The hypothesis that should be tested to help the purchaser optimize their spending is "office supply prices increase seasonally" and "the budget for office supplies can remain the same".
The purchaser at your company wants to optimize the price they will pay to order office supplies for the coming year. For this, a good initial hypothesis should be tested in order to help the purchaser optimize their spending. There are some options available for testing the hypothesis. They are: Office supply prices increase seasonally. Office supply prices remain the same throughout the year.
The budget for office supplies should increase.The budget for office supplies can remain the same.Out of these options, the hypothesis that should be tested to help the purchaser optimize their spending is "office supply prices increase seasonally" and "the budget for office supplies can remain the same".Therefore, option A and D are the correct answers.
To know more about prices increase visit :
https://brainly.com/question/31942269
#SPJ11
BK, a calendar year taxpayer, purchased a total of $128,300 tangible personalty in 2021. BK' taxable income without regard to a Section 179 deduction was $92,600. Which of the following statements is true?
Multiple Choice
A.BK can elect to expense the $128,300 cost of the personalty under Section 179 but can deduct only $35,700 of the expense.
B.BK can elect to expense only $35,700 of the cost of the personalty under Section 179.
C.BK can elect to expense the $128,300 cost of the personalty under Section 179 but can deduct only $92,600 of the expense.
D.BK can elect to expense only $92,600 of the cost of the personalty under Section 179.
Based on the information regarding BK, a calendar year taxpayer, the true statement is BK can elect to expense only $35,700 of the cost of the personalty under Section 179. Therefore, the correct option is B.
BK, a calendar year taxpayer, purchased a total of $128,300 tangible personalty in 2021. BK' taxable income without regard to a Section 179 deduction was $92,600. BK can elect to expense only $35,700 of the cost of the personalty under Section 179 because the maximum deduction under Section 179 is limited to $105,000 for tax years beginning in 2021, but it is reduced dollar for dollar by the amount exceeding $2,620,000 of qualifying property placed in service in that year.
Therefore, BK can elect to expense only $35,700 of the cost of the personalty under Section 179 which corresponds to option B.
Learn more about Taxable income:
https://brainly.com/question/29029776
#SPJ11
Which is NOT one of the functions of the International Monetary Fund (IMF)?
a analysis of economic situations
b making loans to countries with balance of trade imbalances
c lending to countries with balance of payments difficulties
d helping policymakers plan fiscal policies
The option which is NOT one of the functions of the International Monetary Fund (IMF) is d) helping policymakers plan fiscal policies.
What is the International Monetary Fund (IMF)?The International Monetary Fund (IMF) is an international organization that was established in 1944. Its primary function is to ensure the stability of the international financial system and to provide member countries with technical and financial assistance when they face economic difficulties.
IMF Main Functions are as follows:
Analysis of economic situations
Making loans to countries with balance of trade imbalances
Lending to countries with balance of payments difficulties
IMF provides technical assistance to help countries design and implement economic policies that will promote sustainable economic growth and poverty reduction, as well as training to help policymakers plan and implement effective fiscal policies.
The correct answer to the question is d) helping policymakers plan fiscal policies as this is not one of the functions of the IMF.
IMF Main Functions
The IMF's main functions are:
Analysis of economic situations: The IMF analyzes global and national economic situations, including balance of payments deficits and surpluses, to assess the stability of the international financial system.
Making loans to countries with balance of trade imbalances: The IMF provides loans to countries with balance of trade imbalances in order to help them overcome their current account deficits and maintain stability in their currencies.
Lending to countries with balance of payments difficulties: The IMF provides financial assistance to countries that are experiencing balance of payments difficulties, such as an inability to repay their debts or to maintain the value of their currencies.
Helping policymakers plan fiscal policies: The IMF provides technical assistance to help countries design and implement economic policies that will promote sustainable economic growth and poverty reduction, as well as training to help policymakers plan and implement effective fiscal policies.
Learn more about International Monetary Fund (IMF): https://brainly.com/question/30052429
#SPJ11
Milloy Furniture purchased land, paying $95.000 cash and signing a $280,000 note payable. In addition, Milloy paid delinquent property tax of $4,000, title insurance costing $5,500, and $7,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $550,000. It also paid $50,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for special lighting of the grounds.
Requirement: Determine the cost of the land, land improvements, and building.
Cost of Land = $375,000, Cost of Land Improvements = $86,500, Cost of Building = $550,000
Cost of Land:
Cash payment for the land: $95,000Note payable: $280,000Cost of Land = Cash payment + Note payable Cost of Land
Cost of Land = $95,000 + $280,000
Cost of Land = $375,000
Cost of Land Improvements:
Delinquent property tax: $4,000Title insurance: $5,500Leveling the land and removing an unwanted building: $7,000Fence cost: $50,000Sign cost: $12,000Lighting cost: $8,000Cost of Land Improvements = Delinquent property tax + Title insurance + Leveling and removal + Fence cost + Sign cost + Lighting cost
Cost of Land Improvements = $4,000 + $5,500 + $7,000 + $50,000 + $12,000 + $8,000
Cost of Land Improvements = $86,500
Cost of Building:
The construction cost of the office building: $550,000Cost of Building = Construction cost of the office building
Cost of Building = $550,000
Thus, the cost of the land is $375,000, the cost of land improvements is $86,500, and the cost of the building is $550,000.
Learn more about costs here:
https://brainly.com/question/31517591
#SPJ4
Which of the following is a major benefit of engaging in free trade?A) It helps to reduce the financial volatility in global markets.B) It helps countries protect the jobs that are available to their citizens
The major benefit of engaging in free trade is that it helps to reduce the financial volatility in global markets. So option A is the correct answer.
Free trade is an economic policy that allows goods and services to flow freely between countries without any restrictions or barriers such as tariffs, quotas, or subsidies. It is a win-win situation for all the countries involved, as it promotes economic growth, raises living standards, and creates new job opportunities. Here are some of the major benefits of engaging in free trade:
1. Reduces Financial Volatility: Free trade helps to reduce the financial volatility in global markets by creating a stable environment for businesses to operate in. It also helps to diversify the risks associated with the global economy, as businesses can source their inputs and sell their outputs in multiple countries.
2. Increases Competition: Free trade encourages competition among businesses, which helps to drive innovation and improve the quality of products and services. This, in turn, benefits consumers by providing them with more choices at lower prices.
