Answer:
The cost of borrowing money becomes greater.
Explanation:
To borrow money from the bond the firm Intel needs to issue bonds. Then, it needs to pay interest on these bonds. This interest is the cost of borrowing.
When there is an increase in the interest rate in the market, the firm will be required to more interest. This increases the cost of borrowing from the bond market.
The returns from the new factory may not be able to cover this increased cost of borrowing. As a result the firm will be discouraged from borrowing.
<span>Planning teams are most effective when (C) the group finds common ground on which to build consensus for action. In a team there are different people with different points of view. To bring these people together in an attempt to find what they all like or have in common will help to focus the group's purpose on their goal for planning.</span>
Orange Fund with Year 1 return of 0% & Year 2 return of 0%.
Answer:
True
Explanation:
To illustrate how the sum-of-the-digits method allocates interest we can use a lease example:
You are the lessor and you will lease a machine during 4 years. The lease requires 4 equal payments of $100,000 at the beginning of the year. After the lease, the asset's salvage value = $0.
The asset's current value = $300,000, so total interests received = $100,000
Using the sum-of-the-digits method, you will allocate interest as follows:
- year 1 = 3/6 x $100,000 = $50,000
- year 2 = 2/6 x $100,000 = $33,333
- year 3 = 1/6 x $100,000 = $17,000
The largest portion of interests is allocated during the beginning of the loan.
