1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Natasha2012 [34]
3 years ago
9

5. Interest, inflation, and purchasing power

Business
1 answer:
White raven [17]3 years ago
3 0

Answer:

Initially the purchasing power of her $3000 deposit is 300 (3000/10) baseball caps.

Annual Inflation rate 0 %

Price of base ball cap $10

3000*1.05=3150

Purchasing power= 3150/10= 315 caps at 0 percent inflation

Annual Inflation rate 5 %

Price of baseball cap = 10*1.05= 10.5

Purchasing power = 3150/10.5

=300 caps at 5 percent inflation

Annual Inflation rate 8%

Price of baseball cap =10*1.08= 10.8

Purchasing power =3150/10.8

=291 caps at 8 percent inflation

Real interest rates

(1+nominal interest rate)= (1+inflation)(1+real interest rates)

Real rate at 0 percent inflation

1.05=1(1+R)

R=1.05-1

R=0.05= 5%

Real rate at 5 percent inflation

1.05=1.05*(1+r)

R=0%

Real rate at 8 percent inflation

1.05=1.08*(1+r)

=-0.02

=-2%

Explanation:

You might be interested in
On January 1, 2020, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on Januar
Ede4ka [16]

Answer and Explanation:

Journal entry to record the issuance of the bonds.

A.

Jan 1

Dr cash $500,000

Cr bonds payable $500,000

B. Journal entry to record the accrual of the interest

Dec 31 2020

Dr Interest expense $25,000

Cr Interest Payable $25,000

C. Journal entry to record the payment of interest on January 1, 2021.

Dr Interest expense $25,000

Cr Cash $25,0000

Interest expense $500,000×10%×1/2=$25,000

3 0
2 years ago
we come to them who weep foolishly and sit down and cry for company, instead of imparting to them truth and health in rough elec
gtnhenbr [62]

Answer:

Emerson elaborates what is know as rough love

Explanation:

Sometimes to bring out the best in a person it is necessary to do things against his or her will, this happens a lot in cases where the parent educates the child or a close family member or friend worries for the welfare of the loved one, and is determined to taking action to change the situation and that includes applying discipline; or for example, hiding drinks from an alcoholic's son or even punishing a children for misbehave.

Emerson elaborates this in a succinct and not too apparent way, emphasizing the need for relationship with discipline.

4 0
3 years ago
Kimberly has been planning to purchase a digital camera for a long time. She finally makes the purchase and is happy because she
WARRIOR [948]

Answer: Option A      

       

Explanation: In simple words post decision resonance refers to the feeling of regret that one gets after making  decision that the choice they made was not correct.

This theory suggests that the level of regret that one feels depends on two factors, the net desirability between the option chooses and option not chooses,  the importance of the decision made in the Decision makers life.

In the given case, Kimberly bought a camera and now think she did not make right choice. Hence from the above we can conclude that the correct option is A.

3 0
2 years ago
Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2016:
dimaraw [331]

Answer:

b. The indirect method

Explanation:

The Operating Activity Section Calculates the Net Cash flow from Operating Activities. It can be prepared in only two methods according to IAS 7.The methods are Indirect Method, Direct Method

Indirect Method Reconciles the Net Income for the Year to the Net Cash  flow from Operating Activities after adjustments of Non- Cash flow Items, and Adjustments for Working Capital Movements.

Direct Method focuses on the Cash Inflows and Outflows related to the Operating activities to Calculate the Net Cash  flow from Operating Activities.These Cash flows results from Receipts from Customers and Payments made to Suppliers and Employees

6 0
2 years ago
Marmol Corporation uses the allowance method for bad debts. During year 1, Marmol charged $30,000 to bad debt expense, and wrote
4vir4ik [10]

Answer: Option (d)

Explanation:

Under this case the write off will be as follow:

                                                                      Debit         Credit

Allowance for doubtful accounts                25,200  

Accounts receivables                                                     25,200

Here, in this case the Allowance for the doubtful accounts and Accounts receivables are further decreased as the outcome of the transaction made. Thus, there will be no further effect on working capital. Therefore the $30,000 that is bad debt would then be stated as the credit to allowance account. This will then decrease the working capital by $30,000.

4 0
3 years ago
Other questions:
  • Reviewing census data to see how many seniors over 55 are near your proposed location is an example of:
    12·1 answer
  • Abbie Marson is the sole owner and operator of Great Plains Company. As of the end of its accounting period, December 31, Year 1
    6·1 answer
  • To change document properties, first tap or click FILE on the ribbon to open the Properties view.
    13·1 answer
  • Consider an identical basket of goods in both the U.S. and Taiwan. For a given nominal exchange rate, in which case is it certai
    9·2 answers
  • A __________ represents a long-term partnership between two or more companies established to help each firm build competitive ma
    10·1 answer
  • Kodak possesses the leading imaging technology. This technology has allowed the company to differentiate its products from those
    14·1 answer
  • Suppose sweden produces only tablets and smartphones. The resources that are used in the production of these two goods are not s
    10·1 answer
  • Sheridan Company receives a $14000, 3-month, 8% promissory note from Carla Vista Company in settlement of an open accounts recei
    9·1 answer
  • Pineapple whip, a company that makes an ice cream-like treat using pineapple, sells its branding, production techniques, and pro
    11·1 answer
  • What are the two steps a producer can take to gain an absolute advantage? produce more goods. use high-quality resources. produc
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!