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Olenka [21]
3 years ago
5

An Empirical Bargaining Model with Digit Bias – A Study on Auto Loan Monthly Payments

Business
1 answer:
dedylja [7]3 years ago
3 0

Answer:

This study was carried on by Jiang, Zhenling, during the first semester of 2019 and it involved more than 35 million auto loans in the US. The author determined that monthly payments carrying a $9 ending digit, e.g. $199, had a highest interest rate charged. While those monthly payments carrying a $0 ending digit, e.g. $200, had the lowest interest rate charged. African American and Latin consumers were the most negatively affected groups by the higher interest rates.

The study showed that an effective bargaining tactic would decrease total payments significantly. This research also includes a lot of other information regarding the total economic effects of ending digit bias.

Explanation:

I personally guess that many car sellers and auto loans institutions tempt both African American and Latin consumers by using apparently lower monthly payments (psychologically we all consider $199 to be much cheaper than $200) in order to charge higher interest rates. They also probably offer longer term loans, e.g. 5-6 year loans instead of 3-4 year loans.

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Sonny's Super Market has installed a self-service checkout counter, and wishes to understand how this has affected customer serv
valina [46]

Answer:

The Expected time a customer spends in the system is 4

Explanation:

According to the given data we have the following:

Arrival rate A = 1 every other minute = 30/hour or (30/60) per minute

Service rate S = 84 seconds = 60×60/84= 42.86 customers per hour

System utilization factor P = A/S = 30/42.86 = 0.699

Length of the system L = P/(1-P) = 0.699/(1-0.699) = 2.322

Therefore, Expected time a customer spends in the system = L/A = 2.322/(30/60) = 4.644=4

5 0
3 years ago
Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $4
Savatey [412]

Answer:

$828.36

Explanation:

As for the information provided,

The value = $1,000

Life = 20 years, since interest is semi annual, effective period = 20 \times \frac{12}{6} = 40 periods.

Semi annual interest = $40

Annual interest = 10%, effective interest rate = 5%

Future Value Interest rate = $40 \times (\frac{1}{(1+0.05)^1} +\frac{1}{(1+0.05)^2} +\frac{1}{(1+0.05)^3} +\frac{1}{(1+0.05)^4} +\frac{1}{(1+0.05)^5} +\frac{1}{(1+0.05)^6} +\frac{1}{(1+0.05)^7} +.................. + \frac{1}{(1+0.05)^4^0} )

= $40 \times 17.159 = $686.36

Future Value of Principal = $1,000 \times \frac{1}{(1 + 0.05)^4^0}

= $1,000 \times 0.142 = $142

Thus, current price of bond = $686.36 + $142 = $828.36

5 0
3 years ago
Let A equal the reported inventory value if the lower-of-cost-or-market rule is applied to individual items of inventory while B
Lera25 [3.4K]

Answer:

The correct answer is A will always be equal to or less than B.

Explanation:

In general terms, inventory is valued in terms of cost. But there must be a deviation from the cost basis of the inventory valuation and it must be reduced below cost when the utility of the goods has decreased and its sale product or item value will be less than its cost.

The decrease in the value of inventory below cost can be due to different causes, such as physical deterioration, obsolescence, a drop in the price level, etc. In these situations, the inventory is recorded at its market value. The difference in value (cost-to-market value) is recognized as a loss for the current period. It should be understood that the market value of the inventory must be estimated since the inventory has in fact not been sold. As a general rule, the concept of market value is used in terms of the current replacement cost of inventory, that is, what it will currently cost to purchase or manufacture the item.

5 0
2 years ago
How JSE reported the negative impact of the coronavirus on the economic conditions of South Africa
andrew-mc [135]

Answer:

Don't know bro soooooooooory

Explanation:

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4 0
3 years ago
Open the pt activity. perform the tasks in the activity instructions and then answer the question.which interfaces in each route
Tomtit [17]
<span>R1: G0/0 and S0/0/0
R2: G0/1 and S0/0/0

R1>enable
R1# show ip int brief
Interface IP-Address OK? Method Status Protocol
GigabitEthernet0/0 192.168.20.1 YES manual up up
GigabitEthernet0/1 192.168.30.1 YES manual administratively down down
Serial0/0/0 209.165.200.225 YES manual up up
Serial0/0/1 unassigned YES unset administratively down down
Vlan1 unassigned YES unset administratively down down

R2>enable
R2#show ip int brief
Interface IP-Address OK? Method Status Protocol
GigabitEthernet0/0 10.1.2.1 YES manual administratively down down
GigabitEthernet0/1 10.1.3.1 YES manual up up
Serial0/0/0 209.165.200.226 YES manual up up
Serial0/0/1 unassigned YES unset administratively down down
Vlan1 unassigned YES unset administratively down down</span>
4 0
3 years ago
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