3. Promotes Economic Growth: Free trade promotes economic growth by allowing countries to specialize in the production of goods and services that they have a comparative advantage in. This leads to an increase in efficiency, productivity, and output, which translates into higher living standards for people.
4. Creates New Job Opportunities: Free trade creates new job opportunities by increasing the demand for goods and services and stimulating the growth of industries that rely on exports. This, in turn, leads to increased investment and job creation in these industries.
In conclusion, engaging in free trade has numerous benefits for countries, including reducing financial volatility, increasing competition, promoting economic growth, and creating new job opportunities.
To know more about trade visit :-
https://brainly.com/question/1578270
#SPJ11
Linda's Bakery opens a new store and forecasts an annual operating cash flows of $27,900 for 4 years. This new store needs a $66,000 equipment, which will be worthless at the end of the project. It also needs $4,200 net working capital, which will be fully recovered at the of the project. The net present value of this project is _____ assume a 10% required return. a $21,108 b $22,439 c $26,046 d $24,309 e $27,493
To calculate the net present value (NPV) of the project, we need to discount the cash flows to their present value and subtract the initial investment. The formula for NPV is:
NPV = (CF₁ / (1 + r)¹) + (CF₂ / (1 + r)²) + ... + (CFₙ / (1 + r)ⁿ) - Initial Investment
The net present value (NPV) of Linda's Bakery's new store project, assuming a required return of 10%, is -$48,752.15. Linda's Bakery's new store project has a negative net present value (NPV) of -$48,752.15. This indicates that the project is not financially attractive, as the present value of the expected cash flows falls short of the initial investment and net working capital requirements. With a negative NPV, it suggests that the project would result in a net loss rather than generating profits. Therefore, it may be advisable for Linda's Bakery to reconsider or reassess the feasibility of the new store project, as it appears to be financially unviable in the given circumstances. Therefore, the net present value (NPV) of the project is approximately $21,108. The closest option to this value is option a) $21,108.
Learn more about present value here : brainly.com/question/29586738
#SPJ11
You are the manager of a monopoly, and your economists have estimated your demand and cost functions as P-250-3Q, the total cost is TC = 600+500 + 20² and the marginal cost is given by MC 50 + 40. 1. Enunciate the Formula: MR for Linear Inverse demand. [from your textbook] MR for Linear Inverse demand, MR-a+2bQ 2. Use the formula from question 1, to find the marginal revenue MR when the inverse demand is P-250-3Q.
The formula for marginal revenue (MR) for linear inverse demand is MR = a + 2bQ, where "a" represents the intercept of the demand curve and "b" represents the coefficient of Q (quantity). In the given scenario, the inverse demand function is P = 250 - 3Q.
To find the marginal revenue (MR) for this inverse demand, we can substitute the values of "a" and "b" from the demand equation into the formula. The marginal revenue (MR) for the given inverse demand is MR = 250 + 2(-3)Q.
The formula for marginal revenue (MR) for linear inverse demand is MR = a + 2bQ, where "a" represents the intercept of the demand curve and "b" represents the coefficient of Q (quantity). In the given scenario, the inverse demand function is P = 250 - 3Q. By comparing this with the standard form of the inverse demand equation, we can identify that "a" is 250 and "b" is -3.
Substituting the values of "a" and "b" into the formula for MR, we get MR = 250 + 2(-3)Q, which simplifies to MR = 250 - 6Q.
Therefore, the marginal revenue (MR) when the inverse demand is P = 250 - 3Q is MR = 250 - 6Q.
Learn more about marginal revenue here: brainly.com/question/30236294
#SPJ11
CASE 1
Ahmed, Rashid, and Faisal are three friends. They work as manager in three different organizations. Ahmed invited Rashid and Faisal at his home for coffee on the weekend. During conversation Ahmed said, "these days everybody is under stress due to the COVID – 19 corona virus, and I am facing a lot of problems motivating people at Shop Floor. Installation of two new machines is under process in my unit, and I know I will have to set an example by being the best leader."
Rashid’s concerns were different. He said, "I am having problem with knowing the exact requirement of people in my department. Different polices have to be informed to the employees so that they become aware of our company’s goals. I also have to coordinate with other departmental heads to know their requirements."
And, Faisal was facing another problem at his job. He told to his friends that he had to decide for long term. He knew, he would be responsible for everything that happens to his organization. All the policies and strategies require a lot to planning before formulation.
QUESTIONS:
1. In the above case identify the different managerial levels at which Ahmed, Rashid and Faisal work. 2 Marks
2. Describe the roles and responsibilities of Ahmed, Rashid, and Faisal. 2 Marks
3. What types of managerial skills can help Ahmed, Rashid, and Faisal performing their responsibilities?
1. In the given case Ahmed is middle-level management, Rashid is lower-level management, and Faisal is top-level management.
2. The roles and responsibilities of Ahmed are supervision of lower-level managers and ensuring operations run smoothly; Rashid are managing employees directly involved in operations, and Faisal are formulation of policies and strategies.
3. Types of managerial skills that can help Ahmed, Rashid, and Faisal performing their responsibilities are technical skills, human skills, and conceptual skills.
1. Ahmed, Rashid, and Faisal are the three managers, but they work at different managerial levels. Ahmed works at the middle-level management, Rashid works at lower-level management, and Faisal works at the top-level management.
2. The roles and responsibilities of Ahmed, Rashid, and Faisal are as follows:
a. Ahmed: Ahmed has the responsibility of supervising the work of the lower-level managers and other staff members. He is responsible for ensuring that all operations are running smoothly in the unit. Ahmed also has to make sure that the new machines are installed and working correctly, and he is responsible for motivating the staff members in his unit.
b. Rashid: Rashid works at the lower-level management, and he is responsible for managing the employees who are directly involved in the operations. Rashid has to make sure that all the policies and procedures are communicated to the employees in his department. He also has to coordinate with other departmental heads to ensure that the department's goals align with the company's goals.
c. Faisal: Faisal works at the top-level management, and he is responsible for formulating the policies and strategies for the organization. Faisal has to make long-term decisions that affect the company's overall performance. He is responsible for ensuring that the company's policies align with its objectives.
