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4 years ago

A borrower has two alternatives for a loan:

Business

1 answer:

lions [1.4K]4 years ago

8 0

Answer:

The second alternative is the best option for the borrower as it provides the less amount of interest expense.

Explanation:

We solve for the interest expense on each alternative and pick the lowest:

(1) common note.

$Principal \: (1+ r)^{time} = Amount$

Principal 420,000.00

time 0.25

rate 0.04000

$420000 \: (1+ 0.04)^{0.25} = Amount$

Amount 424,138.43

Interest expense: 4,138.43‬

(2) Discounted note:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $420,000.00

time 0.25

rate 0.04000

$\frac{420000}{(1 + 0.04)^{0.25} } = PV$

PV 415,901.9490

THe borrower recieve this amount and then, return 420,000

Interest over time 4,098.05099

You might be interested in

What are the limitations and constraints that this form of business has on the operations of the Green Bay Packers?

vredina [299]

Answer:

Green Bay Packers

The limitations and constraints of a not-for-profit association are:

1. Unlimited liability of the club members: This means that the members could be exposed to personal financial liability arising from their membership of the club. When the club is unable to meet its debt obligations, individual members will be held liable for the remaining debts.

2. An unincorporated association is subject to liquidation at the slightest event. In the event of the members' death, the association will not be able to continue.

3. A unincorporated not-for-profit organization may not be able to attain credibility as much as an incorporated organization. This disadvantage limits its ability to raise external finance.

Explanation:

The Green Bay Packers is a football club under the NFL. It is a not-for-profit association. Therefore, members do not enjoy the benefits arising from limited liability.

5 0

3 years ago

Assuming that the total manufacturing costs are $3,400,000, compute the cost of goods manufactured using the information below.

kirill115 [55]

Answer:

c. $ 3,409,000

Explanation:

Computation of cost of goods manufactured

The cost of goods manufactured is calculated by adjusting the opening and closing work in process balances to the total manufacturing input

Total manufacturing input $ 3,400,000

Add: Opening work in process $ 27,000

Less: Closing work in process $ ( 18,000)

Cost of goods manufactured $ 3,409,000

The cost of goods manufactured is determined by the total of the input and adding the differnce in opening and closing work in process balances.

5 0

3 years ago

Discuss one transaction cost-reduction opportunity that you believe the company has missed.

shutvik [7]

This is the full question

Choose one of the Web sites listed in the previous question and identify three ways the company has reduced its transaction costs by using a Web site to provide information. List these three transaction cost-reduction elements and write a paragraph in which you discuss one transaction cost-reduction opportunity that you believe that company has missed.

Answer:

I visited the Netflix website. I do not own a netflix account. Netflix has the following cost-reduction opporunities on its webpage:

Clear information about the costs of the streaming service.
Clear Frequently Asked Question section explaining about the nature of the service, and the terms of the contract in case you decide to purchase the service.
Very nice visual interface without clutter.

One transaction cost-reduction opportunity that Netflix is missing though is:

Lack of a preview to see what shows and films are available.

4 0

3 years ago

Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent y

Kitty [74]

Answer:

Department 2 has the highest Contribution To Overhead and its dollar amount is $ 260,000

Explanation:

Ultimo Co.

Dept. 1 2 3

Sales $ 1,000,000 $ 400,000 $ 700,000

Cost of Goods Sold 700,000 150,000 300,000

Contribution Margin 300,000 300,000 400,000

Direct Expenses 100,000 40,000 150,000

Indirect Expenses $ 80,000 100,000 20,000

Contribution To Overhead 200,000 260,000 250,000

Contribution To Overhead Calculations

Department 1= Contribution Margin - total direct Expenses

= 300,000-100,000=200,000

Department 2=Contribution Margin - total direct Expenses

=300,000-40,000= 260,000

Department 3=Contribution Margin - total direct Expenses

=400,000-150,000= 250,000

7 0

3 years ago

According to the Level-5 leadership pyramid, a manager turns into an executive who is capable of

Vedmedyk [2.9K]

Answer:

A. Level 5.

Explanation:

The description stands for the top of the pyramid.

The term of the pramyde of leadership along with their definition were created by Jim Collins in his good "Good to Great"

Being:

Level 1 Leadership: Highly Capable Individual

Level 2 Leadership: Contributing Team Member

Level 3 Leadership: Competent Manager

Level 4 Leadership: Effective Leader

Level 5 Leadership: Great Leader

The great leader has all the expertise of the previous but, also a combination of being strong-willed yet humble. It is this combination of will and humility that makes them great. It also sets them apart from all the other levels of leadership.

According to the author those are the lider which attain greatness for teh company

5 0

4 years ago