The book seller should invest in the extra space.
<u>Explanation:</u>
As per the given data:
rent for the additional space given is $300 per year, the additional profit that will be pulled by adding on the space = $4000 per year, the current rate of interest given is = 12%
In order to calculate about the decision, the present values needs to be calculated first
The present value of the investment = (- $ 3000 plus $ 4000) by 1.121
The present value of the investment = $ 571.43
The present value of the investment is positve, hence the book seller should invest in the extra space.
Answer: must offer higher
Explanation:
The financial world of investment is inter-correlated and products can sometimes be substitutes for one another. What this means is that if one financial product is not offering enough return on investment or is risky or for any other reason shakes their confidence in it, then investors tend to run to financial products that are perceived as better.
This is why when interest rates are stable and stocks are volatile, stock markets tend to lose value and bond markets sometimes gain value as investors leave the stock market and come to the bond market.
In the scenario described, the interest rate in the money market is 5%. If interest bearing financial assets are only at 2%, investors will leave/ not invest in those interest bearing bonds because the rate is lower. The sellers of such assets will therefore have to make them more attractive by increasing the the interest rates to find willing buyers.
Answer:
0.167
Explanation:
Given the following :
Heavy usage index = 1.5
Penetration share = 0.6
Market share = 15%
Using the formula:
Heavy usage index =
market share % / [Penetration share * share of wallet]
1.5 = 15% / [0.6 * share of wallet]
1.5 × [0.6 × share of wallet] = 15%
0.9 × share of wallet = 15%
Divide both sides by 0.9
Share of wallet = 15% / 0.9
Share of wallet = 0.15 / 0.9
Share of wallet = 0.16666
Share of wallet = 0.167
In an economy where the money supply and aggregate demand have been decreased by the central bank, you know that the central bank is using a contractionary monetary policy.
In an economy, changes in the money supply leads to changes in aggregate demand. An increase in the money supply increases aggregate demand and a decrease in the money supply decreases aggregate demand.
When a central bank takes action in order to decrease the money supply and increase the interest rate, it is following a contractionary monetary policy. Thus, the central bank requires Southern to hold 10% of deposits as reserves.
Hence, the decrease in the money supply reduces income and raises the interest rate.
To learn more about aggregate demand here:
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Answer:
a. $164,000
Explanation:
The computation of the Altoon Manufacturing's sales for the year until the flood is given below:
= Cash collections + ending receivables - opening receivables
= $158,000 + $25,000 - $19,000
= $164,000
hence, the Altoon Manufacturing's sales for the year until the flood is $164,000
Therefore the first option is correct