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Consider the following five situations. In which situation would a borrower be best off and in which situation would a lender be

umka2103 [35]

Answer:

The borrower is best off in situation "a" and the lender is best off in situation ▼ "C" .

Explanation:

Considering all the situations given in the options, the borrower is best in situation a and lender is best off in situation in c.

Part a

Real Interest rate = Nominal Interest rate - Inflation rate = 14 - 17 = -3 per cent. Thus, the purchasing power of money has fallen and the person has to pay back money with little purchasing power as compared to the value of the purchasing power at the time he borrowed money. Thus, borrowers are best off.Thus, borrower is best off when the inflation rate is very high.

Part c

Inflation rate is negative, thus the purchasing power of money will increase and lenders will get back money with higher purchasing power as compared to the value of the purchasing power of money at the time he lend the money. Thus, lender is best off when inflation rate is lowest.

5 0

2 years ago

Which action is a part of an ambassador's job?

alukav5142 [94]

A, representing the US in a foreign country. An ambassador is a negotiator representing a cause, in this case the US.

If this helped please rate, thank, and give brainliest answer!

7 0

3 years ago

Read 2 more answers

Today, labor unions represent about ________ percent of the labor force. quilet

pashok25 [27]

12.4
Hope this helps! :)

6 0

2 years ago

Read 2 more answers

Discount Mart utilizes the allowance method of accounting for uncollectible receivables.

lara [203]

Answer: See explanation

Explanation:

From the question, we are given the information that on December 12, the company receives a $540 check from Chad Thomas in settlement of Thomas's $1,280 outstanding accounts receivable, then the journal entry based on the above will be:

December 12:

Debit Cash $540

Debit Allowance for doubtful account $740

Credit Account receivable $1280

Note that the allowance for doubtful account was calculated as:

= Account receivable - Cash

= $1280 - $540

= $740

6 0

2 years ago

Kent Company's May sales budget calls for sales of $900,000. The store expects to begin May with $50,000 of inventory and to end

Kitty [74]

Answer:

$500,000

Explanation:

Given that:

Sales for the month = $900,000

Opening inventory = $50,000

Closing inventory = $55,000

Gross margin on sales = 45%

Cost of goods sold = 100 - gross margin = 100% - 45% = 55%

Hence,

Cost of goods sold = $900,000 × 55% = $495,000

Therefore, the purchase for the month

= Cost of goods sold + Closing inventory - Opening inventory

= $495,000 + $55,000 - $45,000

= $500,000

4 0

2 years ago