1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anarel [89]
3 years ago
12

For various reasons related to trying to prevent a catastrophic recession during the pandemic, the federal government has and wi

ll continue to borrow trillions of dollars. Fortunately, they can borrow this money at a low interest rate. a) Assuming the government borrows $6 Trillion at a 0.5%, what is the required uniform annual payment to completely pay off this debt in 20 years
Business
1 answer:
Novosadov [1.4K]3 years ago
3 0

Answer:

$0.316 trillion per annum

Explanation

According to the scenario, computation of the given data are as follow:-

Interest rate = 0.5% = 0.005

Government Borrows = $6 trillion

Time = 20 years

Required Uniform Annual Payment= Government Borrows × Interest Rate × [(1 + Interest Rate)^Time period ÷ (1 + Interest Rate)Time period] - 1

= $6 trillion × 0.005 × [(1 + 0.005)^20 ÷ (1 + 0.005)^20 - 1]

= $0.03 trillion × [(1.005)^20 ÷ (1.005)^20 - 1]

= $0.03 trillion × (1.1049 ÷ 1.1049 - 1)

= $0.03 trillion × (1.1049 ÷ 0.1049)

= $0.03 trillion × 10.533

= $0.316 trillion per annum

You might be interested in
IMB Corporation recently reported an EBITDA of $22.5 million and $5.4 million of net income. The company has $6 million interest
Mandarinka [93]

Answer:

$8.2 million

Explanation:

As per given data

EBITDA         $22.5

Net Income    $5.4 Million

Interest Expense = $6 million

Tax rate = 35%

As we know the Tax is deducted from the income before tax to calculate the net income. We will calculate the Earning before tax first.

EBT = Net Income x 100% / ( 100% - 35% )

EBT = 5.4 million x 100% / 65%

EBT = $8.3 million

Now we need to calculate the Earning Before interest and Tax

EBIT = EBT + Tax Expense = $8.3 million + $6 million = $14.3 million

The Difference between EBIT and EBITDA is depreciation and amortization expense.

Depreciation and Amortization expense = EBITDA - EBIT = $22.5 million - $14.3 million = $8.2 million

3 0
2 years ago
Match each term below with its correct definition.a.a crasha major decrease in stock prices.b.bear marketa general upward trend
Viefleur [7K]
A crash is a major decrease in stock prices.

A bear market is a general downward trend in stock prices.

A bull market is a general upward trend in stock prices.
6 0
3 years ago
Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 4.50 p
vodomira [7]

Answer:

The right solution is "$78.55".

Explanation:

The given values are:

Material cost,

= $5 per pound

Average freight costs,

= $0.25 per pound

Downtime average,

= 0.40 hours per unit

According to the question,

The direct material cost per unit will be:

=  ((4.5+0.5)\times 5\times 0.98)+(0.25\times (4.5+0.5))

=  (5\times 5\times 0.98)+(0.25\times 5)

=  24.5+1.25

=  25.75 ($)

The direct labor will be:

=  ((2.0+0.4)\times 12)+(3\times (2.0+0.4))

=  28.8+7.2

=  36 ($)

Manufacturing overhead will be:

=  (2.0+0.4)\times 7

=  2.4\times 7

=  16.8 ($)

hence,

The standard cost per unit will be:

=  Direct \ material+Direct \ labor+Manufacturing \ overhead

=  25.75+36+16.8

=  78.55 ($)

7 0
3 years ago
Aluminum maker Alcoa has a beta of about 1.85​, whereas Hormel Foods has a beta of 0.39. If the expected excess return of the ma
Nady [450]

Answer and Explanation:

The computation is shown below:

As we know that

According to the Capital Asset Pricing Model (CAPM) formula

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

And, the market rate of return - Risk-free rate of return is also known as the market risk premium

As we can see that the Alcoa contains high beta as compared to Hormel Foods so the Alcoa has a higher equity cost of capital

And, the higher rate is

= (Excess return of the market) × (Alcoa beta - Hormel foods beta)

= (3%) × (1.85 - 0.39)

= 3% × 1.46

= 4.38%

8 0
3 years ago
Students have the right to express themselves through speech provided the speech is not obscene, vulgar, or disruptive.
mezya [45]
This statement is true
3 0
2 years ago
Read 2 more answers
Other questions:
  • Affluenza" is a condition where: select one:
    8·1 answer
  • Patagonia was one of the first companies to offer employees a child care program. plans such as child care, sick-leave pay, vaca
    15·1 answer
  • QS 5-12 Preparing a multi-step income statement LO P4 Save-the-Earth Co. reports the following income statement accounts for the
    9·1 answer
  • Kingbird, Inc. issues $250,000, 10-year, 6% bonds at 96. Prepare the journal entry to record the sale of these bonds on March 1,
    12·1 answer
  • Automated bidding does the heavy lifting for advertisers on Google Ads. What does automated bidding use to set the right bid for
    13·1 answer
  • Calculate the present values for the perpetuity: (1) Annual amount $20000, discount rate 8% (2) Annual amount $10000, discount r
    6·1 answer
  • Alexis is choosing between a job in the National Parks Service, which offers a pension plan, and a forestry contracting job with
    8·1 answer
  • Gato Inc. had the following inventory situations to consider at January 31, its year-end. Identify which of the following items
    8·1 answer
  • Researching and planning are important aspects of choosing a career because they
    10·2 answers
  • Difference between credit sales and credit card sales
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!