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2 years ago

A borrower has two alternatives for a loan:

Business

1 answer:

lions [1.4K]2 years ago

8 0

Answer:

The second alternative is the best option for the borrower as it provides the less amount of interest expense.

Explanation:

We solve for the interest expense on each alternative and pick the lowest:

(1) common note.

$Principal \: (1+ r)^{time} = Amount$

Principal 420,000.00

time 0.25

rate 0.04000

$420000 \: (1+ 0.04)^{0.25} = Amount$

Amount 424,138.43

Interest expense: 4,138.43‬

(2) Discounted note:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $420,000.00

time 0.25

rate 0.04000

$\frac{420000}{(1 + 0.04)^{0.25} } = PV$

PV 415,901.9490

THe borrower recieve this amount and then, return 420,000

Interest over time 4,098.05099

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Juarez builders incurred $285,000 of labor costs for construction jobs completed during the month of august, of which $212,000 w

Feliz [49]

The answer is

debit work in process inventory $212,000; credit factory wages payable $212,000.

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2 years ago

Read 2 more answers

According to Twitter’s amended S-1 filed November 4, 2013, approximately how many shares of common stock would be outstanding af

PIT_PIT [208]

Answer:

544696816

Explanation:

544696816 shares of common stock were outstanding after the offering on the floor of the Securities and Exchange Commission (SEC).

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2 years ago

Summarize how compound interest helps you to accumulate savings even faster.

yulyashka [42]

Answer:

The magic of compound interest happens in a way that the more you put in, the faster your money grows.

Explanation:

The magic of compound interest happens in a way that the more you put in, the faster your money grows. The interest you earn on the amount you save also earns interest and this snowballing effect makes you accumulate your savings even faster. For example, if you deposit $100 in a savings account that pays 5% interest per year. At the end of the year, you account will have (5%*100= 5) plus the $100 you deposited, coming to a total of $105. At the end of the second year, your $5 interest earned in year 1 will earn another 5% interest and so will the $100 you initially deposited.

4 0

2 years ago

AlphaBrona Industries manufactures 50,000 components per year. The manufacturing cost of the components was determined as follow

sashaice [31]

Answer:

Option (a) is correct.

Explanation:

Manufacturing cost:

= Direct materials + Direct labor + Variable overhead + Fixed overhead

= $80,000 + $100,000 + $30,000 + $60,000

= $270,000

Purchase from outside:

= Fixed overhead + Purchase price

= $60,000 + (50,000 × $10)

= $60,000 + $500,000

= $560,000

Effect on income = Purchase from outside - Manufacturing cost

= $560,000 - $270,000

= $290,000

Therefore, the above calculations shows that income will decrease by $290,000.

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2 years ago

Bill currently uses his entire budget to purchase 5 cans of Pepsi and 3 hamburgers per week. The price of Pepsi is $1 per can,

FinnZ [79.3K]

Answer:

Option (B) is correct.

Explanation:

The utility maximization point for a consumer is as follows:

$\frac{MU_x}{P_x}=\frac{MU_y}{P_y}$

It is given that,

price of Pepsi(x) = $1 per can

price of a hamburger(y) = $2

Marginal utility from Pepsi = 4

Marginal utility from hamburgers = 6

Hence,

$\frac{4}{1}>\frac{6}{2}$

4 > 3

Therefore, it can be seen that the consumer's utility is not maximized at this point.

Law of diminishing marginal utility states that as the consumer consumes more and more quantity of goods then as a result the utility obtained from the consumption goes on diminishing.

So, there is a need to increase the quantity of Pepsi consumed and reducing the quantity of hamburgers consumed.

6 0

2 years ago