Answer:
The correct answer is A. Orlando, Inc. incurred more debt specifically in its revolving line of credit.
Explanation:
The formula for the times interest-earned (TIE) ratio is:
TIE = Earnings Before Interest and Tax / Total Interest Payable
This ratio would decrease when the company's earnings decrease or when its interest payable increases, or when both occur simultaneously.
Considering option A, if Orlando Inc. incurs more debt in its revolving line of credit, it means it has to pay more interest. Therefore, when the company's Earnings Before Interest and Tax remain constant while its Total Interest Payable rises, its TIE ratio would fall.
This is exactly what happens as Orlando Inc.'s TIE ratio falls from 20.56 in 2018 to 7.35 in 2019. Hence, option A is correct. Options B to D would either cause the TIE ratio to rise or remain unaffected.
Answer:
expansionary fiscal policy.
Explanation:
Fiscal policy in economics refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.
A fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.
Basically, an expansionary fiscal policy will cause the total increase in aggregate demand to be greater than the initial increase in aggregate demand due to the multiplier process.
Hence, if during a severe recession, Congress passes legislation to cut taxes, this would be an example of an expansionary fiscal policy.
According to the Keynesian theory, government spending or expenditures should be increased and taxes should be lowered when faced with a recession, in order to create employment and boost the buying power of consumers.
The depositors funds that are greater than the required reserve are called excess reserves and may be loaned.
Answer:
16 years
Explanation:
we can use the present value of an annuity due formula:
PV of annuity due = payment + {payment x [1 - (1 + r)ⁿ⁻¹]/r}
- present value = 7,000
- payment = 650
- r = 0.059
7,000 = 650 + {650 x [1 - (1 + 0.059)ⁿ⁻¹]/0.059}
6,350 = 650 x [1 - (1 + 0.059)ⁿ⁻¹]/0.059
6,350 / 650 = 9.769230769 = [1 - (1 + 0.059)ⁿ⁻¹]/0.059
9.769230769 x 0.059 = [1 - (1 + 0.059)ⁿ⁻¹]
0.576384615 = 1 - (1 + 0.059)ⁿ⁻¹
(1 + 0.059)ⁿ⁻¹ = 0.423615384
n - 1 = log 0.423615384 / log 1.059 = 0.373028275 / 0.02489596 = 14.98336571
n = 14.98336571 + 1 = 15.98336571
if an attorney remains am ember for at least 16 years (16 ≥ 15.98336571), then the lifetime membership fee is better
Answer:
1.Aggregate supply falls
2.Aggregate supply falls
3.Aggregate supply rises due to rise in productivity.
Explanation:
1. In simple words, when the cost of production rises the profit margin of the supplier decreases leading as an incentive to supply less.
2. If the price of the input rises the cost of production also rises leading to lower supply because of lower profit margins.
3. The technological improvement leading to high production would lead to more profits and advantage of economies of scale thus working as an invective to supply more.