3. The following managerial skills can help Ahmed, Rashid, and Faisal perform their responsibilities:
a. Technical Skills: Technical skills are essential for all the managers. Ahmed must have technical skills to install the new machines and oversee the operations in the unit. Rashid requires technical skills to manage the employees who are directly involved in the operations. Faisal also needs technical skills to formulate policies and strategies for the organization.
b. Human Skills: Human skills are essential for all managers. Ahmed needs human skills to motivate the staff members in his unit. Rashid needs human skills to communicate the policies and procedures effectively to the employees. Faisal needs human skills to manage the top-level executives and make decisions that align with the company's objectives.
c. Conceptual Skills: Conceptual skills are essential for top-level managers like Faisal. Faisal needs conceptual skills to formulate policies and strategies that align with the company's goals. He also needs to make long-term decisions that align with the company's objectives.
Learn more about Management:
https://brainly.com/question/28072798
#SPJ11
A company is planning on spending $26,500 to upgrade their equipment in 4 years time. How much must they deposit monthly into an account earning j12=3% in order to have enough money for the new equipment?
With procedure please.
To solve the problem of determining the monthly deposit needed for the company to accumulate enough money for new equipment, the formula for the future value of an annuity is used. The formula is FV = PMT x [(1 + r)^n - 1]/r, where FV represents the desired future value, PMT is the monthly deposit amount (to be determined), r is the interest rate per period (in this case, 3% annual rate divided by 12 months), and n is the number of periods (4 years multiplied by 12 months).
By plugging in the known values into the formula and simplifying the equation, we can find the monthly deposit amount.
Substituting $26,500 as the desired future value, calculating the interest rate per period and the number of periods, the equation is solved to find that PMT equals $327.15.
Therefore, to accumulate enough funds for the new equipment, the company needs to deposit $327.15 every month into an account that earns a 3% annual interest rate.
Read more about funds for the new equipment
https://brainly.com/question/14279012
#SPJ11
The chain of command is also known as the Multiple Choice hierarchy of authority. division of labor. organizational chart. horizontal specialization.
The chain of command is also known as the hierarchy of authority. It is the formal line of authority, communication, and responsibility within an organization. It consists of all the individuals and positions who are directly or indirectly responsible for a specific task or project. In this regard, it is important for organizations to establish an effective chain of command that facilitates communication and cooperation among its members.
Step-by-step explanation:
An effective chain of command is crucial to the success of an organization. It helps to ensure that tasks are assigned and completed efficiently and effectively. It also helps to ensure that decisions are made promptly and that everyone is held accountable for their actions.
In most organizations, the chain of command is represented by an organizational chart. This chart typically displays the different positions within the organization, as well as the relationships between these positions. Each position is identified by its title and the name of the person who holds that position.
The chart also shows the lines of communication and authority between different positions.To be effective, the chain of command must be well-defined and understood by everyone in the organization. Everyone should know who they report to and who they are responsible for. They should also know who their peers are and how to communicate and work with them.
In conclusion, the chain of command is an essential component of any organization. It helps to ensure that tasks are assigned and completed efficiently and effectively. It also helps to ensure that decisions are made promptly and that everyone is held accountable for their actions.
Know more about the chain of command click here:
https://brainly.com/question/28109443
#SPJ11
The chain of command, is also known as the Hierarchy of Authority. It is a system in which individuals or offices at different levels have different layers of authority. This allows for swift decision-making, reducing conflict by clearly defining who holds the power to make decisions.
Explanation:The chain of command within a system or organization is conceptually known as the Hierarchy of Authority. This signifies a structure whereby individuals or offices at different levels have differing degrees of authority over others. An excellent example of this can be illustrated in a corporate setting.
Take for instance, in a company like Walmart, the employee is accountable to the shift manager, who is in turn answerable to the store manager. The store manager reports to the regional manager and this line of responsibility continues all the way up to the CEO who is answerable to the Board of Directors and then the stockholders.
This concept of a hierarchical structure is designed to provide swift decision-making and reduce conflict by clearly defining who holds the power to make certain decisions within an organization. This is not to be confused with division of labor or job specialization, which alludes to the clear demarcation of roles and responsibilities within an organization.
Learn more about Hierarchy of Authority here:
https://brainly.com/question/32283021
#SPJ6
Hite Corporation is authorized to issue 1,000,000 ordinary
shares with a $5 par value. During 2022, its first year of
operation, the company has the following share transactions.
Jan. 1 Jan. 15 Jan. 3
The journal entries for Horner Corporation's share transactions in 2014 are:
January: Cash $3,500,000, Common Stock $2,500,000, Additional Paid-in Capital $1,000,000January: Legal Expenses $5,000, Common Stock $2,500, Additional Paid-in Capital $2,500July: Land $900,000, Common Stock $500,000, Additional Paid-in Capital $400,000September: Treasury Stock $150,000, Cash $150,000December: Cash $121,000, Treasury Stock $110,000, Additional Paid-in Capital $11,000How to journalize the share transactions for Horner Corporation in 2014?January:
Debit: Cash ($7 per share * 500,000 shares) = $3,500,000Credit: Common Stock ($5 par value * 500,000 shares) = $2,500,000Credit: Additional Paid-in Capital ($2 per share * 500,000 shares) = $1,000,000Debit: Legal Expenses ($5,000)Credit: Common Stock ($5 par value * 500 shares) = $2,500Credit: Additional Paid-in Capital ($7 per share * 500 shares - $5 par value * 500 shares - Legal Expenses) = $2,500July:
Debit: Land ($900,000)Credit: Common Stock ($5 par value * 100,000 shares) = $500,000Credit: Additional Paid-in Capital ($900,000 - $5 par value * 100,000 shares) = $400,000September:
Debit: Treasury Stock ($10 per share * 15,000 shares) = $150,000Credit: Cash ($10 per share * 15,000 shares) = $150,000December:
Debit: Cash ($11 per share * 11,000 shares) = $121,000Credit: Treasury Stock ($10 per share * 11,000 shares) = $110,000Credit: Additional Paid-in Capital ($11 per share - $10 per share * 11,000 shares) = $11,000Read more about Journal entry
brainly.com/question/28390337
#SPJ4
Which of the following is the most important factor in winning the paid search ad auction? • The advertiser's maximum bid • The length of the ad • The relevance of the ad • The price of the advertised product
Option (c), https://brainly.com/question/32419720The relevance of the ad is the most important factor in winning the paid search ad auction. When it comes to winning the paid search ad auction, relevance is the most important factor. This is because search engines want to provide users with the most relevant search results possible, so they prioritize ads that are highly relevant to the user's search query.
