Because people who are earning a low income still have to pay the same amount as people who are recieving a high income
        
             
        
        
        
THE ANSWER TO THIS QUESTION IS JOE HAS A HIGHER ONE
        
                    
             
        
        
        
This would be defined as addressability. 
Hope this helped fully! If you need any further clarification or defining, let me know. 
        
             
        
        
        
Answer and Explanation:
The computation of the effective interest rate is shown below:
For Fidelity bank 
= (2 × 4 × $150,000 × 0.12) ÷ (4 +1 )× ($150,000 - $18,000 - ($150,000 × 26%)
= 30.97%
For southwest bank 
= (2 × 12 × $150,000 × 0.12) ÷ (12+1 )× ($150,000 - ($150,000 × 13%)
= 25.46%
 
        
             
        
        
        
Answer:
It will take 3 years and 66 days to pay for the initial investment.
Explanation:
Giving the following information:
Cash flows= $615 for 8 years
Initial investment= $1,750
<u>The payback period is the time required to cover for the initial investment.</u>
<u></u>
Year 1= 615 - 1,750= -1,135
Year 2= 615 - 1,135= -520
Year 3= 615 - 520= 95
Exactly:
(95/520)= 0.18*365= 66
It will take 3 years and 66 days to pay for the initial investment.