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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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Using the Base Case, calculate total depreciation expense for the year 2023E. Assume that depreciation expense on assets pre-202
balu736 [363]

Answer:

b) $33,000

Explanation:

Capital Expenditure = $20,000

Salvage Value in % = 10%

Useful Life = 4 Years

Salvage Value = Salvage Value% * Capital Expenditure

Salvage Value = 10% * 20,000

Salvage Value = $2,000

Annual Depreciation = (Capital Expenditures - Salvage Value) / Useful Life

Annual Depreciation = ($20,000 - $2,000) / 4

Annual Depreciation = $18,000 / 4

Annual Depreciation = $4,500

Depreciation of 2023E = Depreciation Pre 2020E + Depreciation on capital expenditures in 2020E + Depreciation on capital expenditures in 2021E + Additional Depreciation on capital expenditures in 2022E + Additional Depreciation on capital expenditures in 2023E

Depreciation of 2023E = $15,000 + $4,500 + $4,500 + $4,500 + $4,500

Depreciation of 2023E = $33,000

7 0
2 years ago
4. Carter owns a hair salon. He sets his own schedule based on commitments to his kids and his clients needs. Which core dimensi
Dafna11 [192]
That answer is skill variety
4 0
3 years ago
In the five forces model, the __________ that companies compete against one another for customers, the _________ the level of pr
slava [35]
<span>In the five forces model, the more that companies compete against one another for customers, the lower the level of profits is likely to be for that industry.</span>
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3 years ago
Vaughn Inc. acquired all of the outstanding common stock of Roberts Co. on January 1, 2020, for $276,000. Annual amortization of
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ΗΘΕ

Explanation:

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3 years ago
As the average hourly wage increases from $18 per hour to $20 per hour, the quantity of frozen dinners demanded decreases from 3
horrorfan [7]

Answer:

The income elasticity of demand for frozen dinners is negative when there is an increase of hourly wages. -51%

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When the income elasticity is negative it means that the good is inferior so when the income is increased, the demand of the good decrease beacuse its demand change to a better quality good. For instance in this case a fresh meal.

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(((3350-3550)/3550)/((20-18)/18))*100

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