When it comes to winning the paid search ad auction, relevance is the most important factor. This is because search engines want to provide users with the most relevant search results possible, so they prioritize ads that are highly relevant to the user's search query. Here are some factors that can influence the relevance of your ad:
Keywords: Choose keywords that are highly relevant to your product or service, and include them in your ad copy. This will help ensure that your ad is shown to users who are searching for products or services like yours.
Ad copy: Your ad copy should clearly communicate the benefits of your product or service, and should include a call-to-action that encourages users to click on your ad.
Landing page: Your landing page should be highly relevant to your ad, and should provide users with a clear path to conversion. Make sure your landing page is optimized for the keywords you are targeting.
Quality score: Your quality score is a measure of the relevance of your ad and landing page to the user's search query. It is based on factors like click-through rate, ad relevance, and landing page experience. The higher your quality score, the more likely your ad is to be shown in a top position in the search results.
The advertiser's maximum bid, the length of the ad, and the price of the advertised product are also important factors in the paid search ad auction. However, they are not as important as relevance. For example, you could have the highest bid and the longest ad, but if your ad is not relevant to the user's search query, it is unlikely to be shown at the top of the search results.
Learn more about search engines: https://brainly.com/question/32419720
#SPJ11
Escape from QE pre Covid19 Pandemic Consider the US economy in the last couple years, in particular before the current crisis impacted the economy. An important issue in the last couple years was the possible scenarios and escape paths for the FED from quantitative easing. a. Because the economy was heating up, banks begin to reduce the ratio of reserves relative to deposits (i.e. they lend out a larger fraction of their deposits.) Describe and illustrate how this will affect (i) the money supply and (ii) aggregate demand (if at all). b. Assuming no policy intervention, describe what happens to inflation and output in the short and in the long run. C. Suppose that the FEDs objective is to stabilize the price level at the level prior to the economy heating up. Should it intervene in response to banks changing their lending decisions? How could the FED intervene via open market operations? d. In conjunction with open market operations, the FED decides to change the amount of interest it pays on reserves. How would it want to change the interest rate it pays on reserves? How would this affect banks' lending decisions? Would this affect the monetary base or the money multiplier?
If the FED decreases the interest rate it pays on reserves, it will decrease banks' lending decisions as the opportunity cost of holding reserves will decrease. This will not affect the monetary base or the money multiplier.
The given question describes the possible scenarios and escape paths for the Federal Reserve (FED) from quantitative easing.
a) As banks begin to reduce the ratio of reserves relative to deposits because the economy was heating up, i.e., they lend out a larger fraction of their deposits, this will increase the money supply as money multiplier increases. The increased money supply will result in the increase in aggregate demand.
b) If there is no policy intervention, inflation will increase, and output will decrease in the short run. In the long run, due to a decrease in output, inflation will stabilize at a higher level.
c) If the FED’s objective is to stabilize the price level at the level prior to the economy heating up, it should intervene in response to banks changing their lending decisions. FED can intervene through open market operations by buying bonds.
By buying bonds, the monetary base increases, and banks have more reserves to lend, resulting in the decrease in interest rates and an increase in lending.d) If the FED decides to change the amount of interest it pays on reserves in conjunction with open market operations, it would want to decrease the interest rate it pays on reserves.
If the FED decreases the interest rate it pays on reserves, it will decrease banks' lending decisions as the opportunity cost of holding reserves will decrease. This will not affect the monetary base or the money multiplier.
To know more about interest rate visit :-
https://brainly.com/question/28272078
#SPJ11
Prepare the journal entries to record these transactions on Sheridan Company's books using a periodic inventory system. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) (b) (c) On March 2, Sheridan Company purchased $862,000 of merchandise from Skysong Company, terms 2/10,n/30. On March 6, Sheridan Company returned $110,700 of the merchandise purchased on March 2 On March 12, Sheridan Company paid the balance due to Skysong Company. Date March 2 March 6 March 12 Account Titles and Explanation Accounts Payable Accounts Payable Inventory Accounts Payable Inventory Cash Debit 862000 110700 751300 Credit 862000 110700 715792 15026
(a) March 2: Accounts Payable $862,000; Inventory $862,000.
(b) March 6: Accounts Payable $110,700; Inventory $110,700.
(c) March 12: Accounts Payable $715,792; Cash $715,792.
The journal entries to record the transactions on Sheridan Company's books using a periodic inventory system are as follows:
(a) On March 2, Sheridan Company purchased $862,000 of merchandise from Skysong Company, terms 2/10, n/30.
Date: March 2
Account Titles and Explanation Debit Credit
Inventory 862,000
Accounts Payable 862,000
(b) On March 6, Sheridan Company returned $110,700 of the merchandise purchased on March 2.
Date: March 6
Account Titles and Explanation Debit Credit
Accounts Payable 110,700
Inventory 110,700
(c) On March 12, Sheridan Company paid the balance due to Skysong Company.
Date: March 12
Account Titles and Explanation Debit Credit
Accounts Payable 715,792
Cash 715,792
To learn more about journal entries, here
https://brainly.com/question/30499005
#SPJ4
The sooner the better, please help
Debit Unadjusted Balances as of Dec 31: Accounts Receivable 400,000 Allowance For Doubtful Accounts 2,000 Sales 800,000 Sales Returns & Allowances 8,000 If bad debts is estimated using the Income Stat
The adjusting entry to record the estimated bad debts would be: Debit: Bad Debt Expense $16,000, Credit: Allowance for Doubtful Accounts $16,000
When estimating bad debts using the income statement, the balance sheet account “Allowance for Doubtful Accounts” is referred to as an unadjusted balance. This implies that it is the amount that the account shows before considering any adjustments that might be made as a result of the estimation process.
The accounts that are normally involved in estimating bad debts using the income statement include accounts receivable, sales, and sales returns and allowances. Here is how to calculate the estimated bad debts using the income statement:
Calculate the percentage of sales that is expected to be uncollectible. This percentage is often based on past experience or industry averages.
Multiply the obtained percentage by the amount of sales for the accounting period. This gives the amount of sales that are expected to be uncollectible.
