Answer:
D .the long-term spot rate is an average of the current and expected future short-term interest rates
Explanation:
Unbiased Expectations Theory -
According to this theory , it forecasts the short - term rate of interests of the future according to the current long - term rate of interests .
Which states that the investor gets the same interest amount during two consecutive one - year bond against investing in one two - year bond .
Hence , from the given statements , the correct statement regarding the unbiased expectations theory , is ( D. ) .
Answer:
On self-constructed assets from the date an entity formally adopts a plan to build a discrete project.
Explanation:
Capitalized interest is an accounting practice required under the accrual basis of accounting. Capitalized interest is an interest that is added to the total cost of a long-term asset or loan balance. This makes it so the interest is not recognized in the current period as an interest expense.
Capitalization is the addition of unpaid interest to the principal balance of your loan. The principal balance of a loan increases when payments are postponed during periods of deferment or forbearance and unpaid interest is capitalized.
Answer:
The old machine should be retained.
Explanation:
The old machine should be retained.
The differential analisys shows <u>cost will increase 322,100 if replaced.</u>
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The sale from the old machine is an income for the relacement alternative.
the cost of the new machine is an expense
the value of the 7 years of manufacturing cost show a cost saving for 58,100
this savings, along with the proceeds from the old machine, doesn't cover the acquisition of the new machine. It is a bad investment.