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Mariulka [41]
4 years ago
11

Everyone uses money, and it is important to understand what factors affect the cost of money. Consider the following scenario: D

ue to recent political and economic events, general prices of goods and services are expected to increase significantly over the next five years. You were about to purchase a five-year bond. You now require a higher return on the bond than you did before you found out about these expected price increases. Determine which of these fundamental factors is affecting the cost of money in the scenario described
Business
1 answer:
ryzh [129]4 years ago
8 0

Answer:

Following are the factors in the economy that affects the cost of money:

  1. Inflation
  2. Required return of the investors on the additional risk
  3. Systematic risk in the economy
  4. Duration of lending
  5. Credit Spread

Explanation:

If the inflation rate increases then the required return would be compensation for inflation and required return.

The higher is the risk associated with the investment the higher would be the investor's required return.

According to the Capital Asset Pricing Model, the company compensates the investor for the systematic risk, not for the unsystematic risk that he faces because CAPM assumes that the investor has diversified portfolio of investment.

If the amount lend is for greater duration, then there is a risk that the borrower will default payments. There is another explanation which is that there is higher chances of loss of opportunity due to lending amount for greater duration.

Credit Spread is the measure of the risk that the company will be unable to pay interest on loan or principal amount or both. So as we know higher the risk associated with the investment, the higher is the Required return demanded by the investors.

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A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension
Margaret [11]

Answer:

Hello your question lacks the required spreadsheet  attached below is a  spreadsheet and the completely filled spreadsheet

Explanation:

Amortization = 140,000 / 20 = 7000

average service life = 20

<em>The missing amounts are </em>

service cost = $104

gain on PBO = $28

prior service cost = $0

expected return on plant assets = $ 46.40

loss on assets = $16

cash funding = $88

retirees benefits = $50

prior service cost = $14

interest cost = $42

4 0
3 years ago
These items are taken from the financial statements of Windsor, Inc. at December 31, 2017.
nordsb [41]

Answer:

To make balance sheet we first have to calculate net income/net profit for the year.

<em><u>Net profit Calculation</u></em>

Service revenue            $ 13,524

Insurance expense        ($     718 )

Depreciation expense   ($ 4,876)

Interest expense           ($ 2,392)

Profit                              $ 5,538

<em><u></u></em>

Balance Sheet

Asset

Non-Current Asset

Land                                                            $56,304                                                            

Buildings                                                     $97,336

Accumulated depreciation—buildings      ($41,952)

Equipment                                                   $75,808

Accumulated depreciation—equipment   ($17,222)

Total non Current Asset                            $170,274

Current Asset

Cash                                                              $10,893

Accounts receivable                                    $11,592

Prepaid insurance                                         $2,944

Current Asset                                               $25,429

Total Asset                                                   $195,703

Equity

Common stock                                              $55,200

Retain Earning (36,801+5,538)                     $42,339

Total Equity                                                   $97,539

Liability

Non-Current Liability

Current Liability

Accounts payable                                           $8,740

Notes payable                                                $86,112

Interest payable                                               $3,312

Total Current Liability                                  $98,164

Total Liability + Equity                                $195,703

5 0
3 years ago
Because of the unlimited liability of all partners, a general partnership most
SVEN [57.7K]

The correct answer is B, sole proprietorship.

A general partnerships is very similar to a proprietorship. One of the biggest detractors from both a partnership and a proprietorship is that the owners are personally responsible for the debts of the company.

5 0
3 years ago
Read 2 more answers
Antonio and Dina are debating the use of student discounts by local theaters near school. Antonio argues, "When theaters offer d
Ivanshal [37]

Answer:

The correct answer is letter "A": Dina.

Explanation:

The fact that local theaters near school offer a discount to students with valid identification is not a form of discrimination. As stated by Dina, there is no age restriction, for instance, and it is presumed, there is no other such religious preference, sexual orientation, race, and so forth. Economists are more likely to agree with Dina since what the local theaters are simply trying to do is to get the more clientele possible out of diverse sources. In this case, the source is the student status.

7 0
4 years ago
True or false?
yaroslaw [1]

Answer:

A. True

B. False

C. False

D. True

Explanation:

A.<em> Brands do a great job creating the meaning associated with a symbol or tagline</em>. True.

Just like humans have names and personalities, so do brands. The symbols of brands are just like human names. The personality of the brand goes a long way in determining the meaning people attribute to that symbol

<em>B. What a brand represents is very consistent across everybody.</em> False.

Just as societies have different cultures, so do the meanings they attribute to a brand differ. For example,some cultures feel the color red is associated with ill luck. This will affect how they see such brands which have the red color.

<em>C. A brand's meaning is controlled by the brand. </em> False.

On a holistic note, a brand can control only a certain aspect of its meaning. the other aspect is left to individualism and culture.

<em> D. A brand's meaning is up to potential and actual customers.</em> True.

This is because the customers and kings and they have their personal views  about life. This view often affects how they see brands.

8 0
3 years ago
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