Answer:
Explanation:
From the given information;
Suppose the interest rate is constant. then at 10% three-year loan;
The total interest at 10% will be:
= $300000 × 10% × 3years
= $90000
Aso, 8% one year loan with rollover will be total interest at 8%:
= $300000 × 8% × 3 years
= $72000
Savings in interest of Sauer Food Company = $(90000 - 72000)
= $18000
Suppose short-term rates change, then for the first year, we will have:
= 300000 × 0.1
= $30000
second year will be = 300000 × 0.13
=$39000
third year will be= 300000 × 0.18
=$54000
As such, the total rate of the variable loan = $30000 + $39000 + $54000
= $123000
However, the fixed rate at 10% three year loan is equal to = $90000
As such, the additional total interest cost = $(123000 - 90000)
= $33000
Answer:
Bribery
Explanation:
Bribery is an act of influencing someone's behavior to obtain an undue advantage through giving or receiving unearned rewards .It can be in the form of gifts , money , preferred treatment , and other form of favor , but what actually defines a bribe is the intention behind the gifts.
It has a lot of negative effects either directly or indirectly on the public as it undermines equity , efficiency , integrity in the public service , undercut public confidence in markets , adds to transaction cost and effects the safety and well being of the general public .
Answer:
1) Export Competitiveness
2) Moral hazard means lack of incentive to guard against risk where one is protected from its consequences.
3) Government guarantees
Explanation:
1) The appreciation of the U.S. dollar and depreciation of the yuan worked as a catalyst to speed up the Asian currency crisis as the exports were slowed down causing a decline in growth which also gives the motivation to the central bank to devalue their currency more in order to achieve export competitiveness to boost up the exports and economy.
2) The moral hazard in this case was the government guarantees, both implicit and explicit.
3) The moral hazard of government guarantees motivates the investors to invest taking risky adventures since regulations were also lenient, and finance was available. We see over investments backed by the inflated land prices. After that it was the final nail in the coffin when the local investors dump their local currencies in order to buy foreign currencies whereas foreign loans were no longer competitive.
This statement is false. The loan period does get to affect the total cost of the loan. Loans tend to have an annual percentage rate applied to it when you had it. It is a term used to refer the interest rate of the loan you had acquired.
Inflation is 110
<u>Explanation:</u>
The consumer price index is the ratio of the basket prices of the current year to the basket price of the base year multipliers by 100, this helps us to determine inflation
now, cpi in second year = 
= 110
