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Rom4ik [11]
2 years ago
10

After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exc

eed the future value based on simple interest.
a. True
b. False

The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
a. True
b. False
Business
1 answer:
kari74 [83]2 years ago
3 0

Answer: 1. False

2. True

Explanation:

1. Compound Interest allows an investor to earn money on the interest that has already accrued to the investment instead of just on the original investment like Simple interest. For this reason, the future value of compound interest will always be larger than simple interest for the simple reason that Compound interest is being charged on an amount larger than the amount being used for Simpler interest.

2. The process of compound interest does indeed allow a depositor/ investor to earn interest on any interest earned in prior periods. For instance, if the interest rate on a $500 saving is 10% per annum and it is using Compound interest, in the first year the interest earned will be,

= 10% * 500

= $50

In the second year the interest earned will be,

= 10% * 500 + the previous year interest

= 10% * 550

= $55

Notice how the interest has increased.

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ordan Industries declared a $0.90 per share cash dividend. The company has 180,000 shares authorized, 61,000 shares issued, and
Sophie [7]

Answer:

Dividend = 58,000 * $0.90

Dividend = $52,200

Date   Account titles and Explanation      Debit       Credit

          Dividend declared                            $52,200

                 Dividend payable                                       $52,200

           (To record the dividend declaration)

6 0
2 years ago
You are a financial manager. your assistant tells you that there will be a cash flow gap next month, meaning that cash outflows
sashaice [31]
The answer is greater than cash inflows. The explanation behind this is cash flow gaps happen when cash outflows are greater than cash inflows. Cash flow budgets assist financial managers determine whether the business needs to seek outside sources of funds beyond sales to manage projected cash shortages.
3 0
3 years ago
There are many food carts near Mark’s university. Mark and his friends regularly buy hot dogs from Jeff’s cart. Recently, Andrea
garik1379 [7]
Since there now is a second store, the customers will need to be shared. This means that there are less customers in Jeff's business. Therefore the answer is D: demand for his hotdogs will decrease.
4 0
2 years ago
Sharon purchases two products, X and Y, with a given fixed budget. The marginal utility she receives from the last unit of X she
Elanso [62]

Answer:

A) is maximizing her total utility from the given fixed budget.

Explanation:

The equal marginal principle refers to the principle in which the consumer would select that combination of goods which maximise its total utility. It could be selected by having marginal utility and its price

And for profit maximization, the marginal utility and the price is equivalent to both the goods.

i.e

\frac{MU_X}{P_X} = \frac{MU_Y}{P_Y}

\frac{60}{2} = \frac{30}{1}

30 = 30

Hence, the correct option is a.

5 0
3 years ago
The term "spreading the financial statements" refers to __________
wolverine [178]

Answer:

The correct answer is letter "B": creating common-size financial statements.

Explanation:

In financial accounting, the phrase <em>"spreading the financial statements"</em> equals recording the common-size financial statement. By this, information is displayed in the Balance Sheet as a percentage of a common base figure. The common-size statement typically uses total sales revenue as the common base.

5 0
2 years ago
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