Answer:
The change in the dollar amount of inventory is $200 due to change in the inventory costing method.
Explanation:
The variable cost per unit is $6.00 while the fixed cost per unit is $2.00
Variable cost per unit = $6.00
Absorption cost pet units = $8.00
Total cost under absorption costing = Absorption cost per unit / number of units in ending inventory
Total absorption cost = $8.00 × 100 = $800
Total cost under variable cost = Variable cost per unit × number of units in ending inventory
Total variable cost = $6.00 × 100 = $600
Change in cost = Total absorption cost - Total variable cost
Change in cost = $800 - $600 = $200
Answer: $460 billion, but the effect would be larger if there were an investment accelerator.
Explanation:
If the MPC = 0.75 and there is no investment accelerator or crowding out, then a $115 billion increase in the government expenditures would result in the shift in the aggregate demand curve right by:
= $115 billion ÷ (1 - 0.75)
= $115 billion ÷ 0.25
= $115 billion × 1/0.25
= $115 billion / 0.25
= $460 billion.
Therefore, there'll be a shift in the aggregate demand curve right by $460 billion, but the effect would be larger if there were an investment accelerator
Answer:
The loss of the financial institution is $413,000
Explanation:
Let's say that after 3 years the financial institution will receive:
0.5 * 10% of $10million
= 0.5 * 0.1 * 10000000
= $500,000
Then, they will pay 0.5 * 9% of $10M
= 0.5 * 0.09 * 10000000
= $450,000
Therefore, their immediate loss would be $500000 - $450000
= $50000.
Let's assume that forward rates are realized to value the rest of the swap.
The forward rates = 8% per annum.
Therefore, the remaining cash flows are assumed that floating payment is
0.5*0.08*10000000 =
$400,000
Received net payment would be:
500,000-400,000= $100,000. The total cost of default is therefore the cost of foregoing the following cash flows:
Year 3=$50,000
Year 3.5=$100,000
Year 4 = $100,000
Year 4.5= $100,000
Year 5 = $100,000
Discounting these cash flows to year 3 at 4% per six months, the cost of default would be $413,000
Answer:
15 years
Explanation:
The target accumulated future amount is the future value of the initial investment(present value), hence, using the future value formula provided below we can determine the investment time horizon in years required to accumulate the target amount:
FV=PV*(1+r)^n
FV=$1,200,000
PV=$287,270
r=10%
n=investment period in years=unknown
$1,200,000=$287,270*(1+10%)^n
$1,200,000/$287,270=(1+10%)^n
$1,200,000/$287,270=(1.10)^n
take log of both sides
ln($1,200,000/$287,270)=n ln(1.10)
n=ln($1,200,000/$287,270)/ln(1.10)
n=15.00years
Answer:
Maturity value; Default; Sinking fund provision; Call provision.
Explanation:
Maturity value is the sum payable to an investor toward the finish of a debt instrument's holding period (maturity date).
Sinking fund provisions means a provision in some bond indentures requiring the backer to set cash aside to reimburse bondholders at maturity.
A call provision is a provision on a bond or other fixed-pay instrument that enables the guarantor to repurchase and resign its bonds.
