In the initial year, since I plan to put down $1000 and borrow $4000, then the inflow from the bank will be +$4000.
The timeline from my perspective will be:
Year 0
Cash flow +$4000
Year 1
Cash flow -$1000
Year 2
Cash flow -$1000
Year 3
Cash flow -$1000
Year 4
Cash flow -$1000
The timeline from the bank's perspective will be:
Year 0
Cash flow -$4000
Year 1
Cash flow +$1000
Year 2
Cash flow +$1000
Year 3
Cash flow +$1000
Year 4
Cash flow +$1000
I'm conclusion, it should be noted that the net cash flow for the bank in year 0 will be $-4000. This is the amount that was lent out by the bank.
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Answer: Yes,it is legal and or ethical to allow Tommy to escape his contractual obligations.
Explanation:
A contract is an agreement made between two or more persons which the court of law can enforced. Under the law of contract, one of the essential elements of a valid contract is capacity, which states that a person must be of legal age before such a person can enter into a contract. For example a legal age is 18 years. In a law of contract any contract enter into with a minor is null and void according to the law. The exception to this rule is when a minor enter into a contract for the supply of necessity such as food and clothing. It is evidence that Tommy McCartney is 16 years old as at the time of entering into the contract for the purchase of the car from the store. In this case, by virtue of being a minor he does not have the backing of the law to enter into the contract for the purchase of the car from the store as at the time he does so.
Therefore, based on this legal point ,the contract is voidable.Tommy money must be returned to him because the contract between him and the store is null and void.It is therefore legal to allow Tommy to escape his contractual obligations
Answer:
Seasonal.
Explanation:
A trade discount can be defined as a reduction in the price of goods given by a manufacturer to a wholesaler or retailer when they buy units of goods in larger quantities. This ultimately implies that, a trade discount is a percentage reduction in price given by a manufacturer to a wholesaler or retailer in order to encourage them to buy the goods in larger quantities and thus, increase revenue and profits.
Also, a seasonal discount can be defined as a reduction in the price of goods given during off-peak periods (off-season) in order to encourage customers to purchase a particular product.
Hence, when a firm or store offers a price reduction to customers who buy during off-peak periods throughout the year, we say the firm is giving a seasonal discount.
Answer: The coupon rate is 13%
Explanation:
We would first calculate the Coupon Payment and then later using the coupon payment we would compute the Coupon rate.
PV = + A []
Where,
FV = $1,000
PV = $1,291.31
r = 8%
N = 8 Years
A = Coupon Payment
1291.31 = + A
Solve for A
A = 130.69
The coupon payment is $130
Coupon rate = (Coupon payment / Face value) x 100
= x 100
= 13 %
Answer:
The answer is option A) Diversification merits strong consideration whenever a single-business Is faced with diminishing market opportunities and stagnating sales in its principal business company
Explanation:
Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories. It aims to maximize returns by investing in different areas that would each react differently to the same event.
It's important to diversify among different asset classes. Different assets such as bonds and stocks will not react in the same way to adverse events. A combination of asset classes will reduce your portfolio's sensitivity to market swings. Generally, bond and equity markets move in opposite directions, so if your portfolio is diversified across both areas, unpleasant movements in one will be offset by positive results in another.