Answer
The answer and procedures of the exercise are attached in the following images.
Explanation
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Answer:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
Explanation:
Loanable funds refer to the aggregate amount of money that all sectors, entities and individuals within an economy have decided to keep as an investment, instead of spending on personal consumption, by saving and giving them out as loans to borrowers.
The market for loanable funds is in equilibrium when the supply of loanable funds by the saver is equal to demand for loanable funds by the borrowers at a given interest rate.
When the market for loanable funds is in equilibrium, efficiency is maximized because projects that have higher rates of return are given priority to be funded first before the projects with lower rates of return are funded. The reason is that savers that have lowest costs of lending provides funds for the projects that have highest return rates in equilibrium. However, potential saver who do not lend money will prefer a higher interest rates.
Therefore, the correct options related to the two aspects of efficiency that the equilibrium of market for loanable funds exhibits are as follows:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
C business mileage during the year to claim the standard mileage rate for the business
The answer is <u>"120 skiers per day".</u>
On average, 1,200 skiers in the village
On average, skiers stay in lavilla for 10 days
how many new skiers are arriving = ?
Applying Little's Law,
Flow Rate = Inventory / Flow Time
= 1200 skiers / 10 days
= 120 skiers per day
Answer:
D. Inflation factors to actual costs incurred by the contractor
Explanation:
The effect of inflation on the profitability of a product cannot be overemphasized. At the time of inflation the profitability of a project will be reduced and the cost of capital will increase. The effect of inflation on a project can be determined by applying inflation factor.
Inflation impacts on the cash flow from a project, especially a project with a long life span.
