In economics, the Fisher equation is used to determine the
relationship of the nominal interest rate and the real interest rate. This
equation takes into account the effect of inflation. Mathematically this is
expressed as:
Real rate = 
-1
The values given are:
Nominal rate= 10% =
0.1
Inflation=5%=0.05
Substituting known
values and by calculation:
<span>Real rate=0.0476 =
4.76%</span>
Answer:
8. The opportunity cost is c. wearing the shoes
9. To gain the most satisfaction possible
10. A new toy is less exciting to a child with many toys
Explanation:
Answer:
$519,799.59
Explanation:
Discount rate = R = 14.50%
Year Cash flows Discount factor PV of cash flows
1 218,000.00 0.873362 190,393.0131
2 224,000.00 0.762762 170,858.6793
3 238,000.00 0.666168 <u>158,547.9011</u>
Total of PV = NPV = <u> $519,799.59</u>
<u />
Note:
Df = 1/(1+R)^Year
PV of cash flows = Cash flows x Df
Answer:
<u>Brainstorming.</u>
Explanation:
The situation exposed in the question above is an example of brainstorming, which can be defined as a group dynamics technique where there is the generation of ideas for a given project.
This activity is developed with the main objective of exploring the creative and innovative capacity of an individual or a group, stimulating the team's creativity, collecting ideas and the maximum amount of information, visions and possibilities in order to achieve a determined objective.
Answer:
The change in net working capital resulting from the addition of the microbrewery is $5,500 (decrease)
Explanation:
There are 3 key elements of working capital. These are;
- Inventory
- Accounts payable
- Accounts receivable
Given;
increase in inventory = $8,000
increase in Accounts payable = $2,500
Change in net working capital resulting from the addition of the microbrewery = -$8,000 + $2,500
= -$5,500
