A repo is basically a collateralized loan, whereas Fed funds are uncollateralized
<h3>What is
collateralized loan?</h3>
Collateralized loan obligations are a type of securitization in which payments from many small and big business loans are pooled and distributed to different classes of owners in different tranches. A collateralized debt obligation (CLO) is a type of debt obligation.
The use of a valuable item as collateral to obtain a loan is known as collateralization. If the borrower fails to repay the debt, the lender may seize and sell the asset to make up the difference. Asset collateralization offers lenders with some protection against default risk.
Collateral is a valuable object used to secure a loan. Lenders' risk is reduced by collateral. If a borrower fails on a loan, the lender can seize and sell the collateral to recuperate its losses.
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Answer:
c) $20,000.
Explanation:
The computation of the estimated ending inventory is shown below:
We know that
Cost of goods sold = Beginning inventory + purchase made - ending inventory
And, the
Sales - gross profit = Cost of goods sold
$100,000 - $100,000 × 30% = Cost of goods sold
So, cost of goods sold would be
= $100,000 - $30,000
= $70,000
Now the ending inventory would be
$70,000 = $18,000 + $72,000 - ending inventory
$70,000 = $90,000 - ending inventory
So, the ending inventory would be
= $90,000 - $70,000
= $20,000
Answer:
(Decrease, Increase)
Explanation:
When the government formulates and implements policies aimed at increasing equality, the society will experience a reduction in the level of efficiency. For example, an increase in income tax on wealthiest Americans, and redistribution of the tax revenue to the poorest Americans would may discourage the wealthy from taking more income-generating activities which create jobs, this is not optimal. At the same time, this policy would reduces the peoples’ incentive to work hard to earn their own money.
A savings account that pays interest every 3 months is said to have a tri-annual interest period.
Answer:
Depreciation amount has to be added back to the annual income because it is a non cash expense.
Project 22A
Depreciation = 242,000 / 6 years
= $40,333.33
Annual income = 40,333.33 + 16,890
= $57,223.33
IRR using Excel is:
= 11%
Project 23A
Annual income = 20,710 + 271,500 / 9 years
= $50,876.67
IRR = 12%
Project 24A
Annual income = 15,700 + 283,000 / 7 years
= $56,128.57
IRR = 9%
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<em>Note: Look at the formula bar to see how IRR was calculated. </em>
