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Ket [755]
3 years ago
13

You put money into an account that earns a 5 percent nominal interest rate. The inflation rate is 2 percent, and your marginal t

ax rate is 40 percent. What is your after-tax real rate of interest
Business
1 answer:
spayn [35]3 years ago
4 0

Answer: 1%

Explanation:

The Nominal interest rate has not been adjusted for inflationary effects yet and as such is considered overstated.

The Real Interest rate has been adjusted for inflation and is believed to show the actual return one receives.

Tax is calculated on the Nominal rate.

After tax Nominal Rate = 5% * ( 1 - 40%)

= 3%

Then adjust for inflation to find real rate,

= 3% - 2%

= 1%

The After-tax real rate is 1%.

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Which would be the appropriate strategy for companies to use to compete in the global marketplace if both the pressures to lower
malfutka [58]

Answer:

C) international strategy

Explanation:

An international strategy is used by very specific industries which can be considered as luxury or almost luxury products, e.g. scotch whisky, french wine, etc.

International companies are mainly exporting companies, with most of the cost related activities occurring in the headquarters. Therefore this type of companies don't need to adapt locally and are not that worried about lowering costs. The main role of the subsidiaries is to channel the sales from the headquarters to the final customers.

5 0
3 years ago
Gamble Company adjusts its accounts at the end of each month. The following information has been assembled in order to prepare t
frozen [14]

Answer:

$5,120

Explanation:

Workers are paid $12,800 per week (five days), since December 31 fell on a Tuesday, accrued wages payable will be equal to the wages proportional to two days:

= ($12,800 per week / 5 days per week) x 2 days = $2,560 per days x 2 days = $5,120

The appropriate journal entry should be:

December 31st, wages payable:

Dr Wages expense 5,120

    Cr Accrued wages payable 5,120

4 0
3 years ago
Which of the following are true?
laiz [17]

Answer:

c. Payback is the amount of time to recover the initial investment. No discounting occurs and all cash flows after the payback period are not accounted for. The rule is intuitive and used by small business owners

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.  The NPV does account for all cash flows as well as time value of money.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested . The IRR does account for all cash flows.

The discounted payback period discounts cash flows

3 0
3 years ago
The biggest problem in managing a checking account occurs when
Vikki [24]
The account holder tries to take out more money than the account contains.
7 0
3 years ago
In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Stand
Olin [163]

Answer:

$18,000 F

Explanation:

Actual overhead– Overhead Budgeted=

Overhead Controllable Variance

Actual overhead=$194,000

Overhead Budgeted=$212,000

$194,000–$212,000

=$18,000 F

(40,000 ×$3.80) + $60,000

=$152,000+$60,000

= $212,000

Therefore the manufacturing overhead controllable variance is $18,000 F

3 0
2 years ago
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