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Burka [1]
3 years ago
15

BestBank's Visa credit card discloses an A.P.R. of "Prime Rate + 5.74% to Prime Rate + 22.74%." If the Prime Rate increases from

3.25% to 4.25%, what impact would this have on A.P.Rs for cardholders?
a. No change since credit card A.P.Rs don't change as long as your account is open
b. Increase in A.P.R by 1%
c. Decrease in A.P.R. by 1%
d. Increase in A.P.R. by 22.74%
Business
1 answer:
Brrunno [24]3 years ago
4 0

The prime rate is the base rate for any financial transaction. The prime rate is considered for each type of lending instruments by the bank. bank add a margin % over the prime rate and offer loan/instrument at the increased rate.

In the given case, the BestBank's Visa credit card discloses an A.P.R. of "Prime Rate + 5.74% to Prime Rate + 22.74%, which means the A.P.R is calculated on the basis of Prime rate and any change in prime rate will directly affect the A.P.R.

The Prime Rate has increased from 3.25% to 4.25%, it means the increase of 1%. Hence the A.P.R. Shall also increase by 1%.

Hence the correct answer is:

b. Increase in A.P.R by 1%

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Which example best describes reducing risky behavior?
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A manager should attempt to maximize the value of the firm by changing the capital structure if and only if the value of the fir
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Answer:

Option a                                

Explanation:

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6 0
3 years ago
What are the four main types of access proposed by Andersen (1997)?
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<u>Explanation:</u>

They are:

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A

4 0
3 years ago
Momber's Flooring Company
alex41 [277]

Answer:

Net Cash Flows from Operating Activities for 2012 will be $2,082

Explanation:

Prepare the Cash flow from Operating Activities Section to determine the Net Cash Flows from Operating Activities.

Cash flow from Operating Activities :

Net income                                                                       3,382

Adjustment for Non-Cash items :

Depreciation 810

Adjustment for Changes in Working Capital items :

Decrease in Accounts Receivables                                 200

Increase in Inventory                                                       -500

Decrease in  Notes payable                                            -400

Decrease in Accounts payable                                     -1,000

Increase in Accruals                                                          400

Net Cash Flows from Operating Activities                    2,082

Conclusion :

Net Cash Flows from Operating Activities for 2012 will be $2,082

8 0
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