Answer:
D. A large number of people are unemployed and have decreased spending power.
Answer:
Many people's wealth is held in stocks and as the price of stocks collapsed, they lost wealth.
Imagine that this happened to you. One day you are rich and that affects your spending habits. In a matter of few days or weeks, you lose a large portion of your wealth. So now, you are less rich or even poor. So your spending habits will be altered, i.e. you will spend less.
If you consider the economy as a whole, aggregate demand will fall, resulting in a decrease of aggregate supply, and an overall decrease of the GDP.
Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company. Perfection of this security interest may not protect Quotient Financial against the claim of <u>a trustee in bankruptcy.</u>
Explanation:
A security interest on a loan refers to a legal claim on collateral provided by the borrower ,it allows the lender to repossess the collateral and sell it if the loan goes default
A security interest reduces the risk for a lender, allowing it to charge lower interest on the loan.
Lower interest means that the borrower’s cost of capital will also be reduced.
Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company. Perfection of this security interest may not protect Quotient Financial against the claim of <u>a trustee in bankruptcy.</u>
Answer: Henry should purchase this plant as it pays back in less than the 6 years it will have to be replaced in.
Payback period = 3.7 years
Explanation:
Payback period is a capital budgeting strategy that shows how long it will take for cash inflow to pay off the original investment.
The formula is;
= Year before payback + Cashflow remaining till payback/ Cash inflow in year of Payback
Year before payback
= 1,200,000/ 325,000
= 3.69
= 3 years
Cashflow remaining
= 1,2000,000 - (325,000 * 3)
= $225,000
= Year before payback + Cashflow remaining till payback/ Cash inflow in year of Payback
= 3 + 225,000/325,000
= 3.69
= 3.7 years
