Answer:
The introductory APR is the interest rate that the loan or credit card starts out at..(usually a promotional tool)and the standard rate is what the rate normally is.. the set rate
Explanation:
Answer:
Dr Mohan account 627
Cr Sales 627
Explanation:
Preparation of Journal entry
If the amount of RS. 600 is the goods costing that was supplied to mohan in which the issued invoice is 10% above cost with a 5% discounts the First step will be to calculate the Invoice price.
Calculation of the invoice price
Invoice price=[600+10%*600)+[5%*(600+10%*600)]
Invoice price=(600+60)-[5%*(600+60)]
Invoice price=660-(5%*660)
Invoice price=660-33
Invoice price=627
Now let prepare the Journal entry
Dr Mohan account 627
Cr Sales 627
(Being to record good sold to Mohan)
Answer:
Multiplier effect in the 4th round = 3.58
Explanation:
A change in aggregate demand can create a much greater impact in the equilibrium national income. This is known as the multiplier effect. This occurs when injections of new demand for goods and services into the circular flow of income creates further rounds of spending. For example, if the government spending was on building new affordable houses then the need for housing materials will create demand for wood, cement and other housing supplies. Thus, these businesses will see a rise in sales. Whilst they benefit through profits, their employees would benefit from wages and salaries. As their income rises, they will spend it in the economy, and so will the businesses from their profits. This additional rounds of spending is the multiplier effect.
If a 100 increase creates 33 for the second round, it is 33% (33/100 x 100) i.e. 100 x 33% = 33
This is proven since 33 x 33% = 10.89 in the third round.
Hence, the multiplier effect in the forth round = 10.89 x 33% = 3.58
Answer:
d. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan
Explanation:
interests paid to debt holders = $13,500,000 x 10% = $1,350,000
generally, interest revenue is taxed as ordinary revenue = corporate income tax rate (if debt holder is a business) or personal income tax (if debt holder is an individual).
under the first plan, debt holders get nothing because there is no outstanding debt since the company is an all equity firm.
under the second plan, if the personal tax rate on interest income is 55%, which is really high, the debt holders will earn $1,350,000 x (1 - 55%) = $607,500
