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1 year ago

The nominal interest rate is 6 percent and the inflation rate is 3 percent. What is the real interest rate

Business

1 answer:

rusak2 [61]1 year ago

5 0

Answer:

Explanation:

real interest rate ≈ nomial interest rate - inflation

ratereal interest rate ≈ 6 - 3 ≈ 3%

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The App Store needs to raise $2.8 million for expansion. The firm wants to raise this money by selling 20-year, zero-coupon bond

DENIUS [597]

Answer:

10,064 bonds

Explanation:

Given:

Amount to be raised = $2,800,000

Par value (FV) = $1,000

Maturity (nper) = 20×2 = 40 periods

Yield (rate) = 6.49 ÷ 2 = 3.245% or 0.03245

Coupon payment is 0 as it's a zero coupon bond.

Assume it's compounded semi-annually.

Calculate the price of the bond today using spreadsheet function =PV(rate,nper,pmt,FV)

Price of bond is $278.23

PV is negative as it's a cash outflow.

Number of bonds to be sold = Total amount to be raised ÷ Price of bond

= 2,800,000 ÷ 278.23

= 10,064 bonds

Company should sell 10,064 bonds to raise $2.8 million

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2 years ago

In order for a new grocery store to be erected, a neighborhood basketball court located on the building site will have to be dem

Tom [10]

Answer: They could be considered as external stakeholders

Explanation: A stake holder, is some one or a group of people who have something, they stand to gain or loose from the existence or activities of a company or establishment, it is apparent here that the actions of the new grocery store will affect the children that play basketball on the court.

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2 years ago

Decreasing taxes can stimulate the economy by

just olya [345]

Decreasing taxes can stimulate the economy by putting more money in the circulation or by boosting the spending .The tax cuts stimulate the economic growth only in the short-term.

Explanation:

Due to an decrease in tax the after tax income of an individual increases which is used by individuals to buy more product and services.Thus reduced tax rates leads to an increase in saving and investment, which leads to an increase in the productive capacity of the economy as a whole

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2 years ago

Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credi

seropon [69]

Answer:

Explanation:

The journal entry is shown below:

(A) Sales return and allowance A/c Dr $450,000

To Accounts receivable $450,000

(being returned goods recorded)

Merchandise inventory A/c Dr $292,500 ($450,000 × 65%)

To Cost of goods sold $292,500

(Being cost of goods sold recorded)

The computation of the estimated return is shown below:

= Sale value of merchandise × return percentage - actual return

= $11,500,000 × 4% - $450,000

= $460,000 - $450,000

= $10,000

(B) Sales return and allowance A/c Dr $10,000

To Accounts receivable $10,000

(being returned goods recorded)

Merchandise inventory A/c Dr $6,500 ($10,000 × 65%)

To Cost of goods sold $6,500

(Being cost of goods sold recorded)

The computation of the year-end allowance for sales returns is shown below:

The amount is same $6,500

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2 years ago

First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest

Pepsi [2]

Answer:

$ 2,621.28

Explanation:

The simple interest I=P*R*T

P is the principal amount of $11,000

R is the simple interest rate of 6%

T is the number of years the interest relates to

I=$11,000*6%*11=$7260

Compound interest:

FV=PV*(1+r)^n

FV is the amount of the deposit in eleventh year

PV is the amount deposited which is $11,000

r is the rate of return of 6%

n is eleven years

FV=$11000*(1+6%)^11=$ 20,881.28

I=FV-PV= 20,881.28-11,000=$ 9,881.28

Difference between interest earned=$9,881.28-$ 7260 =$ 2,621.28

3 0

2 years ago