Answer:
As the interest rate rises, the cost of a given investment project <u>rises </u>and businesses invest <u>less</u>.
Explanation:
The rise in interests will ultimately cause less economic growth. As the interest rate increases, the cost of a project will increase eventually. Even the products that would be used for the project will be subjected to interest hence, the project will become very costly.
People will eventually invest less because they wouldn't be able to pay the interests. Some people might take loans from banks to invest but ultimately they should have a probability of making enough money from the project to return the loan.
Answer:
Explanation:
Competitive Enterprise means a business enterprise that engages in, or owns or controls a significant interest in any entity that engages in, the performance of services of the type provided by the Company, its Affiliates and/or their predecessors.
Answer:
4.87%
Explanation:
In this question , we are asked to calculate the appropriate after-tax cost of new debt for the firm to use in capital budgeting analysis.
PMT = 1000*7% = 70 (indicates the amount of interest payment)
Nper = 10 (indicates the period over which interest payments are made)
PV = 966 (indicates the present value)
FV = 1000 (indicates the future/face value)
Rate = ? (indicates the cost of debt)
After Tax Cost of Debt = Rate(Nper,PMT,PV,FV)*(1-Tax Rate) = Rate(10,70,-966,1000)*(1-.35) = 4.87%
Answer:
$-1304.20
Explanation:
We are to calculate the Net present value of the investment
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
0 -$105,000
1 $26,000
2 $25,000
3 $24,000
4 $23,000
5 $22,000
6 $21,000
7 $20,000
8 $19,000
9 $18,000
10 $17,000
11 $16,000
12 $15,000
13 $14,000
14 $13,000
15 $12,000
16 $11,000
17 $10,000
18 $9,000
19 $8,000
20 $7,000
I = 20%
NPV= $-1,304.20
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer: bilateral contract
Explanation: In simple words, bilateral contract refers to an agreement under which two individual parties agree to satisfy the obligations of performing a specific activity.
In the given case, Peter promises to paint the store of Mary and Mary promises to pay him $3000.
Hence from the above we can conclude that the given case illustrates bilateral contract.