Answer:
$2,280,872
Explanation:
The computation of the liability that would be recorded by Jenkins is shown below
= Payment per year × annuity factor at 8% for 10 years + extra amount × discounting factor at 8% and 10 year
= $201,100 × 6.71008 + $2,011,000 × 0.46319
= $1,349,397 + $931,475
= $2,280,872
hence, the liability is $2,280,872
The answer is Business Districts
Answer:
1. Keynesian economists think that <u>_Income</u> is the key determinant of consumption and spending.
2. Classical economists think that the higher the _interest rates____, the more people will save, which means that they will consume less.
3. A person's _<u>expectations </u>about how much income he/she will earn in the future as well as future prices could shape how much he/she spends and saves today.
4. The more _<u>wealth</u> the person has, the less current consumption he/she undertakes.
5. A person's total income can be divided into three components: consumption, savings, and <u>household debt</u>.
6. Savings, which is total income minus consumption and taxes, can be used to create more __<u>taxes</u>.
Answer:
Expected return on equity is 11.33%
Explanation:
Using Weighted Average Cost Capital without tax formula, overall rate of return is given by the formula:
WACC=(Ke*E/V)+(Kd*D/V)
Kd is the cost of debt at 6%
Ke is the cost of equity at 12%
D/E=1/2 which means debt is 1 and equity is 2
D/V=debt/debt+equity=1/1+2=1/3
E/V=equity/debt+equity=2/1+2=2/3
WACC=(12%*2/3)+(6%*1/3)
WACC=10%
If the firm reduces debt-equity ratio to 1/3,1 is for debt 3 is for equity
D/V=debt/debt+equity=1/1+3=1/4
E/V=equity/debt+equity=3/1+3=3/4
WACC=10%
10%=(Ke*3/4)+(6%*1/4)
10%=(Ke*3/4)+1.5%
10%-1.5%=Ke*3/4
8.5%=Ke*3/4
8.5%=3Ke/4
8.5%*4=3 Ke
34%=3 Ke
Ke=34%/3
Ke=11.33%
I think it would be callable certificate of deposit