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Tcecarenko [31]
3 years ago
15

An increase in the demand for loanable funds will occur if there is A. an increase in the real interest rate. B. an increase in

the nominal interest rate accompanied by an equal increase in inflation. C. a decrease in the real interest rate. D. an increase in expected profits from firm investment projects.
Business
2 answers:
vodka [1.7K]3 years ago
8 0

Answer:

C, a decrease in the real interest rate

Explanation:

When factors such as changes in expectation, technology, demands for goods and services, etc cause in shift in the demand curve for capital, interest rates act as the determinant of the capital demand.

If the interest rates of loans are high, capital demand will be reduced but in the event that interest rates are low, capital demand is high or increases.

Cheers

Usimov [2.4K]3 years ago
6 0

Answer:

The correct answer is letter "D":  an increase in expected profits from firm investment projects.

Explanation:

The market of loanable funds represents the fluctuations in the borrowing of a market. The demand for loanable funds depends on borrowing as well. Two main factors cause changes in the demand for loanable funds: <em>changes in the expected Rate of Return (RoR) on investment spending </em>and <em>government policies. </em>

In this scenario,<em> the real interest rate follows the trend of the market. It implies if the RoR on investments increases, the real interest rate will increase as well. If the economy is underperforming, the real interest rate will decrease.</em>

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Flannery Corporation owns machinery with a book value of $520,000. It is estimated that the machinery will generate future cash
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Answer:

(d)$105,000.

Explanation:

Since the book value is more than the generated future cash flows so book value cannot be recovered. In this case, the generated future cash flows are ignored  

In this scenario, we compare the values between book value and the fair value of machinery, the difference would be the loss on impairment of the asset

In mathematically,  

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​Lucy needs to buy a new laptop for her business, and she buys a particular brand even though it does not support the software t
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Sweet Company’s outstanding stock consists of 1,000 shares of noncumulative 5% preferred stock with a $100 par value and 10,000
frutty [35]

Answer:

preferred stockholders received $15,000 during the first 3 years

  • $2,000 in the first year
  • $6,000 in the second year
  • $7,000 in the third year

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Explanation:

preferred stock = 1,000 shares x $100 par value x 5% = $5,000

common stock = 10,000 shares at $10 par value

dividends declared and paid during the first 3 years:

year       dividends

1               $2,000

2              $6,000

3            $32,000

preferred stockholders should have received $5,000 per year x 3 years = $15,000. Preferred stockholders must be paid first, and their payment is fixed. If the dividends are not enough to pay the total amount, the remaining amount should be paid next year.

  • $2,000 in the first year
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common shareholders received $32,000 - $7,000 = $25,000 in dividends during the third year.

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