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2 years ago

Why do many economists believe that the best time to start a new business is toward the end of a recession?

1 answer:

3 0

A recession is a time in an economy whereby trade and industrial activities is low.Economists believe that towards the end of this period is the best to start a business due to the following reasons: at this time things are more affordable as there is low circulation of money in the economy. Low-interest rates on loans thus credit is cheaper. Additionally, there will be less competition as the money is in the hands of few people during this time. Finally, many people want to save money and thus clients will be on the lookout for more affordable alternatives.

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Suppose you enter into a 9-month long forward contract on a non-dividend-paying stock when the stock price is S0 = $125 and the

Vladimir79 [104]

Answer:

Future Price

F0: 126.89

F3: 113.13

F4: 113.41

Value of the contract:

a) zero (by definition)

b) -13

c) -13

Explanation:

forward price:

$F = S (1+r)^{n}$

being S the spot rate

time 9 months and

rate 2% continuous componding

As the rate is continuous we calculate using the e number instead:

$F = S e^{rn} +cost$

$F = 125 e^{0.02 \times 9/12}$

F = 125 x 1.015113065

F = 126.8891331 = 126.89

3th month into the contract:

$F = 112 e^{0.02 \times 6/12}$

F = 113.1256187 = 113.13

4th month

$F = 112 e^{0.025 \times 5/12}$

F = 113.4087866 = 113.41

value of the contract

at third month:

Vt = St - F0

Vt = 112 - 125 = -13

at fourth month

Vt = 112 - 125 = -13

3 0

3 years ago

If the salaries of the sales staff of a manufacturing company are improperly recorded as a product cost, what will be the likely

Fynjy0 [20]

Answer:

Net Income will be overstated

Explanation:

The journal entry for salaries payable is

Salaries Expense Dr.

To Cash A/C

(Being salaries paid recorded)

Salaries expense is charged to net income and the journal entry is

Net Income Dr.

To Salaries Payable

Salaries expense reduces net income as it being a deductible expenditure for a corporate.

In the given case, salary expense has been accounted as a product cost. This would reduce the expenses and thus would overstate the net income.

5 0

3 years ago

At December 31, 2017, Twin Rivers Company had 450,000 shares of common stock issued and outstanding, 350,000 of which had been i

Feliz [49]

Answer:

3.033

Explanation:

Outstanding shares 350,000

Shares of common stock issued 450,000

Net income $1,160,000

Hence;

$350,000 X 8/12 = $233,333

$450,000 X 4/12 = $150,000

$233,333+150,000=$383,333

$1,160,000/ $383,333 = 3.033

Twin Rivers' 2017 earnings per common share, rounded to the nearest penny is 3.033

8 0

2 years ago

Read 2 more answers

The fractional reserve system of banking started when goldsmiths began: Select one: a. Accepting deposits of gold for safe stora

Phoenix [80]

Answer:

d. Issuing paper receipts in excess of the amount of gold held.

Explanation:

Fractional-reserve banking is practiced by all commercial banks. Such banks involve banks that accept deposits from various customers and make loans to other borrowers while keeping an amount in reserve that is equal to a part of the deposit liabilities of the bank.

The fractional reserve system of banking started when goldsmiths began issuing paper receipts in excess of the amount of gold held.

Option d. is correct.

6 0

2 years ago

In 2006, Ford Motor Company announced it would severely cut back its automobile production. For parts companies supplying Ford i

Molodets [167]

Based on the effect this would have on the companies supplying Ford, this is a Threat.

<h3>What is a Threat?</h3>

It is one of the factors involved in a SWOT Analysis.
It describes things that may threaten the profitability of a company.

If Ford cuts back production, those supplying it would have to supply less which would hurt profits. This is therefore a threat.

Find out more on the SWOT Analysis at brainly.com/question/1438685.

3 0

2 years ago