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4 years ago

You would be making a wise decision if you chose to:________.

Business

2 answers:

Korolek [52]4 years ago

7 0

Answer:

c. accept the loan with the lower effective annual rate rather than the loan with the lower annual percentage rate.

Explanation:

In the above scenario it will be a good financial decision to choose a loan with lower effective rate than the one with lower percentage rate.

Effective rate is defined as the real interest rate on a loan or the actual amount that is to be repaid annually on a loan. It gives a truer picture of cost of borrowing money.

Percentage rate is interest paid on a loan expressed as a percentage of the total amount collected. It usually includes various fees and charges collected by the lender. So it is not a true reflection of the cost of borrowing

AlekseyPX4 years ago

5 0

Answer:

c. accept the loan with the lower effective annual rate rather than the loan with the lower annual percentage rate.

Explanation:

The effective annual rate is the actual rate of interest that you will have to paid on the loan. The effective annual rate takes into account the compounding interest over the loan's period of time.

An annual percentage rate can be either nominal (without taking compounding into account), or effective. For this reason, to make sure that you are making the most rational decision, you should take the loan with the lower effective annual rate, because the lower annual percentage rate may be either nominal or effective.

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A job can be done with Machine A that costs $12,500 and has annual end-of-year maintenance costs of $5000; its salvage value aft

sdas [7]

Answer and Explanation :

As per the data given in the question,

Present value = Amount ÷ (1 + r)^n

Machine A

Year Amount Discount Factor PV

1 $5,000 1.05 $4,761.90

2 $5,000 $4,535.15

3 $5,000 $4,319.19

Total $13,616.24

Now

Present value of salvage value =$2,000 ÷ 1.05^3 = $1,727.68

Present worth of Machine A is

= -$12,500 - $13,616.24 + $1,727.68

= -$24,388.56

Similarly Present worth of Machine B = -$15,000 - $4,000 ÷ 1.05 -$4,000 ÷ (1.05)^2 - $4,000 ÷ 1.05^3 - $4,000 ÷ 1.05^4 + $1,500 ÷ 1.05^4

=-$24,658.94

Based on the comparison between Machine A and Machine B

Machine A is better because it has higher present worth

Annual worth:

For machine A = -$12,500(A/PA,5%,3) -$5,000+$2,000(A/F,5%,3)

=-$12,500 × 0.367 - $5,000 + $2,000 × 0.317

= -$8,953.5

For Machine B:

= -$15,000(A/P,5%,4) - $4,000 + $1,500(A/F,5%,4)

= -$7,882.16

Based on the comparison between Machine A and Machine B

Machine B is better because it has higher annual worth

Capitalized cost:

Machine A :

= -$12,500+$2,000(P/F,5%,3) - $5,000 ÷ 0.05

= -$12,500 + $2,000 × 0.86 - $5,000 ÷ 0.05

= -$110,772

Machine B :

=-$15,000(P/F,5%,4) - $4000 ÷ 0.05

=-$15,000 × 0.82 - $4,000 ÷ 0.05

= -$93,765.9

Based on the comparison between Machine A and Machine B

Machine B is better because it has lower capitalized cost

3 0

3 years ago

Which of the following statement is TRUE about variable expenses?

loris [4]

Answer:

B.The amount you spend on variable expenses changes from month to month.

Explanation:

Variable expense is that which changes in proportion to increase or decrease in production, sales or any relevant activity. You pick the hint from the word "variable" which means 'changing' and from understanding this, you eliminate the choices that say otherwise.

6 0

3 years ago

Read 2 more answers

_____ is defined as the relationship between benefits and the sacrifice necessary to obtain those benefits.

Umnica [9.8K]

Answer:

(A). Customer value

Explanation:

<u>For a customer to obtain value or benefit from using a product, he or she must first make a sacrifice</u>, such as the amount of money spent or time taken to purchase the product.

Customer value refers to that <u>benefit the customer gets from using the product, compared to the sacrifice the customer makes to get it.</u>

3 0

3 years ago

Tia and Eric went to trade school at the same time. Each graduated with an associate's degree. They have received similar perfor

8090 [49]

Answer:

differences in human capital

Explanation:

Here are the options :

differences in human capital

differences in signaling

discrimination

chance

Human capital is an example of an intangible asset. It is the economic value attached to labours' skills and expertise.

Qualities of human capital includes

Education.
on-the-job training.
Hard work
experience
Mental and emotional well-being.
People management.
Communication skills.

Tia's employer has more human capital qualities when compared with Eric's employer. Tia's employer is more hardworking and experienced. Due to these skills. Tia's employer is likely to make more profit than Eric's employer. This can explain the wage differential between Tia and Eric

7 0

3 years ago

Which of the following is an example of a global strategy? Multiple Choice Consumer electronics companies developing different m

Tasya [4]

Answer:

Starbucks standardizing its products across the United States and other countries

Explanation:

When a company takes a global strategy, it means it is looking forward to competing and expanding itself in the global market. A global strategy represents the strategy and plans that a business implements to expand in other countries to profit more from the goods or services it offers abroad.

6 0

3 years ago