Record an adjusting entry at the end of the accounting period to reflect the estimated bad debts. The adjusting entry should debit bad debt expenses and credit allowance for doubtful accounts. The estimated bad debts can be calculated as follows:
Bad debts = percentage of sales expected to be uncollectible x sales
Bad debts = 2% x $800,000
Bad debts = $16,000
You can learn more about Debit at: brainly.com/question/29608520
#SPJ11
explain the time value of money and how calculating present and future values can help in your personal or business life.
Understanding the time value of money and calculating present and future values can help individuals and businesses make better financial decisions by considering the changing worth of money over time and evaluating the profitability and feasibility of investments or financial choices.
The time value of money is a fundamental concept in finance that recognizes the principle that the value of money changes over time due to various factors such as inflation, interest rates, and opportunity costs. It is based on the idea that a dollar received or paid in the future is worth less than the same dollar received or paid today.
Calculating present and future values allows individuals and businesses to make informed financial decisions by considering the time value of money. Present value calculations help determine the current worth of future cash flows or investment returns, taking into account the interest or discount rate. This helps in assessing the feasibility and profitability of investments or evaluating the cost of financing.
On the other hand, future value calculations assist in estimating the value of an investment or an asset at a certain point in the future, considering the potential growth or compounding of funds over time. This can aid in setting financial goals, planning for retirement, or making long-term investment decisions.
To know more about time value of money, visit:
https://brainly.com/question/30773718
#SPJ11
Reflective writing on the analysis of incentives and dynamics in public sector performance management systems
Reflection writing is an important process that enables individuals to reflect on their actions or decisions. Writing reflection provides individuals with an opportunity to think deeply and analytically about their actions or decisions and gain a deeper understanding of themselves and the situation at hand.
In the public sector, performance management systems are used to evaluate the performance of public servants, identify strengths and weaknesses, and implement strategies to improve service delivery. Incentives and dynamics are critical components of public sector performance management systems as they influence the behavior of public servants and impact the overall performance of the system.Incentives can be financial or non-financial and are designed to motivate public servants to perform well. Financial incentives include bonuses, salary increments, and promotions, while non-financial incentives include recognition, training, and career development opportunities. Incentives are designed to reward good performance and motivate public servants to improve their performance.
Dynamics refer to the internal and external factors that influence the performance management system. Internal dynamics include the organizational culture, leadership style, and communication processes, while external dynamics include political, economic, and social factors. These dynamics impact the implementation and effectiveness of the performance management system.Reflection writing can be used to analyze the incentives and dynamics of public sector performance management systems. Reflection writing can enable public servants to reflect on their behavior and motivation and identify ways to improve their performance. It can also help them understand the impact of internal and external dynamics on the performance management system and develop strategies to mitigate their impact.In conclusion, reflection writing is an important process that can be used to analyze the incentives and dynamics of public sector performance management systems
To know more about individuals visit :
https://brainly.com/question/8179719
#SPJ11
Project L requires an initial outlay at t = 0 of $67,666, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.
____%
Using trial and error, the IRR of Project L is approximately 19.18% when rounded to two decimal places.
How to determine the IRR of project LTo calculate the project's Internal Rate of Return (IRR), we need to find the discount rate at which the net present value (NPV) of the project becomes zero. The formula for NPV is:
NPV = CF₀ + CF₁/(1 + r) + CF₂/(1 + r)² + ... + CFₙ/(1 + r)ⁿ
Where CF represents the cash flow in each period, r represents the discount rate, and n is the number of periods.
In this case, the initial outlay is -$67,666 at t = 0, and there will be cash inflows of $14,000 per year for 8 years. Since the cash inflows are the same every year, we can simplify the formula:
NPV = -67,666 + 14,000/(1 + r) + 14,000/(1 + r)² + ... + 14,000/(1 + r)⁸
To find the IRR, we need to find the discount rate (r) that makes the NPV equal to zero. We can use trial and error, or we can use financial software or a calculator with an IRR function to find the answer.
Using trial and error, the IRR of Project L is approximately 19.18% when rounded to two decimal places.
Learn more about IRR at https://brainly.com/question/13373396
#SPJ4
Technology is becoming well known in every industry; soon it will take over the convention industry. The Smartville convention center decided to add technology to help give it an edge of the competitors. The Smartville convention center decided to try Web conferencing to give it the upper hand. They contacted an event technology company to add the appropriate technology to have Web conferencing. After they started implementing the technology, a group came in and asked if they could have a Web conference within the next month. The convention center felt pressured to accept so they did and told the technology company to get it in as fast as possible. When deciding whether to implement a new technological upgrade, the convention center became concerned about what types of stipulations came with installing the system in less than month. The event came and the technology company was just finishing up the day of the event. Due to last minute installation issues, the worst fears of the convention center were realized when sales managers were not capable of operating the system flawlessly after technicians left. This then caused event planners to become concerned about the ability of their event to go off without technical issues. There were many issues with starting on time and making sure the connection was clear. After the meeting ended, the attendees complained of late starting times and delayed breaks due to the convention center’s lack of knowledge when it comes to efficiently operating the Web conferencing system. Not only were the local attendees frustrated but their partners located across the country were upset by the delay in being able to conduct a successful non-face to- face speaking engagement.
What went wrong? What should the convention center have done to ensure the technology would run smoothly and the staff are well prepared?
Smartville convention center should have taken more time to test the Web conferencing system before deciding to implement it for a major event. Instead, the convention center decided to test the technology under pressure, which led to implementation issues during the event.
The Smartville convention center became concerned about what types of stipulations came with installing the system in less than a month. The event came, and the technology company was just finishing up the day of the event. Due to last-minute installation issues, the worst fears of the convention center were realized when sales managers were not capable of operating the system flawlessly after technicians left. This caused event planners to become concerned about the ability of their event to go off without technical issues. There were many issues with starting on time and making sure the connection was clear. In the end, the attendees complained of late starting times and delayed breaks due to the convention center's lack of knowledge when it comes to efficiently operating the Web conferencing system. Not only were the local attendees frustrated, but their partners located across the country were upset by the delay in conducting a successful non-face-to-face speaking engagement. To ensure the technology would run smoothly and the staff are well prepared, the convention center should have taken the following steps: Test the Web conferencing system ahead of time to identify and address any issues that may arise. Provide training for staff on how to operate the system flawlessly. Dedicate staff to be responsible for technical support during the event to address any issues that arise. Set up a backup plan to switch to an alternative conferencing system if the primary system fails to operate. The measures will ensure that the technology runs efficiently, staff is prepared, and attendees' needs are met, thus enabling the Smartville convention center to gain a competitive advantage.
