

a.

Using the Duration Rule, assuming yield to maturity falls to 6%:

Predicted price change = (-D/(1 + y)) * ∆y * Po

Where D = Duration = 12.88 years

y = YTM = 7%

∆y = 6% - 7% = -1%

Po = $1,620.45

So, Predicted Change = (-12.88/(1 + 0.07)) * -0.01 * 1,620.45

Predicted Change = 195.0597757009345

Predicted Change = $195.06 ----- Approximated

Therefore the new Predicted Price

= $1,620.46 + $195.06

= $1815.52

b.

Using Duration-with-Convexity Rule, assuming yield to maturity falls to 6%

Predicted price change

= [(-12.88/(1 + 0.07)) * (-0.01) + (½ * 235.95 * (-0.01²))] * 1,620.45

= 214.1770345759345

= $214.18 ------ Approximated

Therefore the new Predicted Price

= $1,620.46 + $214.18

= $1,834.64

c.

Using the Duration Rule, assuming yield to maturity rise to 8%:

Predicted price change = (-D/(1 + y)) * ∆y * Po

Where D = Duration = 12.88 years

y = YTM = 7%

∆y = 8% - 7% = 1%

Po = $1,620.45

So, Predicted Change = (-12.88/(1 + 0.07)) * 0.01 * 1,620.45

Predicted Change = -195.0597757009345

Predicted Change = -$195.06 ----- Approximated

Therefore the new Predicted Price

= $1,620.46 - $195.06

= $1425.4

4 0
3 years ago
It costs Bonita Industries $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A f
Serga [27]

Answer:

There will be an increase of $6,200 , If the special order is accepted

Explanation:

For computing the net income effect first we have to find out the net income per scale which is a difference between offer purchase price and variable cost per unit

In mathematically,

Net income = Offer purchase price - variable cost per unit

where,

Offer purchase price is $35

And, the variable cost is $12 per unit plus it incur special shipping charges which is also a part of the variable cost.

So, total variable cost = variable cost per unit + Special shipping charges per scale

=  $12 + $1

= $13

So, Net income is

= $15 - $13

= $2 per unit

Now for producing the 3100 scales, the net income should be multiply with the production unit

= Net income × Production unit

= 3,100 × 2

= $6,200

Fixed cost is fixed whether the production level changes or not. Thus, it is not be considered.

Hence, there will be an increase of $6,200 , If the special order is accepted

6 0
3 years ago
Abercombie Inc. will invest in a project. The project will give the company $10,000 on January 1, 2014, $23,000 on May 8, 2014,
Gala2k [10]

Answer:

$136,539.57

Explanation:

The present value of the project can be determined by using the cfj function of a Financial calculator as follows :

$0 CF0

$10,000 CF 1

$23,000 CF2

$33,000 CF3

$42,000 CF4

$55,000 CF5

I/YR = 5 %

Then SHIFT NPV gives $136,539.57

therefore,

the present value of the project is $136,539.57

5 0
2 years ago
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