The financial crisis of 2008 demonstrated the flaw in a bottom-up detailed approach to calculating risk. There are

Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $

Vlad1618 [11]

Answer:

c. 10.38%

Explanation:

Loan Amount = $10,000

Quarterly Interest payment = $250

Interest Payment for the year = $250 x 4

Interest Payment for the year = $1,000

Nominal interest rate = ($1,000 / $10,000) x 100 = 10%

Nominal interest rate = r = 10%

Number of periods = m = 4

Effective Interest rate = [ ( 1 + r/m )^m]-1

Effective Interest rate = [ ( 1 + 0.1/4 )^4] -

Effective Interest rate = [ ( 1 + 0.025 )^4] -1

Effective Interest rate = 10.38%

6 0

2 years ago

Lawn maintenance is an alternative energy source career.<br> A. <br> True<br> B. <br> False

Rainbow [258]

Answer:

False

Explanation:

Lawn maintenance isn't

4 0

2 years ago

At the present time, Water and Power Company (WPC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding

kicyunya [14]

Answer:

6.53%

Explanation:

For computing the after cost of debt we need to use the RATE formula i.e to be shown in attached spreadsheet. Kindly find it below:

Given that,

Present value = $1,050.76

Future value or Face value = $1,000

PMT = 1,000 × 10% = $100

NPER = 5 years

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after applying this above formula

1. The pretax cost of debt is 8.70

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 8.70% × ( 1 - 0.25)

= 6.53%

6 0

2 years ago

An economy consists of three workers: Carlos, Felix, and Larry. Each works 10 hours a day and can produce two services: mowing l

Reika [66]

Answer:

D

Explanation:

6 0

2 years ago

Sascha is in a marching band. Because the band members move together identically, the audience perceives waves of motion. Sascha

nata0808 [166]

Answer: Common fate

Explanation:

The gestalt principle of common fate explains that objects moving in the same direction with a similar speed range, are observed as being part of one body.

Sascha's band director is making use of the gestalt principle of common fate to give the audience an illusion of waves of motion from the movement of the band members.

3 0

3 years ago