Answer:
b. The most likely explanation for an inverted yield curve is that investors expect inflation to decrease
Explanation:
I have attached an image which plots the behavivour of a yield curve and inflation in a same period. As you can observe, there is an indirect relation between boths curves.
Sorry, can you show attachments?
Answer: 189400
Explanation:
The dollar amount of sales that must be made to produce the target income would be:
= (Fixed costs + Target profit) / Contribution margin ratio
= (80000 + 14700) / 50%
= 94700 / 50%
= 94700 / 0.5
= 189,400
The use of intermediaries is the primary difference between the two.
Explanation:
Direct distribution channel is one in which the consumer is directly connected to the manufacturer and there is no use of a distribution system that is separate from them and there are no intermediaries.
The contact between the two is direct.
To the contrary in an indirect distribution channel there is no direct connection between the manufacturer and the person who is actually buying the product and the business is being mediated by the middlemen.
In order to properly tackle this problem, we must understand the relationship between the nominal annual rate and real (effective) annual rate.
To do this:
-First you take the nominal rate, divide by the number of times it's compounded (converted) per year.
-Then, add one to that number, and raise that number to the power of how many times you compound per year.
Here is the method in practice:
First 3 Years:
Nominal rate= 2% ÷ 12 times/yr = 0.001667
Effective rate = 1.001667 ^12 = 1.020184
Next 2 Years (Discounting)
3% ÷ 2/yr = .015
1.015 ^ 2 = 1.061364
Next 4 years (Interest)
.042 ÷ .5 (once every 2 years) = .084
1.084 ^ (1/2) = 1.041153
The last 3 years are already expressed as an effective rate, so we don't need to convert them. The annual rate is:
1.058
I kept the 1 in the numbers (1.058 instead of 5.8% for example) so that it's easier to find the final number
Take every relevant number and raise it to the power of the number of years it's compounded for. For discounting, raise it to a negative power.
First 3 years: 1.020184 ^ 3 = 1.061784
Next 2 years: 1.030225 ^ -2 = .942184
Next 4 years: 1.041163 ^ 4 = 1.175056
Last 3 years: 1.058 ^ -3 = .84439
Multiply these numbers (include all decimals when you do this calculation)
1.062 * .942 * 1.175 * .844 = .992598
This is our final multiplier to find the effect on our principal:
.992598 * 2,480 = 2461.64
Answer is 2461.64
