The larger the investment you make, the easier it will be to

Which of the following statements is CORRECT?a. An investment that has a nominal rate of 6% with semiannual payments will have a

andreyandreev [35.5K]

Answer:

c. If a loan has a nominal annual rate of 7%, then the effective rate will never be less than 7%

<em>CORRECT</em>

as at least is recive 7% of the investment. If payment are made in shorter period (semiannually, quarterly, etc)

Then the effective rate will be higher, not lower.

Explanation:

a. An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%

FALSE the effective rate will be higher as there is compounding effect.

b. The present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due

FALSE the annuity-due is discounted for one period less, as the payment are made at the beginning of the period therefore; his V is greater.

d. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different

FALSE if it mades annual payments they will be equal

e. The proportion of the payment that goes toward interest on a fully amortized loan increases over time.

FALSE the interest will decrease over time as there is a portion of principal which is being paid each installment

3 0

3 years ago

Limerick, Inc. has budgeted total sales for January, February, and March of $800,000, $900,000, and $950,000 respectively. Cash

Naya [18.7K]

Answer:

$905,000

Explanation:

February Collection will be as follows :

<em>February Collection = Cash Sales + Credit Sales </em>

= $900,000 x 25 % + $900,000 x 40 % + $800,000 x 60 %

= $905,000

the amount of cash received from sales during the month of February is $905,000.

7 0

3 years ago

Alex Smith rents storage space to college students who go home for the summer but do not want to haul all of their property home

Alenkinab [10]

Answer:

d) variability

Explanation:

Variability is the quality of a service that does not follow a fixed, or predictable pattern, following instead a changing (or variable), or unpredictable pattern.

Seasonality is a type of variability that occurs when a business is subject to very rigid time constraints: in some periods of time it booms, and in other periods, it busts.

Alex's business is seasonal because it only becomes profitable during the summer months, while the other three seasons represent a net loss for him.

6 0

3 years ago

Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 480 units that cost $6

Whitepunk [10]

Answer:

The cost of ending inventory is $24314.

Explanation:

Under the average cost method, the inventory is valued at the average cost of all the inventory that is available from the start of the month and the purchases made.

The average cost of inventory can be calculated by summing up the total cost of beginning inventory and purchases and dividing it by the total number of units available for sale.

Average cost per unit = [ 480*65 + 720*68 + 360*70 ] / [480 + 720 + 360]

Average cost per unit = 67.538 rounded off to $67.54 per unit

The total inventory available for sale = 480+720+360 = 1560 units

The ending inventory in units = 1560 - 1200 = 360 units

The cost of ending inventory = 360 * 67.54 = $24314.4 rounded off to $24314

5 0

3 years ago

Zephyr Electricals is a company with no growth potential. Its last dividend payment was $4.50, and it expects no change in futur

VARVARA [1.3K]

Answer: $50

Explanation:

We can use the Gordon Growth Model of Stock Valuation. The formula is thus,

P = D1 / r – g

D1 = the annual expected dividend of the next year

r = rate of return

g = the expected dividend growth rate (assumed to be constant)

There is no growth potential and dividends are expected to stay the same so no growth rate and D1 will be the same as D0.

Plugging that into the formula therefore will give us

P = D1/r

P= 4.5/0.09

= $50

Current Stock Price is $50.

6 0

3 years ago