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sasho [114]
3 years ago
5

Why would banks offer lower interest rates for loans?

Business
2 answers:
pickupchik [31]3 years ago
7 0
C) to encourage people to borrow money 
earnstyle [38]3 years ago
4 0

Answer:c

Explanation:

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A corporation makes an investment of $20,000 that will provide the following cash flows after the corresponding amounts of time:
s344n2d4d5 [400]

A) The company should not invest in the provided project due to the negative NPV of the project.

B) The NPV of the project comes out to be (286).

<h3>What is NPV?</h3>

NPV is an abbreviated form of Net present value and computed by deducting the cash outflows from cash inflows at the present value.

Given values:

Cash flow of year 1: $10,000

Cash flow of year 2: $10,000

Cash flow of year 3: $2,000

Cash outflow (cost of investment) =$20,000

Step-1 Computation of PV of cash inflows of every year:

PV of year 1 = Cash inflow of year 1 / (1+ interest rate)^ 1

                    = $10,000 / (1+0.07) ^ 1

                    = $10,000 X 0.934579

                    = $9,346

PV of year 2 = Cash inflow of year 1 / (1+ interest rate)^ 2

                    = $10,000 / (1+0.07) ^ 2

                    = $10,000 X 0.873438

                    = $8,735

PV of year 3= Cash inflow of year 1 / (1+ interest rate)^ 3

                   = $2,000 / (1+0.07) ^ 2

                    = $2,000 X 0.816297

                    =$1,633

Step-2 Computation of total amount of PV of cash inflows:

\rm\ PV \rm\ of \rm\ cash \rm\ inflows = \rm\ PV \rm\  of \rm\  year \rm\  1 + \rm\  PV \rm\ of \rm\ year \rm\ 2 + \rm\ PV \rm\ of \rm\ year \rm\ 3\\\rm\ PV \rm\ of \rm\ cash \rm\ inflows =\$9,346 + \$8,735 + \$1,633\\\rm\ PV \rm\ of \rm\ cash \rm\ inflows =\$19,714

Step-3 Computation of NPV:

\rm\ NPV=\rm\ PV \rm\ of \rm\ cash \rm\ inflows- \rm\ Cost \rm\ of \rm\ investment\\\rm\ NPV=\$19,714-\$20,000\\\rm\ NPV=\$ (286)

Therefore, the NPV comes out to be a negative amount of 286, and hence, the company should not accept the project.

Learn more about the net present value in the related link:

brainly.com/question/14015430

#SPJ1

5 0
2 years ago
Consider a town in which only two residents, Kevin and Maria, own wells that produce water safe for drinking. Kevin and Maria ca
jarptica [38.1K]

Answer:

Monopolist profit maximizing price

A: $3 per gallon , total output =270 Kelvins profit = $810(801/7/2 = $405

Maria's profit = $405

B. $2.5 per gallon . Kelvin's profit =$450 Maria's profit = 337.5

C = False. At the same quantity , fall in price brings fall in revenue

Cournot Nash equilibrium

Explanation:

In a monopolist market system , price are set higher than the marginal cost as the producer enjoy the dominance of the market through the production of a unique good.

At the price of $3 , change in demand =(270-225) =45 , change in revenue = ($810-$787.50)22.5 and marginal revenue = (45/22,5) = 0.5. That forms the maximizing price for a monopolist.

On the new arrangement , price drops to $2.5 , Maria's profit =(315-45/2)2.5 = $337.5 and Kelvin's = ($787.5-337.5) = $450

Cournot Nash equilibrium is business model that explains the competition among rival companies producing similar product on the level of output produced independently.

6 0
3 years ago
Camille's Café is considering a project that will not produce any sales but will decrease cash expenses by $12,000. If the proje
Nadya [2.5K]

Answer:

Answer is $10,500.

Refer below.

Explanation:

Camille's Café is considering a project that will not produce any sales but will decrease cash expenses by $12,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. The amount of the operating cash flow using the top-down approach is:

$10,500

3 0
3 years ago
When would you use a cashier's check ?
AleksAgata [21]
Is this an open ended question ? Or multiple choice ?
6 0
3 years ago
If you needed financial advice, whom would you ask? Why?
kap26 [50]

Answer: financial advisors

Explanation: A financial advisor can help you create a long-term investing strategy, weigh the pros and cons of different account types, pick mutual funds, rebalance your investing portfolio, and set savings benchmarks to help you reach your long-term goals.

Hope this helped

6 0
3 years ago
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