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Alla [95]
2 years ago
13

Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they off

er. He particularly likes his local bank because he is being offered a nominal rate of 10%. But the bank is compounding bimonthly (every two months). What is the effective interest rate that Rahul would pay for the loan?
a. 10.603% b. 10.426% c. 10.609% d. 10.285%

Business
1 answer:
svp [43]2 years ago
3 0

Answer:

b. 10.426%

Explanation:

Using the attached formula, convert the nominal rate to effective annual rate

<em>m</em> in the formula is the number of compounding periods per year; 12/2 = 6 in this case.

APR is the nominal rate which is 10%.

Next, plug in the numbers to the formula as shown below;

EAR = [1+\frac{0.10}{6}]^{6} -1

EAR = 1.10426-1

EAR = 0.10426 or 10.426% as a percentage

Hence choice B is correct.

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The company's price offer is the most important competitive factor in determining a company's ability to secure contracts to supply private-label footwear to large multi-outlet retailers of athletic footwear in a particular geographic region.

The S/Q ratings of both branded and private-label footwear manufactured at each production plant can be raised through TQM/Six Sigma quality control systems and best practices training.

Five things affect the S/Q rating: The following factors should be taken into account: (1) current-year spending per footwear model for new features and styling; (2) the percentage of superior materials used; (3) current-year expenditures for Total Quality Management (TQM) and/or Six Sigma quality control programs; (4) cumulative expenditures for TQM/Six Sigma quality control efforts (to reflect learning and experience curve effects); and (5) current-year and cumulative expenditures to train employees in using the best practices to assemble athletic footwear.

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7 0
1 year ago
Thailand has a comparative advantage in rice and an absolute advantage in cell phones Indonesia has a comparative advantage in c
Aleonysh [2.5K]

Answer:

d. Thailand should export rice and import cell phones

Explanation:

Analyzing the question, it is correct to say that Thailand should export rice and import cell phones.

To understand why this statement is correct, we need to understand the concept of comparative advantage and absolute advantage.

The comparative advantage occurs when a country has great efficiency in producing a certain good, that is, the production is specialized and therefore advantageous in relation to another country. So it is correct to say that Thailand, having a comparative advantage in rice, should export rice to achieve greater economic advantage.

The absolute advantage, on the other hand, corresponds to the production of a good with lower costs than another country, but Thailand should import cell phones because Indonesia has a comparative advantage in cell phones, which makes it more competitive than Thailand in this segment.

3 0
2 years ago
The straight-line depreciation method and the double-declining-balance depreciation method: Multiple Choice Are acceptable for t
fiasKO [112]

Answer:

The straight-line depreciation method and the double-declining-balance depreciation method:

Produce the same total depreciation over an asset's useful life.

Explanation:

The straight-line and the double-declining-balance depreciation methods are two of the four depreciation methods allowed by US generally accepted accounting principles (GAAP).  The other two methods are sum of the years' digit and units of production.  The straight-line method is calculated by subtracting the salvage value from the asset's cost and either dividing the depreciable amount by the number of years or applying a fixed rate on the depreciable amount.  For the double-declining-balance method, 100% is divided by the number of years of the asset's useful life and then multiplying by 2 to obtain the depreciation rate.  Depreciation expense is then calculated on the declining balance until the salvage value is left.  This is why they produce the same depreciation over the asset's useful life.

3 0
3 years ago
The opening of which canal significantly reduced the time and money required to ship goods between the east coast and the west c
bazaltina [42]

Answer:

The Erie Canal

Explanation:

When it opened it dramatically decreased the cost of shipping while reducing the time to travel to the West.

8 0
2 years ago
An aging of a company's accounts receivable indicates that $8,000 are estimated to be uncollectible. If Allowance for Doubtful A
joja [24]

Answer:

c. debit to Bad Debts Expense for $6,900.

Explanation:

Allowance for Doubtful Accounts  $1,100 credit balance,

Estimated Un collectibles                $8000 credit

Required Adjustment                    $ 6900 credit

The adjustment to record bad debts for the period will require a

c. debit to Bad Debts Expense for $6,900.

Bad Debt Expense $ 6900 Dr

Allowance for Doubtful Accounts $ 6900 Cr

Alternatively if the allowance account had a debit balance the entry would have been posted adding the two amounts.

7 0
3 years ago
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