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dsp73
3 years ago
7

Evaluate the following​ statement: ​"Saving money is not lending. How can it​ be? When I save my​ money, I put it in a bank. I​

don't loan it out to someone​ else." The statement is A. correct. Depositing money in a bank is​ borrowing, not saving. B. correct. Depositing money in a bank is neither saving nor borrowing. C. incorrect. The supply of loanable funds is determined by household saving. D. incorrect. The supply of loanable funds is determined by​ firms' willingness to borrow.
Business
1 answer:
salantis [7]3 years ago
3 0

Answer:

The correct answer is option C.

Explanation:

When we save we deposit it in  the bank and do not loan it out directly. But the bank keeps a certain portion of it and lends out the rest to those who need credit. So, the savings that we deposit in the bank become the basis of credit creation.

That is why the statement about saving and lending given in the question is incorrect.

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Western Union is in the business of providing a medium for international money transfers. Through the services of Western Union,
tatiyna

Answer: core service

                                                 

Explanation: In simple words, core service refers to the service which are of highly value and importance to the user or provider or both.

These services are considered be essential for smooth operations of an economy or the organisation as the case may be.

In the given case, Western union has the business of transferring payments internationally. Hence we can conclude that they are providing the core service of their business.

5 0
3 years ago
What is the richest state?
Ivanshal [37]

Colorado not even kidding

8 0
3 years ago
Gene is looking for a loan so that he can buy a car. There are a few different banks where he can apply for a loan. What should
ElenaW [278]

Answer:

The Answer To This Question is B. a good credit score.

Explanation:

8 0
2 years ago
Universal Laser, Inc., just paid a dividend of $3.10 on its stock. The growth rate in dividends is expected to be a constant 6 p
Vadim26 [7]

Answer:

Ans. The current price of the stock is $56.82

Explanation:

Hi, well, the problem here is that we have different discount rates, in other words the required rate of return for the stock changes several times, therefore we are going to break this problem in 3 parts, or bring to present value all the cash flows in 3 steps. Let´s start with the value of the dividends.

We have to use the following formula.

Dn=D_{(n-1)} *(1+g)

Where, D(n-1) is last dividend and Dn is the dividend that we are looking for, for example, D1 = 3.10*(1+0.06)=3.29, D2=3.29*(1+0.06)=3.48, and so forth. The amount to pay on dividends per share is,

D1=3.29; D2=3.48; D3=3.69; D4=3.91; D5=4.15; D6=4.40; D(7)=4.66

Since the first 3 years are to be discounted at a 15%, this is how the formula should look like.

PV(1)=\frac{D1}{(1+r(1))^{1} } +\frac{D2}{(1+r(1))^{2} } +\frac{D3}{(1+r(1))^{3} }

PV(1)=\frac{3.29}{(1+0.15)^{1} } +\frac{3.48}{(1+0.15)^{2} } +\frac{3.69}{(1+0.15)^{3} }=7.92

Now, for the second part, we have to bring all cash flows to year 3 at r(2)=13% and then bring it to present value at r(1)=15%. This is because we have 2 different discount rates, this is as follows.

PV(2)=(\frac{D4}{(1+r(2))^{1} } +\frac{D5}{(1+r(2))^{2} } +\frac{D6}{(1+r(2))^{3} })*\frac{1}{((1+r(1)^{3} }

PV(2)=(\frac{3.91}{(1+0.13)^{1} } +\frac{4.15}{(1+0.13)^{2} } +\frac{4.40}{(1+0.13)^{3} })*\frac{1}{(1+0.15)^{3} } =6.42

Finally, we need to bring all the future cash flows from year 7 and beyond, notice that we need to use the return rate r(3) to bring everything to year 6, then we have to bring it to year 3 and then to present value, everything as follows.

PV(3)=(\frac{D7}{(r(3)-g)} )*(\frac{1}{(1+r(2))^{3} } )*(\frac{1}{(1+r(1))^{3} } )

PV(3)=(\frac{4.66}{(0.11-0.06)} )*(\frac{1}{(1+0.13)^{3} } )*(\frac{1}{(1+0.15)^{3} } )=42.48

So, the price of the stock is PV(1) + PV(2) + PV(3), or:

Price=7.92+6.42+42.48=56.82

Price= $56.82/share

Best of luck.

3 0
3 years ago
On December 1, 2016, Fine Dining Products borrowed $84,000 on a 12%, five-year note with annual installment payments of $16,800
kenny6666 [7]

Answer:

$16,800

Explanation:

The amount of the note payable as the current position of long term notes payable on the  balance sheet as of December 31, 2016 can be calculated by just dividing the principal amount by the number of periods it has been borrowed for

Calculation: 84000/5 = $16,800

3 0
3 years ago
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