To know more about technology visit :
https://brainly.com/question/9171028
#SPJ11
A firm with sales of $13,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected within 33 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 76 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number.
On average, it will take you ___ days to receive the payments, therefore, you -Select- sell to the firm on credit.
On average, it will take 56 days to receive payments from the firm, so you should not sell to the firm on credit.
The firm has sales of $13,000,000 and inventory of $800,000. This means that their inventory turns over 16.25 times per year (13,000,000 / 800,000 = 16.25). If all of their sales are on credit and are collected within 33 days, then they are paying their suppliers on average 33 days after they sell their inventory.
If you sell to the firm on credit and require payment within 76 days, then you will be waiting an additional 43 days to receive payment. This means that on average, it will take you 56 days to receive payments from the firm. This is longer than the 33 days that the firm takes to pay their suppliers, so you should not sell to the firm on credit.
In addition to the length of time it takes to receive payments, you should also consider the risk of the firm not paying you. The firm has no cash sales, so they are entirely reliant on their customers paying their bills on time. If the firm experiences financial difficulties, they may not be able to pay you for your goods. This is a risk that you should consider before selling to the firm on credit.
To learn more about firms click brainly.com/question/29482295
#SPJ11
1)- What are external & internal forces that may necessitate the need for change in an organisation?
-External: PESTLE analysis
-Internal: SWOT analysis
2) leadership models covered management, which 1 do you think would be the easiest 1 for you to apply, & how would you go about doing that?
External and Internal forces that may necessitate the need for change in an organization are given below: External. Threats SWOT analysis helps an organization to identify the internal forces that can impact the business.
Among the various Leadership models, Servant leadership is considered to be the easiest one to apply. Here, the leader has to prioritize the needs of the followers first, and then focus on achieving the goals. This type of leadership model helps in building strong relationships with the team, improving team spirit, and enhancing the skills of the team members.
For a leader to apply the Servant leadership model, he/she has to follow the following steps: Step 1: Identify the needs of the team Step 2: Help the team members in achieving their goals Step 3: Motivate and Encourage team members Step 4: Improve the communication with team members Step 5: Make decisions after consulting with the team.
To know more about analysis visit:-
https://brainly.com/question/28874113
#SPJ11
Which of the following is the most important benefit of social media advertising? A. The high conversion rates from these ads B. The ability to target ads to specific audiences C. The range of ad formats allowed on each platform D. The very low cost of advertising
The most important benefit of social media advertising is the ability to target ads to specific audiences.
Social media advertising is a digital advertising tactic that involves using social media platforms to promote and advertise a product or service. Social media advertising has become increasingly common over the last decade, with businesses recognizing the advantages that it provides over traditional advertising methods.
Social media advertising's most important advantage is its ability to target ads to specific audiences. Social media platforms allow for advanced targeting options that enable businesses to reach users based on demographics, interests, behaviors, and more. This provides a level of accuracy and specificity that is not possible with traditional advertising methods.
The result of this targeted advertising is higher conversion rates. This is because the users who see these ads are more likely to engage with them and convert them into customers. As a result, social media advertising offers a high return on investment for businesses, making it a cost-effective and efficient advertising strategy.
There are various ad formats available on each social media platform. Still, they are not as important as the ability to target ads to specific audiences and achieve high conversion rates.
Learn more about advertising strategy: https://brainly.com/question/30749428
#SPJ11
Cassandra's retirement fund has an accumulated amount of $40,000. If it has been earning interest at 3.25% compounded monthly for the past 24 years, calculate the size of the equal payments that she deposited at the beginning of every 3 months.
Round to the nearest cent
The size of the equal payments that Cassandra deposited at the beginning of every 3 months is $135.23.
The problem can be solved using the formula for the future value of an ordinary annuity. Given that the accumulated amount is $40,000, the interest rate is 3.25% compounded monthly, and the time period is 24 years (or 96 quarters), we can rearrange the formula to solve for the equal payments. Using this information, the formula becomes:
Payment = Accumulated Amount / [(1 + (interest rate / number of compounding periods))^(number of compounding periods * time period) - 1]
Payment = $40,000 / [(1 + (0.0325 / 12))^(12 * 24) - 1]
Payment ≈ $135.23 (rounded to the nearest cent)
Therefore, Cassandra deposited approximately $135.23 at the beginning of every 3 months.
Learn more about annuities here:
https://brainly.com/question/31852400
#SPJ11
XYZ provided the following financial information: Assets: Cash and marketable securities $29,044 Accounts receivable $142,600 Inventory $215,313 Total current assets $386,957 Net plant and equipment $601,828 Goodwill and other assets $42,422 Total assets $1,031,207 In addition, it was reported that the firm had a net income of: and net sales of: XYZ Balance Sheet As of 12/31/19 Liabilities and Equity: Accounts payable and accruals Short-term notes payable Total current liabilities Long term debt Total liabilities Common stock Retained earnings Total liabilities and equity $156,181 $4,318,620 $154,051 $21,384 $175,435 $155,510 $330,945 $312,890 $387,372 $1,031,207 Calculate the following ratios for this firm (Use 365 days for calculation. Round answers to 2 decimal places, e.g. 52.75.): Current Ratio times Quick Ratio times Average Collection Period days Total Asset Turnover times Fixed Asset Turnover times
The current ratio, quick ratio, average collection period, total asset turnover, and fixed asset turnover ratios can be calculated for XYZ firm using the provided financial information.
