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3 years ago

How do banks benefit of giving people loans

2 answers:

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It all ties back to the fundamental way banks make money: Banks use depositors' money to make loans. The amount of interest the banks collect on the loans is greater than the amount of interest they pay to customers with savings accounts—and the difference is the banks' profit. I agree with the other person it was on the internet. Hope this helped :)

Kitty [74]3 years ago

5 0

Answer: It all ties back to the fundamental way banks make money: Banks use depositors' money to make loans. The amount of interest the banks collect on the loans is greater than the amount of interest they pay to customers with savings accounts—and the difference is the banks' profit.

Explanation: Hopefully this helped!

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McDonald's major distribution partner, The Martin-Brower Company, needs at least $1 million to build a new warehouse in Medicine

aleksley [76]

Answer:

No it wont have enough money to build a warehouse in two years.

Explanation:

Firstly we are given that the warehouse is $1 million so the company needs to save this amount of money in two years time.

We know that the company has invested $500000 to date therefore we need to calculate if this $50000 per quarter investment will cover the the other portion for $500000 to meet the warehouse cost of $1 million so we will use the future value annuity formula to calculate this which is :

Fv = C[((1+i)^n -1)/i]

where Fv will be the future value after two years of the $50000 investment

C is the periodic payment of $50000

i is the interest rate per period which is 6% per quarter

n is the number of periods the payment is done here it is 4 x 2years= 8 periods / investments of $50000 that will be done.

thereafter we substitute on the above formula:

Fv = 50000[((1+6%)^8 - 1)/6%]

Fv = $494873.40

then we combine this amount to $500000 to see if it reaches $1 million

$494873.40+ $500000 = $994873.40 which is close to the warehouse cost of $1 million but it does not reach it so the company wont have enough money to purchase the warehouse.

5 0

3 years ago

Verify why the farmers' credit union chose to increase Farm B's line of credit but not Farm A's in the following scenario:

Shkiper50 [21]

Answer:

see below

Explanation:

he farmers must have considered the ability to repay back loans when making the decision. The ability of a business to meet its current obligations is expressed by the current ratio.

The current ratio or working capital ratio communicates a firm's ability to repay debts as they become due. The higher the ratio, the better.

the current ratio is calculated as current assets/current liabilities

For Firm A,

current ratio =$150,000/ $125,000.

=1.2

For Firm B,

current ratio =$100,000/$75,000

=1.333

Firm B has a better current ratio than Firm A. Firm B is in a better position to repay loans compared to Firm A.

5 0

3 years ago

You are the newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing

OverLord2011 [107]

Answer:

The correct answer is:

increase prices (B)

Explanation:

Price elasticity of demand (PED) is the measure of how the quantity of goods demanded change, as the selling of the good change. Mathematically, it is represented as the percentage change in the quantity of good demanded divided by the percentage change in the price of the good.

Price elasticity of demand can be; greater than one, less than one, equal to one, zero, or infinite.

If price elasticity of demand is less than one, it is said to be elastic, meaning that the demand for a product is sensitive to the change in price, and an increase in price will cause a reduction in revenue by the seller, while a reduction in price results to an increase in the quantity demanded, hence increasing revenue. For example, an increase in the price of chicken, may cause consumers to go for turkey instead, leading to a reduction in the demand for chicken.

A price elasticity of demand of less than one is termed inelastic, and an increase in the price of the product does not cause a significant drop in the quantity of the goods demanded, and this is the case seen in our example, so increasing the price of the good will increase the revenue.

When PED is equal to one, it is said to be unit elastic, and it means that the quantity demanded varies proportionately with change in price. For example if the price of a product increases by 50%, and 50% of its regular buyers switch to another brand.

A price elasticity of demand of zero is said to be perfectly inelastic, and it means that the demand for a good does not change at all, irrespective of the change in price.

Finally, a PED equal to infinity (∞) is said to be perfectly elastic, and consumers will only buy the product at only one price and nothing more.

5 0

3 years ago

Consider a five-person family consisting of a father, mother, twin 16-year-old sons attending high school, and an 85-year- old g

DerKrebs [107]

The correct answer to this open question is the following.

Unfortunately, you forgot to attach the options for this question.

However, trying to help, we can say the following.

In 2017, before the change in the tax laws, the approximate amount of money that the parents would be able to deduct from their adjusted gross income based on their personal exemptions was $16,000.-

In the federal government taxation regulations periodically changes and adjust to consider new circumstances. That is why the IRS continually makes adjustments.

In December 2017, Congress passed the Jobs Act and Tax Cuts, modifying credits work and tax deductions of American families. Among the most important changes that started to be valid in 2018 was the removal of exemptions. That is why, before this removal of exemptions was valid, the head of the family could get personal exceptions for qualified family members such as the wife and children, or any other dependent.

8 0

3 years ago

Linda and Chet decide to start their own landscaping business. Their state requires them to draw up an agreement listing how muc

mestny [16]

Answer:

The correct answer is letter "A": Articles of partnership.

Explanation:

The Articles of partnership is a legal document requested when forming a Limited Liability Partnership (LLP) where the partners' contribution, functions, percentage of ownership of the partnership, liabilities, distribution of profits and losses, and means of dissolution are specified.

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3 years ago