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julia-pushkina [17]
3 years ago
10

Southwestern Bank offers to lend you $50,000 at a nominal rate of 6.5%, compounded monthly. The loan (principal plus interest) m

ust be repaid at the end of the year. Woodburn Bank also offers to lend you the $50,000, but it will charge an annual rate of 7.0%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern
Business
1 answer:
Mandarinka [93]3 years ago
7 0

Answer:

0.03%

Explanation:

Southwestern Bank

The Effective annual interest rate of Southwestern bank compounded monthly would be

First step

Calculation for the Effective annual rate of Riverside Bank:

rR = (1 + (0.065/12))^12 = 1.067

Second step

Calculation for the Effective annual rate of Midwest Bank:

rM = (1 + (0.07/1))^1 = 1.07

The effective annual rate of Midwest Bank is higher by :

(1.07 -1.067)

=0.003 % or 0.3%

Therefore the higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern would be 0.03%

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A business operated at 100% of capacity during its first month, with the following results: Sales (90 units) $90,000 Production
umka21 [38]

Answer:

d.$18,900

Explanation:

Gross Profit is the net of Sales value and production cost in the period for the units sold. Under absorption costing all the direct and indirect costs incurred in the production of products are included in the total production cost. As the cost is available for 100 units produced we need to calculate the cost of 90 unit and deduct this cost from the sales value to determine the gross profit and then deduct the operating expenses to calculate the operating income.

Sales (90 units)                                                                  $90,000

Less: Production costs:

Direct materials ( $40,000 x 90/100 )              $36,000

Direct labor ( 20,000 x 90/100 )                       $18,000

Variable factory overhead ( 2,000 x 90/100 ) $1,800

Fixed factory overhead ( 7,000 x 90/100 )      <u>$6,300</u>

Total Production cost                                                       <u>($62,100)</u>

Gross Profit                                                                        $27,900

Less Operating expenses:

Variable operating expenses $8,000

Fixed operating expenses      $1,000

                                                                                          <u>($9,000)</u>

Operating Income                                                             <u>$18,900</u>

6 0
3 years ago
Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managi
Anestetic [448]

Answer:

<u>A Star.</u>

Explanation:

The Boston Consulting Group (BCG) matrix depicts a product's market share against the market growth rate. The matrix is also known for it's cow- dog metaphor.

The matrix represents 4 situations namely:

1. Stars : Products with high market share in high growth markets i.e high- high situation.

2. Cash Cows: Products with high market share in low growth markets.

3. Question Mark: Products with low market share in a high growth markets.

4. Dogs:  Products with low market share in low growth markets.

In the given case, the product dominates the market i.e high market share. Secondly, it operates in a high growth market. Which means, the product belongs to the situation of a Star.

8 0
3 years ago
During the year, Belyk Paving Co. had sales of $2,560,000. Cost of goods sold, administrative and selling expenses, and deprecia
scoundrel [369]

Answer:

Net income -$268,000

Operating Cash Flow $511,000

Explanation:

A. Calculation for the Net income

INCOME STATEMENT

Sales $2,560,000

Cost of goods sold $1,364,000

Other expenses $685,000

Depreciation $477,000

EBIT $34,000

Interest $302,000

Taxable income -$ 268,000

($34,000-$302,000)

Taxes (24%) 0

Net income -$268,000

CALCULATION FOR EBIT

Sales $2,560,000

LESS:Cost of goods sold ($1,364,000)

Other expenses ($685,000)

Depreciation ($477,000)

EBIT $34,000

Based on the information given we were told that we should ignore any tax loss which was why Taxes (24%) was $0

The taxes are zero since we are ignoring any carryback or carryforward provisions.

Therefore NET INCOME is -$268,000

B. Calculation for operating cash flow

Using this formula

Operating Cash Flow = EBIT + Depreciation - Taxes

Let plug in the formula

Operating Cash Flow= $34,000 + $477,000 - 0

Operating Cash Flow = $511,000

Therefore Operating Cash Flow is $511,000

3 0
3 years ago
If the Fed increases the discount rate, which of the following accurately describes the sequence of events that will follow in t
AnnZ [28]

Answer: A. Reserves ↓: Excess reserves ↓; Loans ↓; Deposits ↓; Money supply ↓

Explanation:

The discount rate is the rate at which the Fed lends money to banks and other depository type institutions. Normally banks have a reserve requirement that the Fed requires of them which states how much they are to leave with the Fed as a reserve. Banks tend to fall short of this reserve sometimes and so can borrow from the Fed to balance it off.

If the Fed increase the rate at which these banks can borrow, they will not want to do so thus leaving their Reserves at the Fed lower than it should be. They will then use their excess reserves which is money kept in reserve more than the Fed requires, to balance off their reserve at the Fed.

As a result of this reduction in their Excess reserve, they will have less money to give out as loans. With less loans being made, people will not have as much money to deposit after taking the loans. Money supply will then fall as a whole.

4 0
3 years ago
extreme weather in new york, where the super bowl is scheduled to be played, makes people disinterested in purchasing super bowl
alexira [117]

The following scenarios would place a downward pressure on price:

  1. .The Nile River floods this year add an exceptional amount of silt to the soil, resulting in increased crops of cotton.
  2. An outbreak of mad cow disease causes Americans to abstain from eating beef.
  3. Extreme weather in New York, where the Super Bowl is scheduled to be played, makes people disinterested in purchasing Super Bowl tickets.

The following scenarios would place a downward pressure on price:

An impending unclear holocaust causes people to stock up on twonkies, a popular snack cake provided by many companies

<h3>What would lead to either a upward or downward pressure on price?</h3>

There is an upward pressure on price if demand increases or supply reduces. There is a downward pressure on price if demand decreases or supply increases.

As a result of the slit, there would be an increase in the supply of cotton. This would lead to an downward pressure on price. The mad cow disease would lead people to demand less beef. This would lead to an downward pressure on price. The extreme weather would lead to people not coming for the game. This would lead to an downward pressure on price.

Due to the expectation of the holocaust, there would be an increased demand for twonkies. This would lead to an upward pressure on price.

Here is the complete question:

Decide whether each scenario would lead to upward or downward pressure on the equilibrium price for each good in bold font.

1.The Nile River floods this year add an exceptional amount of silt to the soil, resulting in increased crops of cotton.

2.An outbreak of mad cow disease causes Americans to abstain from eating beef.

3. Extreme weather in New York, where the Super Bowl is scheduled to be played, makes people disinterested in purchasing Super Bowl tickets.

4. An impending unclear holocaust causes people to stock up on twonkies, a popular snack cake provided by many companies

For more information about the change in demand, please check: brainly.com/question/25871620

#SPJ1

3 0
2 years ago
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