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Anarel [89]
4 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]4 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

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Answer:

<h2>The given statement is true.Hence, the answer would be option a) or true in the answer options</h2>

Explanation:

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4 0
3 years ago
​Sustainable businesses tend to be run by CEOs who are:
Marianna [84]
The answer is Target-driven<span>
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8 0
4 years ago
Bay Beach Industries wants to maintain their capital structure of 40% debt and 60% equity. The firm's tax rate is 34%. The firm
Gala2k [10]

Answer:

14.87%

Explanation:

The computation of the cost fo external equity is shown below:

Cost of external equity = {D1 ÷ P0 × (1 - f)} + g

where,

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D1 represents Dividend for next year which is

= D0 × (1 + g)

= $3.60 × (1 + 0.06)

= $3.816

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flotation cost =$3 per share

f =  % of flotation cost which is

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Now placing these values to the above formula

So,

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Answer:

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There is a difference between managing proactively and creatively.

Managing creatively only carried out after the company experience some sort of bad circumstances. IT is used to fix the situation.

Managing proactively on the other hand is carried out on a regular basis, even before any bad circumstances happen. This type of management will prevent the company in experiencing unnecessary damage and will be beneficial for the company in the.  long run, This will  minimize the risk that might occur to the company.

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