All categories

3 years ago

The term economic cycle refers to what? How does it impact a business?

Business

1 answer:

insens350 [35]3 years ago

8 0

Answer:

Refers to the oscillation of production

Explanation:

The term economic cycle refers to the movements of prosperity and decay in economic activity (GDP), that is, the alternations that occur between periods of growth and economic recession over time. Cycles affect business, because in a prosperous period the business environment generates higher returns, while in the recession phase it becomes unfavorable due to the unstable environment.

You might be interested in

A loan is amortized over five years with monthly payments (i.e. end of month) at an annual nominal interest rate of 5% compounde

BlackZzzverrR [31]

Given:
Amortizing period = 5 years
APR=5% per annum
interest rate, i = 0.05/12 per month
number of periods, n = 5*12=60 months (for amortization)
Payment schedule:
$500 at the end of first month,
increased by $20 each month thereafter.
Borrowed amount: not given

Question: Find outstanding loan balance after the 40th payment.

Solution:
Step 1: First we need to find the amount borrowed, P.
From the payment schedule, we decompose the payment into two components,

A. Equivalent uniform monthly payment, As, for a step amount of G=$20 a month, starting with zero after the first month, for a period of 5 years (n=60).
The value of As can be obtained from a specialized formula for step-payments,
$As=\frac{G((1+i)^{n}-i*n-1)}{i(1+i)^{n}-i}$
Substitute values, G=20,i=0.05/12,n=60
$As=\frac{20((1+.05/12)^{60}-(.05/12)*60-1)}{(.05/12)(1+.05/12)^{60}-(.05/60)}$
=565.0847

B. Principal, Pb, for a uniform monthly payment of A a month
The principal,Pb can be found from the basic amortizing formula to be
$Pb=\frac{A((1+i)^{n}-1)}{i(1+i)^{n}}$
We have
Equivalent uniform monthly payment
=500+equivalent uniform payment step amounts
=500+565.0847
=1065.0847
substituting values, A=1065.0847,i=.05/12,n=60
$=\frac{1065.0847((1+.05/12)^{60}-1)}{(.05/12)(1+.05/12)^{60}}$
=56439.591
check: average monthly payment = 1100
duration: 60 months
total amount paid = 60*1100=66000
average annual interest=((66000-56439)/56439-1)/5=3.3% (~ 5%/2) ok.

Amount borrowed, P=56439.591

Step 2: Future value of loan at the end of the 40th month.
This can be found by the compound interest formula
F=P(1+i)^n=56439.591(1+0.05/12)^40=66652.416

Step 3: Future value of payments
first we need to find the equivalent monthly payment of the step payments, using the same formula as in step 1, but with n=40
$A=\frac{G((1+i)^{n}-i*n-1)}{i(1+i)^{n}-i}$
$=\frac{20((1+0.05/12)^{40}-(0.05/12)*40-1)}{(0.05/12)(1+0.05/12)^{40}-(0.05/12)}$
=378.924
This should be added to the constant payment of $500 a month to give
A=500+378.924=878.924
Future value of monthly payment of 878.924
$F=\frac{A((1+i)^{n}-1)}{i}$
Substitute values, A=878.924, i=0.05/12, n=40
$=\frac{878.924((1+0.05/12)^{40}-1)}{0.05/12}$
=38170.213

Step 4: Outstanding balance right after the 40th payment
=future value of loan - future value of payments
=66652.416-38170.213
=28482.20

Answer: Outstanding balance after the 40th payment is $28482.20

7 0

3 years ago

During 2017, Kate Holmes Co.'s first year of operations, the company reports pretax financial income at $250,000. Holmes's enact

r-ruslan [8.4K]

Answer:

a. $224,000

c. Journal Entry

Explanation:

a. Taxable income for 2017 = Pretax financial income - Temporary sales - Depreciation + Unearned rent

= $250,000 - $96,000 - $30,000 + $100,000

= $224,000

c. Journal Entry

Income tax expenses Dr, $111,200

($224,000 × 45%) + ($50,400 - $40,000)

Deferred tax assets Dr, $40,000

To income tax payable $100,800

($224,000 × 45%)

To Deferred tax liability $50,400

For computing deferred tax

Temporary differences Future taxable Tax rate (Assets) Liability

Installment sales $96,000 40% $38,400

Depreciation rent $30,000 40% $12,000

Unearned rent ($100,000) 40% ($40,000)

Totals $26,000 ($40,000) ($50,400)

6 0

4 years ago

A cost that remains unchanged in total despite variations in volume of activity within a relevant range is a

4vir4ik [10]

A cost that remains unchanged in total despite variations in the volume of activity within a relevant range is a fixed cost. The fixed cost is a type of cost behavior which remains unchanged regardless of the unit or activity changes in a production process<span>. There are four types of cost behavior, which are the fixed cost, the variable cost, the mixed cost, and the step cost.</span>

8 0

3 years ago

Read 2 more answers

As the roman government became more efficient, it took on more functions. to pay for these services, rome ________.

Vanyuwa [196]

The answer to this question is <span>increased taxes on farmers who lived outside of Italy
Larger government will always result in larger government spending (which will led into a higher amount of tax that must be paid). Since roman do not want its people to turn on them due to the increase in tax, Roman government decided to take it from the people outside their empire.

</span>

3 0

3 years ago

Read 2 more answers

A premium bond that pays $60 in interest annually matures in seven years. The bond was originally issued three years ago at par.

Art [367]

Answer:

D.The yield-to-maturity is less than the coupon rate.

Explanation:

Whenever the yield to maturity is less than the bond's coupon rate, bond market value is greater than par value ( premium bond), these applies just as the question states that the premium bond pays $60 in interest annually in seven years and the bond was issued originally 3 years ago at par

in other cases when a bond's coupon rate is less than its yield to maturity, then the bond is selling at a discount and when a bond's coupon rate is equal to its yield to maturity. the bond is selling at par.

4 0

3 years ago