What is the typical relationship between time and interest rate?

In 2–3 sentences, describe how you would conduct a search for a single record.

boyakko [2]

There are several ways you can find a record. The easiest way is by using the find command. You can do this by pressing the combination keys Control + F. You will then see a mini search box in the top right corner of your screen. Lastly, type in the word, phrase, or record that you want to find. You will then be directed to several highlighted words, and TADA! :D

Hope this helps :)

7 0

3 years ago

A University of Iowa basketball standout is offered a choice of contracts by the New York Liberty.

Ratling [72]

Answer: The lowest interest rate at which the present value of the second contract exceeds that of the first is a. 7 percent.

Explanation:

Calculating present values is a useful way to compare cases where money is to be received in the future. The higher the present value (when comparing cases where you get money), the better. To calculate it, we make use of the next formula:

$PV=\frac{C}{(1+r)^{n}}$

Where PV: Present value,

C: Cash flow at a given period,

r: Interest rate, and

n: Number of periods that will have passed (in this case, we are talking about years).

Now, since we are getting money twice in each case (the first payment one year from today, and the final payment two years from today), we can restructure our present value formula to include these two payments. We will get something like this:

$PV=\frac{C_1}{1+r}+\frac{C_2}{(1+r)^{2}}$

Notice how each fraction represents one of the payments received, with one having an 'n' of 1 year, and the other one having an 'n' of 2 years. C₁ and C₂ represent the first and the second payment, respectively.

Now that we have our completed formula, let's review each contract's present value (PV) with the lowest interest rate (7%), just to see how it turns out. Remember that 7% equals 0.07 in any formula:

Contract A) This one gives her $100,000 one year from today and $100,000 two years from today.

$PV_{A,0.07}=\frac{100000}{1+0.07}+\frac{100000}{(1+0.07)^{2}}\\PV_{A,0.07}=93457.944+87343.873\\PV_{A,0.07}=180801.817dollars$

So Contract A's present value at 7% interest rate would be equal to $180801.817.

Contract B) The second one gives her $132,000 one year from today and $66,000 two years from today.

$PV_{B,0.07}=\frac{132000}{1+0.07}+\frac{66000}{(1+0.07)^{2}}\\PV_{B,0.07}=123364.486+57646.956\\PV_{B,0.07}=181011.442dollars$

So Contract B's present value at 7% interest rate would be equal to $181011.442, which exceeds that of Contract A.

Since among our options of interest rates, 7 percent is the lowest one, and, with this taken into account, the present value of the second contract (Contract B) exceeded that of the first (Contract A), the answer is a. 7 percent.

8 0

3 years ago

Village East expects to pay an annual dividend of $1.40 per share next year, and $1.68 per share for the following two years. Af

VashaNatasha [74]

Answer:

$15.15

Explanation:

Given:

D1 = $1.4
D2 = $1.68
Growth = 3.4% = 0.034
Discount rate = 13.7 % = 0.137

As we know that:

P3= ($1.68 × (1+034)) / (0.137 - 0.034)= $16.86

So, P0:

= $1.40 / 1.137 + $1.68 / 1.1372 + ($1.68+ $16.86)/ 1.1373

= $15.15

Hope it will find you well.

8 0

3 years ago

Impact of Treasury Financing on Bond Prices The Treasury periodically issues new bonds to finance the deficit. Review recent iss

brilliants [131]

Answer:

When the treasury bonds are restricted to purchase it creates pressure on other securities and interest rates tend to move upwards.

Explanation:

When interest rates more upwards then cost of borrowing is increased. This increase in cost of borrowing creates pressure on the profits of private sector. The public sector benefits from this increase in interest rates. When government is in trouble and financing is limited then these measures are used to run the economy.

3 0

3 years ago

When Tesla first launched their electric vehicles in the United States, they deviated from the norm in the automobile industry a

Damm [24]

Answer:

The choice of Tesla is known as Forward Integration.

According to the principles of Transaction Cost Economics, this is a good decision.

Explanation:

Companies sometimes take over the operations/businesses that deal with the distribution and supply of their products and or services. This move is known as forward integration.

Traditionally, companies focus on production then bring in middle-men such as Franchise owners, wholesales, dealers, and retailers to distribute their merhandise to the end user. Whilst there are associated benefits with this model, it's been found that the interests of the middle men also generate considerable costs.

In order to competitive advantage, companies are modifying their business models such that end users can deal directly with them thus reducing the final price of their goods and or services making them more accessible and easier to purchase for the consumers.

Transaction Cost Economics refers to the various ways in which an organisation can be set up in order to manage or control the costs associated with its transactions. The goal of transaction cost economics is to reduce overall costs in order to optimize profits, stay competitive and maintain growth by managing and modifying organisational structures and business models.

The most optimized organisational structure/business model is that which is able to attain the highest efficiency possible by operating at the lowest cost possible.

Good or Bad Decision

The market for motor vehicles is an oligopoly.

Therefore, price is an important factor to consider. As a more recent entrant into that space, this is very crucial for Tesla.

Tesla is not only entering into a market dominated by giants, but is also tryin to modify the way people know to drive cars (at least in most parts of the world). Therefore, it is a great move that it is going with a Price Penetration Strategy. Thus by cutting off the Franchise-Oriented dealerships and selling directly, Tesla is able to retain control over the price of it's vehicles.

The whole essence of reducing it's costs is so that it is able to make its products available to the consumers as an alternative to fossile fuel powered vehicles at the lowest cost possible. Despite it's best efforts, there are still petrol powered cars that are at least $10,000 cheaper that what Tesla is offering.

Besides price, one major factor that influences the choice to go with hybrid or 100% of electric cars is that they are clean and very environmental friendly.

Cheers!

5 0

3 years ago