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mart [117]
3 years ago
9

Consider the following five situations. In which situation would a borrower be best off and in which situation would a lender be

best​ off? a. The nominal interest rate is 14 percent and the inflation rate is 17 percent. b. The nominal interest rate is 9 percent and the inflation rate is 5 percent. c. The nominal interest rate is 4 percent and the inflation rate is negative 2 percent. d. The real interest rate is 8 percent and the inflation rate is 3 percent. e. The real interest rate is 3 percent and the inflation rate is 9 percent. The borrower is best off in situation ▼ and the lender is best off in situation ▼ A B C D E .
Business
1 answer:
umka2103 [35]3 years ago
5 0

Answer:

The borrower is best off in situation <u>"a"</u> and the lender is best off in situation ▼  "C" .

Explanation:

Considering all the situations given in the options, the <u>borrower</u> is best in situation <u>a</u> and <u>lender</u> is best off in situation in <u>c</u>.

<u>Part a </u>

Real Interest rate = Nominal Interest rate - Inflation rate = 14 - 17 = -3 per cent. Thus, the purchasing power of money has fallen and the person has to pay back money with little purchasing power as compared to the value of the purchasing power at the time he borrowed money. Thus, borrowers are best off.Thus, <u>borrower</u> is best off when the inflation rate is very high.

<u>Part c</u>

Inflation rate is negative, thus the purchasing power of money will increase and lenders will get back money with higher purchasing power as compared to the value of the purchasing power of money at the time he lend the money. Thus, <u>lender </u>is best off when inflation rate is lowest.

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The birthday rule is used to determine the:
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9.11

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<h2>Hope this helps! (: STAY SAFE AND BLESSED </h2>
8 0
2 years ago
Our web development team is creating an e-commerce site for a new product. the marketing team's goal is to develop markets world
makkiz [27]
The answer to this question is t<span>o make the site accessible to all potential users

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6 0
3 years ago
You are the owner of a shoe company. You learn that it would be cheaper
diamong [38]

Answer:

Being a businessman and being charitable at the same time is just next to impossible at the time of expanding one's firm.

Explanation:

A business person's main motive has to be his ability to expand, so that he reaches that particular stage to do some charity for his fellow citizens. If you look at the unemployment part, then you must know that every person is somehow talented and in countries like the US, no one lives unemployed.

Therefore, it is necessary for a business person to calculate the cost factors, that does not only include the cost of labors, but also the cost of exporting the materials to Bangladesh and the cost of importing the final products. Then he needs to compare the total cost making the shoes in Bangladesh with making them via the US labors, and then take the decision accordingly.

3 0
3 years ago
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company
Monica [59]

Answer:

$91

Explanation:

Given the following information,

Direct materials per unit = $54

Direct labor per unit = $20

Variable overhead per unit = $6

Fixed overhead for the year = $462,000

For Absorption costing method, it includes all costs associated with production, including fixed and variable cost. The unit product cost is calculated using direct material, direct labor and total unitary manufacturing overhead.

Unitary cost = (Fixed overhead for the year / Units produced) + Direct materials per unit + Direct labor per unit + Variable overhead per unit

Unitary cost = ($462,000 / 42,000) + $54 + $20 + $6

Unitary cost = $11 + $54 + $20 + $6

Unitary cost = $91

Therefore, the product cost per unit is $91

5 0
2 years ago
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Gekata [30.6K]

Answer:

E. Thompson memo

Explanation:

The name 'Thompson Memo' was used to honor the Deputy attorney General that first issued the memo in 2003. His name is Larry Thompson.

The memo was created to distinguished the line between the 'honest mistake' that the company might do and an actual wrongdoings that must be punished by law.

The memo consist of several criteria that future prosecutors can use to determine whether a company should be punished or not. Those criterias are:

- The nature/seriousness of the offense

- Whether they did a similar 'mistake in the past

- Whether the company admit the mistake by their own or whether it's exposed by other people

- Whether the company proposed a remedial action.

8 0
2 years ago
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