Answer:
a.borrowers gain at the expense of lenders.
Explanation:
Suppose the annual rate of inflation has been 3 percent during each of the last three years and that borrowers and lenders have come to expect this rate of inflation. If the inflation rate unexpectedly rises, then borrowers gain at the expense of lenders.
As inflation increases, two things happen
1. The amount of interest paid to lenders technically becomes of smaller value and lenders are loosing while borrowers are paying lesser
2. As inflation sets in, wages are increased to compensate for inflation and since the borrower already owed money before the inflation occurred, now he or she has more money in his or her paycheck to pay off the debt.
Answer:
Joint venture
Explanation:
Typically , joint venture is formed in order to:
- Pursue a new emerging market
To pursue an emergency market, two companies who operate in a similar industry can join their resources to face off larger competitors. Even though they might lose a little bit of control over the business, the profit that obtained from beating their competitors might be enough to cover the inconvenience
- increase the efficiency of their operation
Sometimes, companies also create a join venture because both parties involved have infrastructure that complement each others. Rather than purchasing new assets, creating a joint venture might be a cheaper option.
- Reduce the Risk of the operation
Creating a joint venture will also cut of the percentage of the profit that each parties initially obtain. But, the risk from potential loss will also be divided between each parties involved in the joint venture.
Answer:
overspending
Explanation:
Credit purchases encourage one to spend more than they can afford. The fact that the sellers do not demand cash when goods change hands entices people to buy more. In credit purchases, cash is not required, only a commitment to pay later, which leads to overspending.
Overspending increases the probability of defaulting on credit payments. When the debt to income level rises too much, the borrower may be forced to miss some installment payments and cater to basic needs.
The micro marketing of firms that are production oriented USUALLY RESULTS IN A BOOST IN SALES AND PROFITS.
Micro marketing refers to a strategy used by some companies to target a small segment of consumers with specific needs for the products of the company. In micro marketing, all advertisement efforts are targeted at the identified group of consumers. The targeted advertisement usually results in increased sales.
Answer:
70 days
Explanation:
For computing the number of days first we have to determine the credit turnover ratio which is shown below:
Credit turnover ratio is
= (Cost of Goods Sold ÷ Average accounts payable)
= ($45,021 ÷ $8,583)
= 5.245 times
Now the number of days is
= Total number of days in a year ÷ credit turnover ratio
= 365 ÷ 5.245
= 70 days
