Answer:
10.38%
Explanation:
From the question above a bank offers to lend an amount of $10,000 for a period of 1 year
The bank expects an interest of $250 to be paid every 4 months
= $250×4
= $1,000
Total amount of interest= $1,000
The first step is to calculate the nominal interest
= (1000/10,000)×100
= 0.1×100
= 10%
Therefore, the effective annual rate on the loan can be calculated as follows
= (1+r/m)^m-1
r = 10% , m = 4
= [1+(10/100)/4]^-1
=[ (1+0.1/4)^4]-1
= (1+0.025^4)-1
= (1.025^4)-1
= 1.1038-1
= 0.1038×100
= 10.38%
Hence the effective annual rate in the loan is 10.38%
Answer:
The correct answer is option a.
Explanation:
A budget line represents the maximum possible combination of two goods that can be purchased by an individual by spending all of his income.
George has a weekly income of $50.
He spends this income on donuts and coffee.
The price of a donut is $1 and the price of coffee is $2.50.
As George's income increase to $100, George will be able to afford more coffee and donuts as the price of coffee does not change.
So, the budget line will shift to the right, indicating the increase in the quantity of goods George can afford.
Answer:
Debt = 83.19%
Equity = 16.81%
Explanation:
Given that
Market value of the equity = $4 billion
Market value of debt = $19.8 billion
Total firm capital would be
= Market value of the equity + Market value of the debt
= $4 billion + $19.8 billion
= $23.8 billion
So, the weightage of debt would be
= Market value of debt ÷ Total firm capital
= $19.8 billion ÷ $23.8 billion
= 83.19%
And, the weightage of equity is
= Market value of equity ÷ Total firm capital
= $4 billion ÷ $23.8 billion
= 16.81%
Answer:
(b) Social, and economic dimension
Explanation:
The dimensions of a business environment refers to the various factors that must be taken into consideration so as to have a sustainable business in a particular environment. These factors include the economic, legal, social, technological and political policies guiding a particular environment. If these factors are disregarded, the business can easily crumble.
In the question above, social factors that involve the incorporation of norms, values, beliefs, traditions, impact, and social trends ensures the smooth running of the business.
In the economic dimension, economic policies and systems that include taxes, interest rates, unemployment rate, stock market indices, etc. play a key role in the success of the business.
Answer:
The expected year-end free cash flow is $2.44 million
Explanation:
The formula to compute free cash flow is shown below:
Value of operations = (free cash flow) ÷ (weighted average cost of capital - growth rate)
$57.50 million = free cash flow ÷ (10.25% - 6.00%)
$57.50 million = free cash flow ÷ 4.25%
So, free cash flow equal to
= $2.44 million
The growth rate should always be deducted from the weighted average cost of capital in computing the year ending free cash flow.
