Solution :
Given :
The bonds offer a
of 4.5% per year
Tax rate = 10% = 0.10
Inflation rate = 2
=
+ ![\text{inflation rate}](https://tex.z-dn.net/?f=%5Ctext%7Binflation%20rate%7D)
= 2 + 4.5
= 6.5
=
![$\times (1-\text{tax rate})$](https://tex.z-dn.net/?f=%24%5Ctimes%20%281-%5Ctext%7Btax%20rate%7D%29%24)
= ![$6.5 \times (1-0.10)$](https://tex.z-dn.net/?f=%246.5%20%5Ctimes%20%281-0.10%29%24)
![$=6.5 \times 0.90$](https://tex.z-dn.net/?f=%24%3D6.5%20%5Ctimes%200.90%24)
= 5.85
After tax real interest rate =
- ![\text{inflation rate}](https://tex.z-dn.net/?f=%5Ctext%7Binflation%20rate%7D)
= 5.85 - 2.0
= 3.85
= 7.0
![\text{Real interest rate = 4.5}](https://tex.z-dn.net/?f=%5Ctext%7BReal%20interest%20rate%20%3D%204.5%7D)
=
+ ![\text{inflation rate}](https://tex.z-dn.net/?f=%5Ctext%7Binflation%20rate%7D)
= 7 + 4.5
= 11.5
=
![$\times (1-\text{tax rate })$](https://tex.z-dn.net/?f=%24%5Ctimes%20%281-%5Ctext%7Btax%20rate%20%7D%29%24)
![$=11.5 \times (1 - 0.10)$](https://tex.z-dn.net/?f=%24%3D11.5%20%5Ctimes%20%281%20-%200.10%29%24)
![$=11.5 \times 0.90$](https://tex.z-dn.net/?f=%24%3D11.5%20%5Ctimes%200.90%24)
= 10.35
= 11.5 x (1 - 0.10)
= 11.5 x 0.90
= 10.35
=
- ![\text{inflation rate}](https://tex.z-dn.net/?f=%5Ctext%7Binflation%20rate%7D)
= 10.35 - 7.0
= 3.35
Putting all the value in table :
Real interest Nominal interest After tax nominal After tax
rate rate interest rate interest rate
2.0 4.5 6.5 5.85 3.85
7.0 4.5 11.5 10.35 3.35
Comparing with the
, a
will increase the after after tax real interest rate when the government taxes nominal interest income. This tends to encourage saving, thereby increase the quantity of investment in the economy and the increase the economy's long-run growth rate.
The answer is: Social networks and related tools
Social media and other related tools allow the companies to provide information regarding their products to a wide variety of consumers segmentation with relatively cheaper price. Due to the low barrier of entry, small businesses often find easier success in marketing through these mediums rather than using traditional media.
Answer:
The correct answer is letter "D": direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department.
Explanation:
Standard price is the estimated price direct materials could have at the moment of ordering a purchase. Standard quantity refers to the forecasted number of units necessary for the production process of the firm. The two of them are separated to allocate each one to the department in charge of their providing accurate measures: <em>standard prices are set by the purchasing department while the standard quantity is estimated by the production department.
</em>
The efficiency of standard price and quantity relies on the purchasing and production departments separately.
Answer:
sry I just wanted the points I'm in middle school so I don't know this stuff either but can you give free brainlyest I'm soo close to my next rank I'd really appreciate it if you would
Answer:
sales is $2,500,000
Explanation:
The target sales for the company to achieve a net income of $450,000 in the current year equals the net income plus variable cost plus the fixed costs.
To understand this better,let us use the net income formula:
net income=sales-variable costs-fixed costs
by changing the subject of the formula,we the formula for sales:
sales=net income+variable costs+fixed costs
variable costs=sales*70%=0.7 sales
sales=$450,000+$300,000+0.7 sales
sales-0.7 sales=$750,000
0.3 sales=$750,000
sales=$750,000/0.3=$2,500,000