1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alla [95]
3 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]3 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.

You might be interested in
Discuss the propriety of showing: a) treasury stock as an asset - b) ""gain"" or ""loss"" on sale of treasury stock as additions
r-ruslan [8.4K]

Answer:

a. Treasury stock cannot be shown as an asset because a company cannot buy itself.

b) Gain or loss on sale of treasury stock is not to be treated as income, it should be added or subtracted from share capital because it is a capital transaction.

c). Treasury stock is not an asset. Dividends received from treasury stock cannot be treated as income, it is only assets that generates income.

Explanation:

When corporations for some strategic reasons and the desire to maintain and stabilize the shareholders wealth decide to buy back some of its shares, that is what is known as treasury stock. It is also called reacquired stock

a. The treasury stock is like a corporation acquiring itself, so it cannot be shown as an asset, it is only a reclassification within the same balance sheet.

b. Gains or loss on sale of treasury stock is not an income transaction, it is a transaction that affects the share capital of the corporation and must be charged to the share capital not the income.

c. Since treasury stock is not an asset, dividend received on treasury stock is not to be treated as income, it is only assets that generates income. it should affect retained earnings.

6 0
3 years ago
Tim, who works for Peachtree Realty, referred a buyer to a broker who works for Pinetop Realty. The referring agent is to receiv
IrinaK [193]

Answer:

$1,312.50

Explanation:

Calculation for How much was the referring agent paid

First step is to find the buyer agent amount by using the buyer's agent percentage to multiply the buyer purchased amount of the home

Using this formula

Buyer agent amount =Buyer's agent percentage× Home purchased amount

Let plug in the formula

Buyer agent amount=1.5%×$350,000

Buyer agent amount=$5,250

The last step is to find How much was the referring agent paid

Using this formula

Amount referring agent paid =Buyer agent amount× Percentage of buyer side commission

Let plug in the formula

Amount referring agent paid=$5,250×25%

Amount referring agent paid=$1,312.50

Therefore the amount that the referring agent paid will be $1,312.50

5 0
3 years ago
At the present time, Perpetualcold Refrigeration Company (PRC) has 10-year noncallable bonds with a face value of $1,000 that ar
Assoli18 [71]

Answer:

The correct answer is 4.33%(approx)

Explanation:

According to the scenario, the given data are as follows:\

Face value = $1,000

Market price = $1,278.41

Coupon Rate = 11%

So Coupon Payment = $110

Years to maturity = 10 years

So, we can calculate the after tax cost of debt by using following method:

After Tax Cost of Debt = YTM × ( 1 - Rate of Tax)

Where, YTM = \frac{C + \frac{F - P}{T} }{\frac{F + P}{2} }

So, by putting the following value, we get

YTM = 0.0721

So by putting the value in formula, we get

After Tax Cost of Debt = 0.0721 × ( 1 - 0.4)

= 4.33% (approx)

6 0
3 years ago
Question 3: Cost terminology in manufacturing firms a) Direct materials include all materials and components only raw materials
zaharov [31]

Answer:

1. a. Only major materials and components.

Only the major materials and components are include as direct materials because these are the materials that directly needed for production.

b. Only hourly production workers (aka assembly workers).

The direct labor has to be those people who are directly involved in production which in this case is the assembly workers. Managers and Supervisors are not integral so are not direct labor.

c. Both big items that cannot be traced (e.g., factory rent) and small items that are not worth tracing (e.g., glue, grease).

All other items involved in production should be included as manufacturing overheads including big items and small items that cannot be traced.

2.

Rent for the factory building ⇒ <u>Manufacturing Overhead (OH).</u>

Cost of engines used in production ⇒ <u>Direct materials (DM).</u>

Depreciation on production equipment ⇒ <u>Manufacturing Overhead (OH). </u>

Cost of lubricant used in production. ⇒<u> Manufacturing Overhead (OH). </u>

Production supervisor's salary. ⇒ <u>Manufacturing Overhead (OH). </u>

Assembly workers' wages. ⇒ <u>Direct Labor.</u>

7 0
2 years ago
If you often commute through urban areas, you may want to _____.
s2008m [1.1K]

Answer:

D. Plan your trips to avoid rush hour traffic

5 0
3 years ago
Read 2 more answers
Other questions:
  • The Jabba Corporation manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip
    11·1 answer
  • Taking a physical count of inventory
    11·1 answer
  • A​ zero-coupon bond can be redeemed in 20 years for $ 10 comma 000.$10,000. how much should you be willing to pay for it now if
    8·1 answer
  • Suppose a period of continuous political instability leads people to believe that the economy will slide into a deep recession.
    11·1 answer
  • Geoff purchased a life annuity for $4,800 that will provide him $100 monthly payments for as long as he lives. Based on IRS tabl
    13·1 answer
  • Conducting a thorough assessment to document what sensitive information an organization is collecting, where it is stored, how l
    13·2 answers
  • Economists who believe in sound finance would say that in a recession, the government should:
    9·1 answer
  • On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimat
    10·1 answer
  • Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manu
    10·1 answer
  • Heather and Alicia work at the same company, but in different departments. Heather is an individual contributor and she is respo
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!