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3 years ago

Why do lenders often require a down payment when credit is used to purchase a good?

Business

1 answer:

kherson [118]3 years ago

4 0

Answer:

see below

Explanation:

A down payment is a lump-sum amount paid a borrower raises when purchasing an asset on credit. The down payment or deposit is paid to the lender and reduces the credit to be extended. Usually, the lender will demand a down payment of up to 20% of the asset's value.

The down payment reduces the risk a lender takes in advancing the loan to the borrower. It reduces the loan amount involved. The down payment shows the borrower is financially stable. If they can raise 20 percent of the amount, it gives the lender confidence that the borrower can repay the loan. A down payment shows the borrower is a low-risk customer

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Answer: both I and II are TRUE

Explanation:

Many firm experience a life cycle characterized by non-constant growth. And For non-constant growth firms, stock price is not equal to the present value of all future dividend payments.

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telo118 [61]

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3 years ago

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Natasha2012 [34]

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Learn more about global recession here

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1 year ago

Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supp

bekas [8.4K]

Answer:

Manson will incur a loss of $10,300 by buying the part.

Explanation:

Purchases = 10,300 * $6 = $61,800

Variable cost = 10,300 * $5 = $51,500

Fixed cost = 10,300 * $3 = $30,900

Analysis:

Details Make ($) Buy ($) Net ($)

Purchase 0 61,800 61,800

Variable 51,500 0 51,500

Fixed 30,900 30,900 0

Loss 10,300

Therefore, Manson will incur a loss of $10,300 by buying the part.

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3 years ago