Margot company purchases $100,000 face amount, 6% semi-annual bonds for $110,000 when the market interest rate is 5%. margot should recognize the following interest revenue for the first 6-month period:
$3,000
Rationale:
$100,000 x (6% x 6/12)
The amount that the lender charges the borrower over and beyond the principal amount is referred to as the interest rate. A person who deposits money in a bank or other financial institution also earns additional income in terms of the recipient, known as interest, taking into account the time value of money.
The amount that a lender charges a borrower for the use of assets on top of the principal is known as the interest rate.
The money generated from a deposit account at a bank or credit union is likewise subject to an interest rate.
Simple interest is used in most mortgages. Compound interest, which is applied to both the principle and the accrued interest from earlier periods, is used in some loans, nevertheless.
The interest rate will be lower for a borrower who the lender deems to be low risk. The interest rate on a loan will be greater if it is thought to be high risk.
Learn more about interest rates here:
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Answer:
Alvin should pay off the unpaid money.
Explanation:
The Alvin should pay off the balance of credit card with his extra money because the interest rate charged by the bank on the unpaid balance is very high (18 %) and the interest rate on saving is 1 % which is very low. If the unpaid balance will not be paid then Alvin’s extra money will go into the payment of interest rate. So, at first thing he should pay off the unpaid money.
A major disadvantage of the direct mail would be the cost.
Direct mail tend to need personalised copywriters, artists, and photographers for its making in order to make it more interactive.
And considering that most direct mail ended up with low response, the expense that you put for the making may not ba able to be turned into profit.
Answer:
<u>Zone of tolerance</u>
Explanation:
Zone of tolerance with respect to a service refers to, the acceptable range to a customer, that lies between the perceived desired level of service expected and the minimum level of service acceptable.
The service which the customer anticipates or expects to be delivered by a firm is referred to as predicted service.
Customer expectations do not depict a single level of expectation, rather they follows a range of expectations. This range is represented as zone of tolerance.
If the service received lies in the zone of tolerance, the customer would be satisfied. If it is higher than the desired level, the customer would consider it exceptional.
In case the service received falls below the minimum level of acceptance, the customer would be disappointed and feel deceived or tricked.
Answer:
Comparability : Inter company comparison , Consistency : Company time series comparison.
Explanation:
Consistency is quality of accounting information, enabling the same company's financial performance comparison over different periods of time. Consistency needs stable accounting methods used for a considerable period of time, unless their changing is necessary.
Eg : Using whichever method straight line or written down value - to calculate depreciation, should not be changed unless necessary.
Comparability is the quality of accounting information, enabling the company's financial performance comparison with other companies. It needs accounting methods following generally accepted accounting principles.
Eg: Accrual basis of accounting is generally standardised, acceptable and using other i.e cash basis won't enable company's comparison with others.
Consistency and comparability are very crucial to analyse company's financial performance - growth with time, growth as per industry standards respectively.
