Creditors are interested in the times interest earned ratio because they want to "<span>have adequate protection against a potential drop in earnings jeopardizing their interest payments".
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The times interest earned ratio is also known as interest coverage ratio, which measures the capacity of an association to pay its obligation commitments. The proportion is generally utilized by banks to discover whether an debt borrower can bear to assume any extra obligation. It might be figured as either EBIT or EBITDA divided by the aggregate interest which is payable.
Answer:
$227,500
Explanation:
The computation of the total amount of cash paid is shown below:
Cash paid for insurance premium = Prepaid Insurance at end of the year + Prepaid Insurance recognized - Prepaid Insurance at the beginning of the year
= $61,250 + $218,750 - $52,500
= $227,500
We simply applied the above formula so that the correct amount of cash paid could come with respect to the insurance premium
Answer:
True
Explanation:
In monetary economics, the demand for money is the total amount of the asset an individual prefer to keep in liquid or near liquid forms rather than investment. Some of the factors that influences the demand for money are interest rate, inflation, income, e.t.c.
John Maynard Keynes postulated that the demand for money falls within the realms of liquidity preference, which he summarized under three headings, these are, the transactions motives, the precautionary motives, and the speculative motives.
Answer:
when there is an entry of a substitute product in the market. This is the right time that customers attention need to be fully caught. When there is a general decline in the sell of the product. Advertisement is necessary.
Explanation:
Answer:
100 bed linens
Explanation:
Opportunity costs of South Korea:
- Computer chips = 100 chips / 12 hours of labor = 8.33 computer chips per hour of labor.
- Bed linens = 50 chips / 6 hours of labor = 8.33 bed linens per hour of labor.
Since both products require the same amount of labor hours (8.33 labor hours per unit), then the opportunity cost of producing 100 computer chips is 100 bed linens.
Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another alternative.
