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Kobotan [32]
3 years ago
5

If mega corp. borrows $9,000 and agrees to pay the lender $10,500 in one year, the annual interest rate on this loan is approxim

ately:
Business
1 answer:
kap26 [50]3 years ago
5 0
In simple interest, the interest rate is
i=(10500-9000)/9000=16.67%

In compound interest, compounded monthly,
10500=9000(1+i/12)^12
=>
APR=12(10500/9000)^(1/12)-1
=11.155%
(effective interest is still 16.67%)
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Answer: 3.83 years

Explanation:

The Discounted Payback period is used to determine how long it would take a project to payback the investment made in it given required return adjusted cashflows.

Year 1.

= 17,000 / ( 1 + 11.4%)

= $15,260

Year 2

= 20,000/ 1.114²

= $16,116

Year 3

= 27,000/1.114³

= $19,530

Year 4

= 30,000/1.114⁴

= $19,480

Investment Balance up to year 3

= -67,000 + 15,260 + 16,116 + 19,530

= -$16,904

The amount left is smaller than the discounted Cashflow for Year 4 so the Investment will be paid back in year 4.

= 16,904/19,480

= 0.83

0.83 of year 4 will be taken to pay off Investment.

In total;

= 3 complete years + 0.83 in 4th year

= 3.83 years.

4 0
3 years ago
If in the short run, firms in monopolistic competition _________, new firms will enter the market.
alukav5142 [94]

If in the short run, firms in monopolistic competition make an economic profit, new firms will enter the market.

A firm is a for-profit business organization—such as a company, limited liability company (LLC), or partnership—that provides skilled services. Most companies have only 1 location.

Companies during a monopolistic competition build economic profits within the short run, however within the long-standing time, they create zero economic profit. The latter is additionally a result of the liberty of entry and exit within the trade. Restaurants, hair salons, home items, and clothing are examples of industries with monopolistic competition.

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7 0
2 years ago
Fill in the missing words: A leading chocolate company recently announced that it has succeeded in creating red chocolate. The c
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The company <u>says</u> that no food coloring was involved. Instead, they used a <u>special type </u>of cacao bean and a unique manufacturing process.

<h3>What is a manufacturing process?</h3>

This involves the process of turning raw materials into finished goods with the help of tools, human labor, machinery etc.

In this context, the complete sentence is the company <u>says</u> that no food coloring was involved. Instead, they used a <u>special type </u>of cacao bean and a unique manufacturing process.

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5 0
2 years ago
Q 1.1: An owner who wants to have limited liability should form which type of business enterprise?
ycow [4]

Answer:

A corporation                                      

Explanation:

A business is an agency–typically a group of individuals or a firm–allowed by the government to operate as a single body (a legal entity) and recognized as being for other functions of law.

Early constituted institutions were created by charter (i.e. through an arbitrary act issued by a sovereign or enacted by a statute or house of commons).

Corporations come in various forms but are typically separated by the statute of authority in which they are subcontracted on the grounds of two dimensions: that they are willing to issue securities or if they are founded to turn a profit.

6 0
4 years ago
Slow​ 'n Steady,​ Inc., has a stock price of $ 34​, will pay a dividend next year of $ 3.10​, and has expected dividend growth o
erica [24]

Answer:

10.92%

Explanation:

The formula and the computation of the estimated cost of equity capital is shown below:

Stock price = Next year dividend ÷ (cost of equity - expected dividend growth rate)

We assume the cost of equity be X

$34 = $3.10  ÷ (cost of equity - 1.8%)

$34 X - $34 × 1.8X = $3.10

After solving this,

The cost of equity would be 10.92%

3 0
3 years ago
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