Answer:
The correct answer is unwillingness of borrowers to obtain loans from banks to invest in factories or expansion of the firm.
Explanation:
Solution
<em>Given that:</em>
Leakage problem occurs or happens within an economy when the money goes out of the economy, which leads to a loss in the economic value of goods and services, and also leads to loss in profits making.
This would lead to an unwillingness of borrower's to obtain loans from banks in the expansion of the firm or to invest in factories.
Answer:
$77,500
Explanation:
The computation of the cash disbursement for June month is shown below:
= June purchase × month percentage given + May purchase × following month percentage + April purchase × second following month percentage
= $60,000 × 25% +$ 90,000 × 50% + $70,000 × 25%
= $15,000 + $45,000 + $17,500
= $77,500
The remaining percentage would be
= 100% - 25% - 50%
= 25%
Answer:
a. Project Low because its expected rate of return is higher than its WACC
Explanation:
Weighted Average Cost of Capital WACC determines firms cost of capital. It includes all sources of finance which are included in firm capital structure. The expected rate of return is the rate at which a project is able to generate return or benefits. For any project to be beneficial, its expected return should be higher than its WACC. We will select project Low because its expected rate of return is higher than its WACC.
