The rate of return if the price of Telecom stock goes up by 6% during the next year is 8.00%
What is rate of return?
The rate of return on the bullish strategy is the return on the stock minus the interest on the borrowing.
The share price increase of 6% means the total amount invested would increase by 6%
new value of investment=$16000*(1+6%)
new value of investment=$16,960
interest on borrowing=4%*$8000
interest on borrowing=$320
Gain on investment=new value of investment-initial investment-interest on borrowing
Gain on investment=$16,960-$16,000-$320
Gain on investment=$640
rate of return=gain on investment/equity investment
rate of return=$640/$8000
rate of return=8.00%
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Answer:
Answer for the question:
On March 31, 2021, Southwest Gas leased equipment from a supplier and agreed to pay $350,000 annually for 15 years beginning March 31, 2022. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Southwest recorded a $3,187,770 lease liability. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
Determine the interest rate implicit in the lease agreement. (Do not round intermediate calculations.)
Is given in the attachment.
Explanation:
Answer:
a) Decrease LRAS
b) Decrease LRAS
c) Increase AD
d) Increase AD
Explanation:
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