Inflation is the economic condition in which the interest rate keeps increasing which is beneficial for the lenders. But not a fixed rate lender.
<h3 /><h3>What is Interest Rate?</h3>
Interest rate is the prevailing market rate which the lender of the money gets in return for the money provided as a loan.
If there is a fixed interest contract the lender will get the same percentage of return for the duration of contract, no matter the fluctuation of the interest rate in the market. This is not beneficial when the economy is facing inflation. As whatever be the rate in the market (definitely higher) the lender will get the same percentage of return.
However if there is a variable rate contract the rate is updated and the lender is paid at the updated interest rate. This is beneficial when the economy is facing inflation.
Learn more about interest rates at brainly.com/question/28142837
#SPJ1
Answer:
The account balance after 4 years will be $2,420.
Explanation:
First we need to add Bob and Judy's amount to find the total amount that will be deposited. (1260+975)=2,235.
Now we will break up the annual interest into monthly interest because it will be compounded monthly. 2/12=0.166.
Then we will break up the 4 years into months also because the interest is compounded monthly. 4*12=48
Now we use the formula for compound interest
Final amount = Principal*(1+R)^N
Principal = 2,235
R= 0.166% or 0.00166
N= 48
We put these values into our formula
2,235*(1+0.00166)^48
=2,420
Answer:
1.
- The firm increases its dividend payout ratio.
This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
- The firm’s inventory turnover decreases, with no effect on the sales forecast.
If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
On a spreadsheet there are two types of variables independent and dependent. Independent variables refer to those that can be changed and their value that is changing. A dependent variable is something that remains the same and the value of it does not change.
Answer:
$ 168,000
Explanation:
Include both Mark-ups and Mark-Downs and Exclude beginning inventory
When LIFO Inventory Method is used to find out Ending inventory retail Value. Cost to Retail Ratio will be Applied for both Previous year ending Inventory and the Current Year addition To Calculates
the Previous year Ending inventory :
Cost to Retail Ratio : Ending inventory at cost / Ending inventory at Retail
For Current year Addition :
Cost to Retail Ratio : Current Year Addition in Cost /Current Year Addition in Retail
Current year addition in retail includes : Markup ,Markdown purchases
Kindly check the attached images below to see the step by step explanation to the question above.
