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podryga [215]
3 years ago
12

Interest rates and decisions

Business
1 answer:
svetoff [14.1K]3 years ago
4 0

Answer:

a. No, the firm needs to take the volatility of short-term rates into account.

Explanation:

Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.

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Addison Corporation is considering the purchase of equipment that would increase sales revenues by $250,000 per year and cash op
mr_godi [17]

Answer:

a) 17.5%

Explanation:

The computation of the simple rate of return on the investment is shown below:

Simple rate of return = Annual net income  ÷ Initial investment

where,

Annual net income is

= Sales revenue - cash operating expenses - depreciation expenses

= $250,000 - $100,000 - ($400,000 ÷ 5)

= $70,000

And, the initial investment is $400,000

So, the simple rate of return is

= $70,000 ÷ $400,000

= 17.5%

Dividing the annual net income by the initial investment we can get the simple rate of return

8 0
3 years ago
Using examples explain what inputs eBay might be using in conducting its business . What are eBay outputs ?
lawyer [7]
Typically, a simple way to think of an input is anything that costs money. These can be both good and bad things. A simple example would be: if I had a machine that made candy: my inputs would be the energy required to run the machine, the person required to work the machine, and the ingredients I had to put in to make the candy. My outputs might be the candy the machine made and the happiness it gave to people who ate it. A negative output might be that it made people unhealthy. 

As an internet company eBay does not have many of the typical inputs of doing business. For example, it does NOT have the cost of physical stores nor does it have the cost of depreciating inventory or any machines. For eBay, some examples of inputs would be it's people such as software engineers, marketing team, and executive staff. All overhead such as office space and the electricity to power its office space would be another example. Other examples could include the physical code behind eBay's software and money used to finance the company, and the data warehouses used to store everything. 

Outputs can be thought of as the value a company creates. eBay's outputs are also somewhat atypical. eBay does not create a physical product that they then sell so that makes this a challenging question. You could argue that eBay's store or its platform is an output. All the data it produces as a company is an output and has a lot of value. Since eBay allows people across the world to open up their own store online, you could say it's creating the social good of jobs or entrepreneurship "global employment" through this action (eBay has supported this publicly as well so you could look up more about it on Google). Another output could be eBay stores created by sellers. eBay owns PayPal so if you can think of any related to PayPal you could include those as well and cite that eBay owns the company. 

Hope that helps
8 0
3 years ago
The elasticity coefficient is determined by looking at the percentage change in quantity divided by the percentage change in pri
krok68 [10]

Answer:

Elasticity coefficient = 0.5

Explanation:

Elasticity coefficient = percentage change in quantity demanded / percentage change in price

percentage change in price if gasoline = 20%

percentage change in quantity demanded = 10%

Elasticity coefficient = percentage change in quantity demanded / percentage change in price

= 10% / 20%

= 1/2

= 0.5

Elasticity coefficient = 0.5

5 0
2 years ago
Silmon Corporation makes a product with the following standard costs:
kolbaska11 [484]

Answer:

Material quantity variance =$74, 280  unfavorable        

Explanation:

<em>The material quantity variance occurs when the actual quantity of material used to achieve a given level of output is more or less than the standard quantity expected.</em>

For Silmon Corporation, it can be computed as follows:

Quantity variance is                                                          

                                                                                        Gram

5,300 units should have used ( 5300× 5.1 )                 27,030

but did used                                                                    <u>39,410</u>

Variance in quantity                                                      12,380 Unfavorable

Price per unit                                                              <u> × $6</u>

Material quantity variance                                         <u> $ 74,280</u>. Unfavorable

   

Material quantity variance =$74, 280  unfavorable                                  

5 0
3 years ago
Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: Balance, De
nalin [4]

Answer:

Cash payment for merchandise inventory is $1,025,800.00

Cash payment for operating expenses is $179,170.00

Explanation:

The amount of cash payments in respect of merchandise inventory is the cost of merchandise sold minus decrease in inventories plus decrease in accounts payable.

Cash paid for merchandise inventory=$1,031,550-($193,430-$178,020)+($105,800-$96,140)=$1,025,800.00  

Cash paid for operating expenses=$179,400+($14,030-$12,650)-($8,970-$7,360)=$ 179,170.00  

8 0
3 years ago
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