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larisa86 [58]
3 years ago
10

Suppose the fixed interest rate on a loan is​ 5.75% and the rate of inflation is expected to be​ 4.25%. The real interest rate i

s​ 1.5%. Suppose now that instead of​ 4.25%, the inflation rate unexpectedly reaches​ 5.5%. Who gains and who loses from this unanticipated​ inflation? ​(Mark all that​ apply.)
Business
1 answer:
Alex3 years ago
8 0

Answer:

Lenders loose and borrowers gain

Explanation:

Whenever inflation increases the value of money falls and technically erodes interest rates (hence real interest rate falls although nominal rate stays the same)

In the scenario, if the inflation rate rises to 5.5%, then the real interest rate falls further from 1.5% to (5.75% - 5.5%) 0.25%, demonstrating that the lender is loosing further.

Contrarily, the borrower will technically be paying lesser interest to the lender because he will be paying lesser money in value to the lender both in terms of interest and principal

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Sheela Dairy Corporation buys unprocessed cows' milk from local farmers. At the dairy, this unprocessed milk is broken down into
Dafna11 [192]

Answer:

The answer is D) None of these statement is relevant in the decision to further process the cream into butter.

Explanation:

option A)  the amount paid to the farmers to purchase the unprocessed milk: this information is not relevant to further develop the cream and low fat milk to butter. It was already considered before this stage of production.

Option B) the cost of breaking down the unprocessed milk into cream and low-fat milk: this cost was already accounted for since the processing into cream and low fat milk is completed.

Option C) the portion of corporate fixed expenses that are currently being allocated to cream: This information is not going to help in the decision making for further processing.

8 0
3 years ago
What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.) Total manufacturing cost_____
Nastasia [14]

Answer:

$52,285

Explanation:

The computation of the total manufacturing cost assigned to Job P is shown below:-

Total manufacturing cost = Direct material + Direct labor + Manufacturing overhead applied

= $13,000 + $21,000 + (2,300 × $7.95)

= $13,000 + $21,000 + $18,285

= $52,285

Therefore for computing the total manufacturing cost assigned to Job P we simply applied the above formula.

6 0
3 years ago
Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the bo
grigory [225]

Answer:

The correct options are as follows

Buyers will pay all of the tax.

The price of Humbugs will rise to $60.

The quantity of Humbugs demanded will not change.

Explanation:

As the question is not complete, the complete question is found online and is attached herewith.

The options given are as follows

Sellers will pay all of the tax.

Buyers will pay all of the tax.

The price of Humbugs will rise to $60.

The price of Humbugs will rise by less than $10.

The quantity of Humbugs demanded will not change.

Now option 1 is not correct as the buyer has to pay the tax not the seller.

option 2 is correct

option 3 is correct

option 4 is not correct as the initial price is $50 and the new price is to be more than $60 thus the rise is more than $10.

option 5 is correct as the demand of the hamburger will remain the same.

5 0
3 years ago
Cash 30,000 Accounts receivable 65,000 Inventory 72,000 Marketable securities 36,000 Prepaid expenses 2,000 Intangible assets 40
lyudmila [28]

Answer:

2.7 times

Explanation:

The computation of the current ratio is shown below:

Current ratio = Current assets ÷ Current liabilities

where,

Current assets = Cash + account receivable + inventory + marketable securities  + prepaid expense

= $30,000 + $65,000 + $72,000 + $36,000 + $2,000

= $205,000

And, the current liabilities is

- Account payable + accrued liabilities + short term note payable

= $40,000 + $7,000 + $30,000

= $77,000

So, the current ratio is

= $205,000 ÷ $77,000

= 2.7 times

5 0
3 years ago
Inventory records for Marvin Company revealed the following: Date Transaction Number of Units Unit Cost Mar. 1 Beginning invento
lakkis [162]

Answer:

Ending inventory cost= $5,556.92

Explanation:

Giving the following information:

Mar. 1 Beginning inventory 900 $ 7.26

Mar. 10 Purchase 520 7.76

Mar. 16 Purchase 452 8.36

Mar. 23 Purchase 510 9.06

Units sold= 1,760

<u>Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the costs of the last units incorporated into inventory:</u>

<u></u>

Units in ending invnetory= 2,382 - 1760= 622

Ending inventory cost= 510*9.06 + 112*8.36

Ending inventory cost= $5,556.92

3 0
2 years ago
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