1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
navik [9.2K]
3 years ago
5

Why is interest typically paid on a loan? A. to compensate the borrower for borrowing from a specific lender B. to ensure that p

eople do not borrow money without having a good reason C. to compensate the lender for the risk that the loan will not be repaid D. to compensate the lender for temporarily making do without the money that was lent
Business
1 answer:
Svet_ta [14]3 years ago
4 0

Answer:

The correct answer is option D.

Explanation:

An interest rate is an amount charged by a lender on the use of assets. It is expressed as a percentage of the principal. The interest rate is the return on lending for a lender and the cost of borrowing for the borrower.  

Interest is typically paid on a loan to compensate for the opportunity cost of lending money. A lender could invest the money instead of lending and get a higher return from it.  

To compensate for not using the money for an alternative purpose or for temporarily making do without the money that was lent, the borrower pays a certain percentage of principal to the lender.

You might be interested in
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system w
Alona [7]

Answer:

$184.34

Explanation:

The computation of activity rate for the Order Size activity cost pool is shown below:-

The Activity rate for Order size = Estimated order size overhead cost ÷ Total machine hours

= 1,069,190 ÷ 5,800

= $184.34

Therefore for computing the activity rate for the Order Size activity cost pool we simply applied the above formula and ignore all other value.

7 0
3 years ago
Tool Manufacturing has an expected EBIT of $82,000 in perpetuity and a tax rate of 24 percent. The company has $143,500 in outst
Dima020 [189]

Answer:

The value of the firm according to M&M Proposition I with taxes is $513,824.62

Explanation:

Value of firm = [EBIT x (1-Tax) / Equity Cost] + [Debt x Tax rate]

Value of firm = 82000 x (1-24%) / 13% + 143500 x 24%

Value of firm = 62320 / 0.13 + 143500 x 0.24

Value of firm = 479,384.62 + 34,440‬

Value of firm = $513,824.62‬

7 0
3 years ago
Greengage, Inc., a successful nursery, is considering several expansion projects. All of the alternatives promise to produce an
Ilia_Sergeevich [38]

Answer:

A. Project A

B. Project A has lowest Standard Deviation

C. Project D

Explanation:

A.

The higher the range, the more risky the project is. Based on the table, project A has the smallest range, and therefore is the least risky based on range.

B.

The standard deviation is not scale-free, i.e. it is not adjusted for the level of returns. Hence, a project that has the same distribution of returns, but a higher average return, will have a higher standard deviation. But the project is not any more risky. Hence, the standard deviation might not be an appropriate measure of risk.

C.

The Coefficient of Variation (CV) is calculated as follows:

CV = Standard deviation / expected return

Applying this formula, the coefficient of variation for each project is:

Project A: 2.9% / 12.0% = 0.242

Project B: 3.2% / 12.5% = 0.256

Project C: 3.5% / 13.0% = 0.269

Project D: 3.0% / 12.8% = 0.23 4

Based on the coefficient of variation, project D has the lowest coefficient. It means that the project has the lowest risk per unit of return generated, and thus is the best project and should be chosen.

4 0
3 years ago
Tee Time Golf Resort plans to use famous Kauri wood from New Zealand for parts of the interior of the magnificent clubhouse at i
LekaFEV [45]

Answer: C. it's a good time to buy the wood.

Explanation:

$500 = 738NZ dollars, therefore 738 NZ dollar ÷ $500 = 1.476NZ dollar

The current exchange rate is $1 = 1.476NZ dollar

10 foot slab costs $5000, Tee Golf Resort will pay $ 3387.53 ($5000/1.476NZ)

if they import wood from New Zealand. Tee Golf Resort will pay less than $5000 if they import Wood from New Zealand at the current exchange rate. This is a Good time for them to import woods

5 0
3 years ago
How aggressively should TJX expand globally, and where, and when, to maximize the value of the company shareholders?
Anni [7]
Might have to do some personal research idk who's gonna do a whole project for you but googles a wonderful thing
6 0
3 years ago
Other questions:
  • Is it possible that there really was a krait under the sheet?
    9·1 answer
  • George is considering an investment that will pay $3,250 a year for eight years, starting one year from today. What is the maxim
    7·1 answer
  • 4. Identify and discuss the product branding of the product. Describe the brand and symbol or logo it uses. Provide an image of
    9·1 answer
  • Cars made in the United States by an American-owned company are included in______
    15·1 answer
  • 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses
    6·1 answer
  • Ji-woo has a new credit card. She wants to use it for online shopping. What are three things that make this a poor choice
    12·1 answer
  • 1. What are the different account titles used in balance sheet account under current assets?​
    10·2 answers
  • Alex is working on reconciling the balance sheet for his company. He is using a _____, which will ensure that the plan for next
    6·1 answer
  • Is a decline in the value of the real against the us dollar good for embraer, bad for embraer, or a mixed bag? explain your answ
    15·1 answer
  • In insurance terminology, equipment such as tractors, bulldozers, road graders, front-end loaders, and forklifts designed primar
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!