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VARVARA [1.3K]
3 years ago
12

Which of the following statements is correct? A. The Federal funds rate is the rate banks charge their most creditworthy custome

rs. B. The prime rate involves longer, more risky loans than the Federal funds rate. C. The discount rate is the rate banks charge one another on overnight loans. D. The Federal funds rate is derived based on the prime rate.
Business
1 answer:
SIZIF [17.4K]3 years ago
6 0

Answer: Option (B) is correct.

Explanation:

Correct Option: The prime rate involves longer, more risky loans than the Federal funds rate.

It was seen that prime rate is higher than the federal funds rate because it involves more risk, longer term loans than one day or overnight loans occurred between the commercial banks.

Both federal rate and prime rate keep tracking the each others rate.

Remaining all the statements are not correct in the question.

You might be interested in
Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha
ExtremeBDS [4]

Answer:

15.79%

Explanation:

The computation of the return on investment is shown below:

Return on investment  = Operating Income ÷  New operating asset base

where,

Operating income is $60,000

And, the new operating asset is

= $500,000 - $120,000

= $380,000

So, the return on investment is

= $60,000 ÷ $380,000

= 15.79%

By dividing the operating income from the new operating asset base we can get the return on investment

5 0
3 years ago
Bart's Appliance Center owner Ron Bart feels that his organization has access to a great deal of information generated both insi
leonid [27]

Answer: (C) Marketing information system

Explanation:

The marketing information system is one of the important tool that helps the managers in an organization for making various types of desc ions regarding the development and the promotion of the product.

The marketing information system is basically define as the structure of the method in an organization that helps in the analysis of the data and then represent the information more efficiently.

The information related to the marketing is formally analyzed , stored and also distributed according to the requirement in an organization.

Therefore, Option (C) is correct.  

6 0
3 years ago
Lewis Company sold equipment for $11,000. The equipment originally cost $25,000 in 2014 and $6,000 was spent on a major overhaul
vredina [299]

Answer:

Dr Cash 11,000

Dr Accumulated Depreciation-Equipment 20,000

Equipment 31,000

Explanation:

Preparation of the Journal entry to record the disposition of the equipment

Since we were told that Lewis Company sold

the equipment for the amount of $11,000 in which the Accumulated Depreciation on the equipment to the date of disposal was the amount of $20,000 this means the journal entry to record the disposition of the equipment will be :

Dr Cash 11,000

Dr Accumulated Depreciation-Equipment 20,000

Equipment 31,000

(20,000+11,000)

4 0
3 years ago
Why is it important to review your personal information for accuracy when you receive an invoice?
Sav [38]

When you receive an invoice, it is important to review your personal information for accuracy, the reason behind this is to ensure that the invoice is going to sent you and it is related to you. To make sure that the information you sent or saved is related to you and is reliable, this is done by reviewing your personal information.
8 0
3 years ago
Great Subs Inc., a regional sandwich chain, is considering purchasing a smaller chain, Eastern Pizza, which is currently finance
tatuchka [14]

Answer:

WACC 13.85600%

Explanation:

First we calculate Eastern Pizza CAPM:

Ke= r_f + \beta (r_m-r_f)

risk free = 0.08

market rate = 0.12

premium market = (market rate - risk free) 0.04

beta(non diversifiable risk) = 2

Ke= 0.08 + 2 (0.04)

Ke 0.16000

Then we solve for WACC

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.16000

Equity weight 0.8

Kd 0.08

Debt Weight 0.2

t 0.34

WACC = 0.16(0.8) + 0.08(1-0.34)(0.2)

WACC 13.85600%

The company will use the data on eastern Pizza to evualuate project presented to it. Also, it will  consider the new tax rate to determinate the tax shield.

3 0
3 years ago
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