Answer:
no impact
Explanation:
The journal entry to purchase the supplies for cash
Supplies Dr $ 1,300
To Cash A/c $ 1,300
(Being the purchase of supplies is recorded)
For recording this we debited the supplies as it increased the assets and credited the cash as it decreased the assets
Therefore there is no impact on the accounting equation
Answer:
7.05 %
Explanation:
After tax cost of debt = interest x ( 1 - tax rate)
so, the initial step is to determine the interest rate :
The Bond Yield (i/yr) presents the market rate and this is what we want for our interest rate.
thus,
PV = - [$950 - ($950 x14%)] = - $817<em>(remove floatation cost from market price)</em>
FV = $1000
PMT = $1000 x 7 % = $70.00
P/YR = 1
N = 14
i/yr = ??
Using a financial calculator to input the values as above, the Bond Yield (i/yr) will be 9.40 %
therefore,
After tax cost of debt = 9.40 % x (1 - 0.25)
= 7.05 %
Answer: Option (C) is correct.
Explanation:
A country has a comparative advantage in producing a commodity if the opportunity cost of producing that good is lesser in that country as compared to the other country.
From the information given in the question, it is clear that Alphaland has a comparative advantage in axes and Betaville has a comparative advantage in batons.
Hence, Alphaland will trade axes for batons only if the price of batons is lower than the cost of producing it in Alphaland. So that there is a possibility mutually beneficial trade.
