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romanna [79]
3 years ago
9

) Two restaurants are on the same block. One has been opened for 10 years and its a thriving business. The other one has been op

en for only a year. They both want to expand. When the two owners go to the local bank looking for a loan, which one is likely to get a lower interest rate and why?
Business
1 answer:
CaHeK987 [17]3 years ago
8 0

Answer:

The one that has been operating for the past ten years.

Explanation:

This is so because, the bank will consider it of factors which will include:

1. the stage in the life cycle of the company.

2. the credit risk level of the company.

3. the attractiveness of the company to investors.

4. the going concern assumption of the company.

Overall, the interest rate will be dependent on the kind of credit rating of the company. for a company which has been existing for long and which is thriving, the credit rating will be low. hence the bank will be taking a lower risk in giving the loan; hence the lower interest.

However for a new entity with a higher credit risk, the bank is taking a high risk lending money to such company, hence it will loan the new company at a higher interest rate.

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Which of the following tasks in the AFIstrategy framework involves putting the formulated strategy into practice through organiz
ahrayia [7]

Answer:

The answer is B.strategy implementation

Explanation:

Implementation involves putting the formulated strategy ; organizational design, structure, culture, control

3 0
3 years ago
What does a decrease in supply result in?
strojnjashka [21]

Answer:

The correct answer is option c.

Explanation:

A decrease in the supply will cause the supply curve to shift to the left. This leftward shift in the supply curve will further cause the demand and supply curve to intersect at a higher point.

As a result, there will be an increase in the equilibrium price and a decrease in the equilibrium quantity.

This also represented in the figure given below.

7 0
3 years ago
Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 39,000 units
Gemiola [76]

Answer:

Each product will be allocated with 38.30 dollars of manufacturing overhead as both takes 0.81 DLH

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

To calcualte the overhead rate we need to distribute the expected cost over the expected cost driver, in this case, labor hours:

(39,000 + 8,000) x 0.81 DLH = 38,070 labor hous

$1,800,000 overhead / 38,070 DLH =  47,281323877

the overhead per hour is $47.28

overhead per product:

47,281323877 x 0.81 = 38,29787234 = <u><em>38.30</em></u>

4 0
3 years ago
Radek Company estimates its uncollectible accounts by aging its accounts receivable and applying percentages to various aged cat
stepladder [879]

Answer:

the  bad debt expense that reported in the income statement is  $2,300

Explanation:

The computation of the bad debt expense that reported in the income statement is as follows;

= Total estimated uncollectible accounts - unused balance

= $3,200 - $900

= $2,300

Hence, the  bad debt expense that reported in the income statement is  $2,300

7 0
2 years ago
Assuming the company uses US GAAP standards, what is the total cash flow from financing activities?
saveliy_v [14]

Answer:

$30

Explanation:

The cash flows from financing activities will include:

+ issuance of preferred stock

+ issuance of bonds

- paid off long-term bank borrowings

- repurchase of common stock

- dividends paid

cash flows from financial activities = $35 + $50 - $15 - $30 - $10 = $30

The $45 resulting from the debt retired through issuance of common stock was not a financial operation, therefore it is not included in the cash flow form financial activities.

6 0
3 years ago
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