Current Ratio: The current ratio measures the firm's ability to meet its short-term obligations. It is calculated by dividing total current assets by total current liabilities. In this case, the current ratio is:
Current Ratio = Total Current Assets / Total Current Liabilities
Current Ratio = $386,957 / $175,435
Current Ratio ≈ 2.21
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent measure of a firm's ability to meet its short-term obligations. It excludes inventory from current assets as it may not be easily converted to cash. The quick ratio is calculated as:
Quick Ratio = (Total Current Assets - Inventory) / Total Current Liabilities
Quick Ratio = ($386,957 - $215,313) / $175,435
Quick Ratio ≈ 0.97
3. Average Collection Period: The average collection period indicates the average number of days it takes for the firm to collect its accounts receivable. It is calculated by dividing 365 days by the accounts receivable turnover ratio. The accounts receivable turnover ratio is calculated as:
Accounts Receivable Turnover = Net Sales / Average Accounts Receivable
Accounts Receivable Turnover = Net Sales / [(Beginning Accounts Receivable + Ending Accounts Receivable) / 2]
Accounts Receivable Turnover = Net Sales / ($142,600 + ? / 2) [Ending Accounts Receivable information is missing]
Average Collection Period = 365 days / Accounts Receivable Turnover
4. Total Asset Turnover: The total asset turnover ratio measures the efficiency of the firm's use of its total assets to generate sales revenue. It is calculated as:
Total Asset Turnover = Net Sales / Total Assets
Total Asset Turnover = Net Sales / $1,031,207
5. Fixed Asset Turnover: The fixed asset turnover ratio measures the efficiency of the firm's use of its fixed assets (net plant and equipment) to generate sales revenue. It is calculated as:
Fixed Asset Turnover = Net Sales / Net Plant and Equipment
Fixed Asset Turnover = Net Sales / $601,828
Please note that the average collection period, total asset turnover, and fixed asset turnover ratios cannot be calculated accurately without the complete information (e.g., ending accounts receivable, net sales).
Learn more about average collection period here:
https://brainly.com/question/30762113
#SPJ11
Beta is a measurement of Acompany's profitability relative to its competitors The standard deviation of a company's stock price A company's diversifable risk The behavior of a company's stock compared to the entire stock market The credit rating on a company's bonds
Beta is a measurement of a company's stock behavior compared to the entire stock market. This measure of risk calculates the volatility of the security when compared to the market as a whole. It also takes into account the systematic risk that can't be eliminated through diversification.
The market has a beta of 1.0, and a beta greater than 1.0 indicates higher volatility than the market, while a beta less than 1.0 indicates lower volatility than the market. A company's diversifiable risk is the risk of losses related to the company's assets or operations and can be reduced through diversification.
The standard deviation of a company's stock price measures the volatility of a stock's returns over a period, indicating the degree of variation in the security's price. The credit rating on a company's bonds is an evaluation of the company's ability to repay its debt obligations. It is not directly related to profitability or stock behavior.
To know more about diversification visit:-
https://brainly.com/question/17155301
#SPJ11
Identifying if an economy is in medium run equilibrium and the necessary central bank action to return the economy to medium run equilibrium Here are values for a hypothetical economy: Y = 1000 un 5% -2% x=1% x = 2% and a table describing this economy in various situations: Situation Y₁ Y C 1 G 1(%) *(%) U(%) x(%) A 1000 1000 700 150 150 5 B 1000 1050 730 170 150 с 1000 950 670 130 150 3 D 1000 950 670 150 130 E 1000 1050 730 150 170 Explain why Situation A is a full medium run equilibrium and Situation B, C, D and E are not a full medium run equilibrium OA. In situation A, output is at potential and unemployment is at its natural rate. In all other situations, this is not true. B. In situation A, output is at potential and unemployment is at its natural rate. In all other situations, the economies are in long-run equilibrium OC. Situation A, where output is at potential and unemployment is at its natural rate, represents a long-run equilibrium. In all other situations, the economies are in a medium-nun equilibrium. Explain why Situation is a full medium run equilibrium and Situation B, C, D and are not a full medium run equilibrium O A In situation A output is at potential and unemployment is at its natural rate. In all other situations, this is not true B. In situation A output is at potential and unemployment is at its natural rate. In all other situations, the economies are in long-run equilibrium OC. Situation A where output is at potential and unemployment is at its natural rato, represents a long-run equilibrium. In all other situations, the economies are in a medium-run equilibrium What is the action to be taken by the central bank to move from Situation to full medium run equilibrium? the nominal policy rate from 2% 0 % to What is the action to be taken by the central bank to move from Situation to tull medium run equilibrium? the nominal policy rate from 4%to% What is the action to be taken by the central bank to move from Situation to full medium run equilibrium? the nominal policy rate from 4% to What is the action to be taken by the central bank to move from Situation to ful medium run equilibrium? the nominal policy rate from 4% to %
The central bank should take the following actions to move the economy from each situation to full medium-run equilibrium:
Situation A is considered a full medium-run equilibrium because output (Y) is at its potential level, and unemployment (U) is at its natural rate. In all other situations (B, C, D, and E), this is not the case.
Situation B: The central bank should decrease the nominal policy rate from 5% to stimulate aggregate demand and encourage economic growth. By lowering interest rates, borrowing costs decrease, which incentivizes businesses and consumers to increase spending and investment. This will help to close the output gap and reduce unemployment.
Situation C: The central bank should increase the nominal policy rate from 2% to reduce inflationary pressures and stabilize the economy. By raising interest rates, borrowing costs increase, which can dampen spending and investment. This will help to bring down aggregate demand and prevent the economy from overheating.
Situation D: The central bank should decrease the nominal policy rate from 4% to stimulate economic activity. Lowering interest rates will encourage borrowing and investment, leading to increased aggregate demand and output. This action will help to close the output gap and reduce unemployment.
Situation E: The central bank should increase the nominal policy rate from 4% to counteract inflationary pressures. Raising interest rates will reduce borrowing and spending, which can help to cool down the economy and prevent excessive inflation. This action will aim to stabilize prices and bring the economy closer to full medium-run equilibrium.
In summary, the central bank's actions should be tailored to the specific economic conditions of each situation. By adjusting the nominal policy rate, the central bank can influence borrowing costs, aggregate demand, and overall economic activity to guide the economy towards full medium-run equilibrium
Option A is the most suitable.
To know more about central bank, visit :
https://brainly.com/question/28024310
#SPJ11
Which of the following is true?
a. All options provided are correct.
b. According to the CAPM, the risk premium on individual assets will be proportional to the risk premium on the market portfolio and the standard deviation of the asset relative to the market portfolio.
c. The market risk premium is the difference between the expected rate of return on a risky asset and the risk-free rate.
d. The slope of the capital allocation line will be flatter when the risk premium is greater than the standard deviation.
e. The risk premium should always be positive to entice a risk averse investor to hold a risky asset.
The correct answer is c. The market risk premium is the difference between the expected rate of return on a risky asset and the risk-free rate.
What is the difference between market risk premium and expected rate of return on a risky asset and the risk-free rate.Option a is incorrect because not all options provided are correct. Option b is incorrect because it describes the Capital Asset Pricing Model (CAPM) incorrectly.
