Answer: a) 0.5%
Explanation:
The real interest rate is simply the nominal interest rate adjusted for inflation.
Real interest rate = Nominal rate - Inflation
= 2.5 - 2
= 0.5%
Answer:
The answer is $901100
Explanation:
The amount that should be reported as land is =purchase price + renovation costs + legal fees + insurance - salvage
= $805000 + $76000+ 10600+17100 - 7600= $901100
The co-operative risk sharing plan is that the person who you are working with can go "out" from the co-operative plan and share with another persons your plan.
Answer:
The candidate has given a FALSE statement.
Explanation:
Production Possibility Frontier is graph representing product combinations, that an economy can produce given resources & technology.
PPF points are based on an assumption that resources & technology are fully efficiently utilised. So, quantity of one good can be increased by reducing quantity of other good - given same resources & technology and hence the inverse (negative) relationship between goods make PPF downward sloping.
Therefore, given negatively sloping PPF & economy at a point on PPF : Production of either good 'Civilian goods' or 'military goods' can be increased by reducing the production of the other good. Given same resources & technology & production on PPF , production of two goods can't be increased simultaneously.
Answer:
$21,964
Explanation:
Present Value = 1200 × cumulative pv factor for year 1 to 4 (9%, 4y) +
Present value = 1200 × 3.2397 + 1236/.06
Present Value = 3887.64 + 20,600 = $21,964 approx.
For the first four years, cash flows can be computed by multiplying $1200 by cumulative present value factor at 9% rate for 4 years.
Fifth year onwards, the cash flows are expected to increase by 3% whereas discounting factor is 9%. So the value 5th year onwards till perpetuity would be increased cash flow for year 5 discounted by excess of present value factor over growth rate (9% - 3 %)