An increase in government spending.
<h3><u>What is Fiscal Policy?</u></h3>
Government expenditure and taxation are used in fiscal policy to have an impact on the economy. Fiscal policy is often used by governments to encourage robust, long-term growth and to lower poverty. During the recent global economic crisis, when governments intervened to stabilize <u>financial institutions, spur growth, and lessen the impact </u><u>of the crisis on </u><u>vulnerable individuals</u><u>, the function and goals of </u><u>fiscal policy rose to prominence</u>. Fiscal policy can be classified as either neutral, expansionary, or contractionary.
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Answer:
4%
Explanation:
the growth rate (g) = retention rate (the amount of net income that the company keeps in order to grow, and therefore, does not distribute to stockholders) x ROI (return on investments)
- retention rate = ($3 - $2.25) / $3 = 0.25
- ROI = 16%
g = 0.25 x 16% = 4%
Answer:
a. 25 b. 7 c. 6 d. 4. e. 3
Explanation:
Money Multiplier = 1/Reserve ratio
A. At 4% reserve ratio
Money Multiplier = 1/0.04
Money Multiplier = 25
B. At 12% reserve ratio
Money Multiplier = 1/0.12
Money Multiplier = 6.67
Money Multiplier = 7
C. At 18% reserve ratio
Money Multiplier = 1/0.18
Money Multiplier = 5.56
Money Multiplier = 6
D. At 26% reserve ratio
Money Multiplier = 1/0.26
Money Multiplier = 3.85
Money Multiplier = 4
E. At 30% reserve ratio
Money Multiplier = 1/0.3
Money Multiplier = 3.33
Money Multiplier = 3
Answer:
Project A's payback period = 2.23 years
Project B's payback period = 3.3 years
Explanation:
project A project B
initial investment $290,000 $210,000
useful life 6 years 11 years
yearly cash flow $83,653 + $46,500 $46,000 + $17,727
= $130,153 = $63,727
salvage value $11,000 $15,000
payback period $290,000 / $130,153 $210,000 / $63,727
= 2.23 years = 3.3 years
$-9.48
Explanation:
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
Cash flow = (revenue - cost - depreciation) (1 - tax rate) + depreciation
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(400 - 0) / 5 = 80
(200 - 90- 80) x (1 - 0.32) + 80 = $100.40
Cash flow in year 0 = $-400
Cash flow each year from year 1 to 5 = $100.40
I = 9%
NPV = $-9.48
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
