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Talja [164]
3 years ago
11

Consider the market for loanable funds. Suppose that savers make deposits in savings accounts at banks. Initially, the interest

earned on the savings deposits is taxed at a rate of 20%. If the tax rate on interest earned on savings deposits rises to 25% then the _______ will shift to the _______ causing the equilibrium interest rate to _______.
Business
1 answer:
tiny-mole [99]3 years ago
8 0

Answer:

A: The supply of loanable funds curve

B: left

C: Increase

Explanation:

If the tax rate on interest earned on savings deposits rises to 25% then the <u><em>supply of loanable funds curve</em></u> will shift to the <u><em>left </em></u>causing the equilibrium interest rate to <u><em>slide upwards (or increase). </em></u>

The supply curve for loanable funds slopes upwards from left to right. This means that when interest rates are high, lenders are more willing to lend more funds to investors and businesses. The intersection of the demand and supply curves for loanable funds creates the equilibrium interest rate.

Cheers!

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Oberholser, Inc., has an issue of preferred stock outstanding that pays a dividend of $3.15 every year in perpetuity. If this is
zepelin [54]

The required rate of return is $3.42%

<h3>What is Perpetuity?</h3>

A constant cash flow with indefinite period of time is called perpetuity. In this question a perpetual payment of dividend is being made. so the price of the share is calculated by the formula of perpetuity.

<u>Given:</u>

Present value of perpetuity =  $92 per share

Cash flows = $3.15 every year

<u>Find:</u>

Rate of return can be calculated from the perpetuity formula

Present value of perpetuity = Cash flows / Required rate of return

Present value of perpetuity = Cash flows / Required rate of return

                                        $92 = $3.15 / Required rate of return

Required rate of return = $3.15 / $92

                                       = 0.0342

                                       = $ 3.42%

Therefore the Required return for Oberholser, Inc will be 3.42%.

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brainly.com/question/13941905

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6 0
2 years ago
A company has the following selected account balances: Sales $ 250,000 Sales Discounts 1,500 Sales Returns and Allowances 2,300
Ulleksa [173]

Answer:

$121,200

Explanation:

Calculation to determine the gross profit that would appear on a multiple-step income statement

First step is to determine the Net sales

Sales $ 250,000

Less Sales Discounts ($1,500)

Less Sales Returns and Allowances ($2,300 )

Net sales $246,200

Now let determine the Gross profit using this formula

Gross profit=Net sales-Cost of Goods Sold

Let plug in the formula

Gross profit=$246,200-$125,000

Gross profit=$121,200

Therefore the gross profit that would appear on a multiple-step income statement is $121,200

8 0
3 years ago
Sunland Company is considering two capital investment proposals. Estimates regarding each project are provided below. Project So
san4es73 [151]

Answer:

a. 4 years and 4.22 years

b.  -$31,350 and $27,615

c. Project Nuts

Explanation:

a. The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

For project soup, it would be

= $600,000 ÷ $150,000

= 4 years

For project nuts, it would be

= $900,000 ÷ $213,000

= 4.22 years

b. The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

For project soup, it would be

= $568,650 - $600,000

= -$31,350

The present value is computed below:

= Annual cash flow × pvifa for 5 years at 10%

= $150,000 × 3.791

= $568,650

For project nuts, it would be

= $927,615 - $900,000

= $27,615

The present value is computed below:

= Annual cash flow × pvifa for 6 years at 10%

= $213,000 × 4.355

= $927,615

Kindly refer pvifa table

c. The project Nuts should be accepted as it has positive net present value.

7 0
3 years ago
Novak Corp. has 7400 shares of 6%, $50 par value, cumulative preferred stock and 148000 shares of $1 par value common stock outs
wlad13 [49]

Answer:

The dividends received by the preferred stockholders in 2020 are $30400.

Explanation:

The cumulative preferred stock is the form of preferred stock that accumulates or accrues dividends in case the company does not pay or partially pay dividends to preferred stock in a particular year. This means that the dividends are accrued and the company will need to pay these dividends first in the future whenever it declares dividends.

The total dividends per year on preferred stock is,

Preferred Stock dividends = 50 * 0.06 * 7400 = $22200 per year

The preferred stock dividend that was accrued at the end of 2019 after the dividend payment of $14000 is,

Accrued dividends - Preferred stock = 22200 - 14000 = $8200

In 2020 the company will need to pay this accrued dividend along with the dividend for 2020 on preferred stock. Thus, in 2020 the preferred stock holders will receive dividends of,

Preferred stock dividend to be paid in 2020 = 8200  +  22200  = $30400

8 0
3 years ago
The real GDP of Country A grew by only 1% from 2011 to 2013, while the real GDP of Country B grew by 5% during that same time sp
Ray Of Light [21]

Correct answers: Country B will eventually have a higher real GDP than country A if the economy of each county continues to grow this way.

Incorrect answers: Country A has a high real GDP. Country A has a modestly high quality of life. Country A’s economy has been in a period of contraction. Country B has a very high quality of life. #Smokeweedeveryday

6 0
3 years ago
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