Option d is incorrect because the slope of the capital allocation line will be steeper when the risk premium is greater than the standard deviation, not flatter.
Option e is incorrect because the risk premium can be negative if the expected rate of return on a risky asset is lower than the risk-free rate.
Learn more about risk premium at https://brainly.com/question/32539771
#SPJ4
draw the new supply and demand quantities, and answer who wins at that price of $50 At the price of $50 the supplier is going to win because he will be making more money, than when the equilibrium is at $40.
When the price increases from $40 to $50, the supplier (sellers) is expected to benefit as they would be willing to supply a larger quantity at the higher price.
On the other hand, consumers (buyers) may experience a decrease in their quantity demanded due to the higher price, potentially resulting in a lower overall level of consumer satisfaction. To analyze the situation, we need to consider the supply and demand curves. Let's assume that the equilibrium price is initially $40, but it increases to $50. Here's how the changes in price would affect the supplier and the consumers:
Supplier (Sellers):
At the original equilibrium price of $40, the supplier would be willing to supply a certain quantity, let's say Q1. However, when the price increases to $50, the supplier's incentive to produce more increases. This is because the higher price allows the supplier to generate more revenue per unit sold. Consequently, the supplier would be willing to supply a larger quantity, let's say Q2, at the price of $50. Therefore, the supplier benefits from the higher price as it leads to increased revenue and potentially higher profits.
Consumers (Buyers):
At the original equilibrium price of $40, consumers would be willing to purchase a certain quantity, let's say Q1. However, when the price increases to $50, the higher price may deter some consumers from buying the product. As the price increases, some consumers may find it less affordable or less attractive, leading to a decrease in their quantity demanded. Therefore, at the price of $50, the quantity demanded by consumers may decrease, let's say to Q2.
To know more about supplier, please click on:
https://brainly.com/question/27375800
#SPJ11
The four major decisions corporations are faced with are: 1) the investment decision, 2) the financing decision, 3) the working capital decision, and 4) the payout decision. Now that you are familiar with each of these categories, let’s find some real-world examples. Use some reputable news source (Financial Times, Bloomberg, Wall Street Journal, etc.) to find an article that discusses one of the major decisions. After you find and read your article, write a paragraph about the article and how it relates to one of the four major decisions.
Corporate decision-making gives management guidance on how to effectively use the resources at their disposal to meet the organization's goals. As a result, financial management simply offers a framework for interpretation and analysis of financial data.
Financial choices are categorised as follows:
Decisions about long-term financing
Choices Regarding Short-Term Financing
The decisions above are used to categorise the following. 1. Choosing a long-term investment 2) Capital Allocation/Financing Choice. 3) Dividend Choices Decisions Regarding Working Capital Management A company needs management to make a variety of choices. Regarding capital invested or raised, decisions must be made.
1. Investment Choices. These are also referred to as long-term investment decisions or capital budgeting. Any organization's assets and resources are long-term investments, thus they must be used effectively. A wise investment choice would aid a company in attracting as much interest as feasible.
For an organization to decide how to raise money at a specific time, financial considerations are essential. 2. Financial decisions are essential for an organisation to make in order to decide when to raise cash. 3. The distribution of an organization's profits is governed by dividend decisions. 4. Current Assets - Current Liabilities is used to calculate working capital. Making decisions on working capital is influenced by an organization's immediate objectives.
Learn more about organization, here:
https://brainly.com/question/12825206
#SPJ4
You have won the $1,000,000 Powerball lottery. Unfortunately, the lottery pays you 20 annual payments of $50,000. You will receive your first payment one year from today. The lottery payments are pretty low risk because they are backed by multiple state governments. Thus, you use the risk-free return of 5% to value the payments.
A Powerball lottery winner receives 20 annual payments of $50,00, then the present value of the $1,000,000 Powerball lottery payments is $311,555.5.
The present value of $1,000,000 Powerball lottery payments can be found using the formula for the present value of an annuity.
The formula for present value of annuity is given by;
Present value of annuity = Pmt × [1 – (1 + r)-n] / r Where,
Pmt = $50,000r = 5% = 0.05n = 20
Using the given formula for present value of an annuity, the present value of the Powerball lottery payments is;
$50,000 × [1 – (1 + 0.05)-20] / 0.05$50,000 × [1 – 0.37689] / 0.05$50,000 × 0.62311 / 0.05
=$311,555.5
To know more about annuity visit :
brainly.com/question/23554766
#SPJ11
You are a financial manager at Troy Pty Ltd and evaluating two loans. Standard Bank quotes a nominal annual rate of 11.35% compounded daily. Capitec Bank quotes a nominal annual rate of 12% compounded semi-annually. Required; Which of the two loans should you select to obtain a favorable effective interest rate before-tax cost?
The Standard Bank loan and Capitec Bank loan have the same effective annual interest rate of 11.76%, but Standard Bank loan has a lower nominal annual rate, so it should be selected to obtain a favorable effective interest rate before-tax cost.
To determine which of the two loans should be selected to obtain a favorable effective interest rate before-tax cost, it is necessary to compare the effective interest rates of the two loans. Troy Pty Ltd, a financial manager, is assessing two loans.
Standard Bank has provided a quote for a nominal annual rate of 11.35% compounded daily, while Capitec Bank has quoted a nominal annual rate of 12% compounded semi-annually. The effective annual interest rate formula is used to calculate the effective interest rates.
The formula is as follows:
Effective annual interest rate= [tex](\frac{1 + i}{n})^{n} - 1[/tex]
Where,
i is the annual nominal interest rate and
n is the number of compounding periods.
Using the effective interest rate formula to calculate the effective annual interest rates for each loan, the following calculations can be made:
Effective annual interest rate for Standard Bank loan
[tex]= [(\frac{1 + 0.1135}{365})^{365} - 1][/tex]
= 11.76% (rounded to two decimal places)
Effective annual interest rate for Capitec Bank loan
= [(1 + 0.12/2)2 - 1]
= 11.76% (rounded to two decimal places)
Hence, both loans have the same effective annual interest rate of 11.76%, but the Standard Bank loan has a lower nominal annual rate.
Therefore, the Standard Bank loan should be selected to obtain a favorable effective interest rate before-tax cost.
Learn more about the Interest rate here: https://brainly.com/question/29451175
#SPJ11
