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Minchanka [31]
3 years ago
6

Suppose that lenders want to receive a real rate of interest of 5 percent and that they expect inflation to remain steady at 2 p

ercent in the coming years. Based on this, lenders should charge a nominal interest rate of ___________
Business
1 answer:
Helga [31]3 years ago
7 0

Answer:

7%

Explanation:

nominal interest rate = real interest rate + expected inflation rate

nominal interest rate = 5% + 2% = 7%

Usually the nominal interest rate has four major components:

  1. real interest rate: the net interest rate received by a lender or an investor
  2. inflation rate: the general rise in the prices of goods and services, as inflation increases, the purchasing power of a currency decreases
  3. liquidity risk premium: usually collateralized loans include a liquidity risk premium since not all assets can be easily converted to cash.
  4. credit risk: possibility of the borrower defaulting the loan

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Ace Company purchased a machine valued at $328,000 on August 1. The equipment has an estimated useful life of six years or 2.5 m
nlexa [21]

Answer:

A. $53,167

Explanation:

The computation of the depreciation expense under the straight-line method is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($328,000 - $9,000) ÷ (6 years)

= ($319,000) ÷ (6 years)  

= $53,167

In this method, the depreciation is same for all the remaining useful life.

The estimated useful life in units is used in units of production method. Hence, it is ignored here.

6 0
4 years ago
Why would a company choose to outsource? what are the advantages and disadvantages to outsourcing?
maxonik [38]
A company would likely outsource service or manufacturing to reduce service or production costs; this is why a majority of consumer products are made in east Asian countries, as they have very low manufacturing and labor costs. However, these cheap goods and services tend to have lower quality and/or performance when compared to their domestic, higher-priced counterparts. In short, outsourcing is generally used to cut costs, but the quality of goods or services typically suffers to some degree. 
8 0
4 years ago
Read 2 more answers
Cesar claims he found a definite way to save money, "Buy direct from the manufacturer. Any time intermediaries get involved, you
Anni [7]

Answer:

Explanation:

Great question, intermediaries are sometimes necessary since they provide a service in which you might not be able to get the product if their service wasn't provided. That being said we can say that Caesar's claim is not valid in many cases. Intermediaries tend to add an additional cost to a certain product, but like mentioned above they are providing an essential value. In many cases the value they create more than offsets the costs they add. Therefore the validity of Caesar's claim is dependent on the intermediaries provided value.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

3 0
3 years ago
Suppose the government passes a law eliminating holidays and, as a result the production of goods and services increases because
dedylja [7]

Answer:

The correct answer is GDP would definitely increase because GDP excludes leisure.

Explanation:

The GDP does not measure the level of development of a country, nor does it measure the quality or level of its educational system or its health. Come on, that the quality of life in general is not measurable by GDP, although it is true that countries with a higher GDP per capita can afford better health or education services, as well as better infrastructure and services in general.

It does not measure the state of the environment or the damage caused to it or natural resources by the economic activity carried out. In other words, GDP does not report externalities, that is, it does not reflect the total social benefits and costs derived from economic activity.

GDP does not measure the quality of the goods and services produced. The GDP figures are only numbers that do not take into account exactly what is being produced or what is the quality of what is produced. This prevents, for example, comparing production between different eras. Does a computer add up to GDP now than in the 80s? The answer is no. Does a country of services add up to an oil exporter? The answer is also no.

It ignores the value of elements that contribute to maintaining the level of well-being of the population, such as leisure or freedom. In freer countries or in which its inhabitants have more leisure time and better options in which to invest it, well-being is much greater.

6 0
3 years ago
Jerry quarry sells building stone in a perfectly competitive market. At a its current level of building stone production, jerry
GaryK [48]

Answer:

increase its production of building stone

Explanation:

4 0
3 years ago
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