Answer:
The concept of equivalence, also known as economic equivalence, describes the reduction of a series of cash inflows (benefits) and cash outflows (costs) to a single point in time, using a single interest rate, which enables the cash flows to be compared or equated. This implies that while the amounts and timing of the cash flows (both inflows and outflows) may differ, an appropriate interest rate, factoring in the time value of money, will cause one set to be equal to the other. Therefore, to establish economic equivalence, series of cash flows that occur at different points in time must be equalized using a single interest rate through present value calculations.
Explanation:
The concept of equivalence describes a combination of a single interest rate and the idea of the time value of money. This combination helps to determine the different amounts of money at different points in time that are equal in economic value, such that a person would not hesitate to trade one for the other.
For example, if the interest rate is 10% in Year 1 and in Year 2 and you are to be paid $1,000 in Year 1, it will not make any difference to you if you are paid $1,100 in Year 2. This is because, given the prevailing interest rate of 10%, the value you receive in Year 1 and Year 2 are equivalent.
Answer:
Total deposit is $39
Explanation:
Given
Required
Determine the total
To do this, we simply multiply each dollar bill or coin with its frequency and add up the results.
i.e.
So:
Answer:
False
Explanation:
As the contract was formed when the offeree has deposited acceptance letter in the mailbox, hence the offeror is bond to sell the house.
Answer:
$29.83
Explanation:
This question requires application of dividend discount model, according to which current value of share is present value of dividends expected in future.
where V2 is the terminal value, present value of dividends growing at constant growth rate,
V2 = Div3 ÷ (r - g)
Div3 = $2.24 × (1 + 2.8%)
= $2.30272
V2 = $2.30272 ÷ (0.102 - 0.028)
= $2.30272 ÷ 0.074
= $31.12
= 2.36 + 1.84 + 25.63
= $29.83
A federal budget deficit occurs when federal government purchases exceed net taxes. Option C is correct.
<h3>What is federal budget?</h3>
The federal budget is the budget of the United States. It comprises the federal government's spending and revenues.
The budget is the monetary or medium of exchange expression of the priorities of the government and showing the past conflicts and conflicting economic views.
A federal budget deficit occurs when government spending exceeds revenue, which is the money collected from, fees, taxes and investments. Deficits add to the national debt, or debt owed by the federal government.
Therefore, option C is correct.
Learn more about the federal budget, refer to:
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