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3 years ago

Why are capital appreciation bonds (CABs) a controversial way for local governments to finance projects?

Business

1 answer:

denis-greek [22]3 years ago

8 0

Answer:

See explanation section

Explanation:

Municipal security from which an investor will receive a return on investment from an initial principal is called a capital appreciation bond. However, in this security, the return on investment will be reinvested further until the security matures at a specific rate. The primary purpose of the CABs is to permit the local authority to generate revenue. Due to the financing in the innovative project without increasing the tax is one of the controversial ways for local governments to finance projects. Another controversial way is to owe investors more than what they acquired.

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Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using mon

amm1812

Answer:B. Opponents of active stabilization policy believe that significant time lag in both fiscal and monetary policy often excercebate economic fluctuations.

C. Advocate of active stabilization policy believe that the government can adjust monetary and fiscal policy to counter waves of excessive optimism and pessimism among consumers and business.

Examples of automatic stabilizer

A. Corporate income taxes

B. Personal income taxes

Explanation:

Stabilization policy helps to stabilize the economy during expansionary or deficit period however a lag in the implementation will surely affect getting the right outputs from the implementation.

The economy has inbuilt stabilizer s that tend to correct excessiveness in economy such as the personal and corporate tax . The federal fund rate will be adjusted as the need be to stabilizer the economy even though it can be used as a stabilizer but it's not an automatic stabilizer.

5 0

3 years ago

Your company has spent $290,000 on research to develop a new computer game. The firm is planning to spend $49,000 on a machine t

Maslowich

Answer:

$132,745.82

Explanation:

required investment = $290,000 + $49,000 + $5,900 + $59,000 = $403,900

depreciable amount = $49,000 + $5,900 = $54,900

Research and development costs are expensed, they cannot be capitalized. Increase in net working capital cannot be capitalized either.

MACRS depreciation expense for year 1 under 8 year class life = 14.29%

depreciation expense year 1 = $54,900 x 14.29% = $7,845.21

net cash flow year 1 = [($390,000 - $190,000 - $7,845.21) x (1 - 35%)] + $7,845.21 = ($192,154.79 x 0.65) + $7,845.21 = $124,900.61 + $7,845.21 = $132,745.82

5 0

3 years ago

I already used this app so don't need questions idk

Tom [10]

but why not save your points for when you have a question?

3 0

3 years ago

Read 2 more answers

When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?.

Vlad1618 [11]

Answer:

the condition that has been reached is market equilibrium.

5 0

2 years ago

Identify and describe the three steps that the team should follow in order to define project scope and create a project scope st

Fittoniya [83]

Answer:

3 steps are:

Planning

Controlling

Closing

Explanation:

Project scope is the term which is defined as the work that require to be achieved in order to deliver the product, result or service with the particular or specified functions as well as features.

The 3 steps which a team need to follow in defining the project scope and creating a statement of project scope is as:

1. Planning - It is that procedure where an effort is made in order to capture or apprehend and define the work which needs or required to be perform or done.

2. Controlling - The processes of monitoring and controlling focus on the scope creep, approving or disapproving the project changes, tracking and documenting tracking.

3. Closing -It is the final procedure of the project scope, it involves the audit of the assessment and the deliverables of the project against the original plan.

8 0

3 years ago