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3 years ago

Why is credit an important part of the economy?

Business

2 answers:

Vinil7 [7]3 years ago

4 0

Answer:

A. It allows people and businesses to pay off expensive purchases

over time.

Explanation:

A credit facility is an arrangement where a buyer obtains goods or services and pays for them over a long time. Credit contrasts cash payment, where the buyer pays make full payment for a product when acquiring it.

Credit allows a business to acquire expensive items and assets. Should a business be in need of something that it cannot afford to pay on a cash basis, it can negotiate favorable credit terms with the seller. Payments for such an item are spread over an agreed period. The buyer pays through small and affordable installments until they clear the debt.

mote1985 [20]3 years ago

4 0

Answer: the correct answer is a

Explanation:

A P E X

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Indicate which of the following items would be reported in the balance sheet. A. Net income D. Accumulated depreciation G. Inter

nordsb [41]

Answer:

B. Retained Earnings

D. Accumulated Depreciation

F. Wages Payable

H. Interest Payable

Explanation:

Retained earnings will be reported in the Equity section of the balance sheet.

Accumulated depreciation will be reported in the Fixed assets section of the balance sheet and will be used to calculate Net Book Value.

Wages and Interest payable are both current liabilities to reflect that the company owes wages and interest payments.

3 0

3 years ago

(Present value tables are needed.) Miami Marine Enterprises is evaluating the purchase of an elaborate hydraulic lift system for

amm1812

Answer:

C. $358,455

Explanation:

As per given data

B14 Model F54 Model

Investment $320,000 $240,000

Useful life (years) 8 8

Estimated annual net cash inflows $75,000 $40,000

Residual value $30,000 $10,000

Depreciation method Straight-line Straight-line

Required rate of return 14% 10%

Net Present value of the net cash inflows can be calculated by using the formula of present value of annuity because the cash inflows of each year are constant cash flows.

Present value of Annuity = P x [ ( 1 - ( 1 + r )^-n ) / r ]

Where

P = Annual cash inflows = $75,000

r = required rate of return = 14%

n = numbers of periods = 8 years

Placing values in the formula

Present value of cash inflows = $75,000 x [ ( 1 - ( 1 + 14% )^-8 ) / 14% ]

Present value of cash inflows = $347,915

Present value of residual value of asset can be calculated by discounting the residual value using required rate of return.

Formula for Discounting

Present value = P (1 + r)^-n

Where

P = Value to be discounted = $30,000

r = required rate of return = 14%

n - numbers of periods = 8 years

Placing values in the formula

Present value of residual value = $30,000 x ( 1 + 14% )^-8 = $10,517

Total Present value = $10,517 + 347,915 = 358,432

There is a difference due to the rounding effect in the calculations, the closest value id C. $358,455

8 0

3 years ago

See the production possibility tables for Marketopia and Econlandia below. Marketopia Econlandia Cookies Pies Cookies Pies 0 18

nordsb [41]

Answer: Marketopia has a comparative advantage in the production of pies.

Explanation:

The bakery with the comparative advantage in any of the goods is the one that has a lower opportunity cost in making it.

Marketopia.

Opportunity cost of Cookies = 18/30 pies = 0.6 pies

Opportunity cost of pies = 30/18 pies = 1.67 cookies

Econladia

Opportunity cost of Cookies = 9/90 pies = 0.1 pies

Opportunity cost of pies = 90/9 pies = 10 cookies

<em>It is shown that Marketopia has a comparative advantage in the production of pies because the opportunity cost of such is 1.67 cookies as opposed to Econladia which is 10 cookies. </em>

8 0

3 years ago

If the nominal interest rate is 7 percent and the real interest rate is -2.5 percent, then the inflation rate is Group of answer

madreJ [45]

Answer:

Inflation = 9.5%

Explanation:

Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.

Given the following data;

Nominal interest rate = 7 percent.

Real interest rate = -2.5 percent

Real interest rate = Nominal interest rate - Inflation

Inflation = Nominal interest - Real interest rate

Inflation = 7 - (-2.5)

Inflation = 9.5%

4 0

3 years ago

Which of the following statements is correct regarding compensation expense for employers in publicly traded corporations?

Sliva [168]

Answer:

d. Deductible compensation expense must be considered reasonable under the facts and circumstances of the employment.

Explanation:

Elon Musks collected billions of dollars due to the excellent performance of Tesla's stocks. The compensation awarded to the CEO, CFO and maximum three other executives must be reasonable. Performance based compensation is not limited in an amount, instead they are limited on the number of people that receive them.

3 0

3 years ago