The cash proceeds available to the borrower is $215,000. Since the note is noninterest-bearing, there is no calculation required to find the cash proceeds available to the borrower.
The cash proceeds available to the borrower on a noninterest-bearing note are equal to the face value of the note, which is the maturity value of the note. In this case, the maturity value of the note is $215,000.
The stated rate of 13.5% is the annual percentage rate (APR) that is used to discount the future value of the note to the present value. Since the note is noninterest-bearing, the cash proceeds available to the borrower are equal to the face value of the note, which is $215,000.
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Which economic tool would most likely be used as part of a contractionary
monetary policy?
A. Lowering the reserve requirement
O B. Raising interest on reserves
C. Buying treasury securities
D. Reducing the discount rate
SUBMIT
Answer:
O B. Raising interest on reserves
Explanation:
The Federal Reserve expects banks to keep a percentage of customer deposits as reserves. The reserves cater to both the normal and unexpected withdrawals. The Federal Reserve (Fed) also uses reserve requirements as a monetary policy tool.
Interest on reserves is one of the monetary policy tools that the Fed uses regularly. The Fed pays interest on any excess reserves held by the banks. Increasing the interest paid on reserves encourages banks to hold more money. Decreases the interest prompts the banks to lend out more. Contractionary monetary policies are measures aimed at decreasing the money supply in the economy. Increasing interest on reserves increases money held in the banking sectors, thereby slowing down money circulation.
Answer: B. Raising interest on reserves
Explanation:
Just got it right!!!
If an engine has a Base Timing of 10° BTDC, but is currently firing at 5°, which is it
Based on the principle of starting engine, the correct answer is turbocharged engine
Turbocharged engineStarting a turbocharged engine, the timing is reduced to compel the peak starting pressure later in the combustion stroke.In conclusion, we can conclude that the correct answer is turbocharged engine.
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what is engineering?
Answer:
Engineering is an occupation with an extremely wide reach. The term 'engineering' covers many fields and, by extension, many skills. Engineers are scientists, inventors, designers, builders and great thinkers and improve the state of the world, expand human capability and make people's lives safer and easier.
Engineering skills include:
The scientific methodSocial, cultural and economic awareness MathematicsBiology, chemistry, physics and other areas of scienceCreativityTeamworkWhere science is involved with designs, buildings, use of engines, machines, and structures.Company A is unable to make the December 31, 2019 interest payment. Company A is a calendar year company and accrued the 2019 interest On 1/1/2020 Company A agrees to transfer land and a building to Company B in full settlement of the note FMV 1/1/2020 $100,000 Land $250,000 Building Original Cost to Company A $75,000 land $300,000 Building Accum Dep 1/1/2020 $0 land $100,000 Building Book Value 1/1/2020 $75,000 land $200,000 Building What is the incremental impact on earnings for Company A from the settlement?
Answer:
The incremental impact on earnings for Company A from the settlement will give a POSITIVE result.
Explanation:
Without mincing words let's dive straight into the solution to the question above. So, we are given the following parameters which is going to be of help in solving this question.
=> The amount issued by company A = $500,000, the interest = 10%.
(1). For land:
FMV 1/1/20 = $100,000, Cost to Company A = $75,000 , Building Accum Dep 1/1/2020 = $0, and Book Value 1/1/2020 = $75,000.
(2). For Building:
FMV 1/1/20 = $250,000 Original Cost to Company A = $300,000, Building Accum Dep 1/1/2020 =$100,000 and Book Value 1/1/2020 =$200,000.
The FMV 1/1/20 for both the building and the land is given below as;
FMV 1/1/20 = $250,000 + $100,000 = $350,000.
At 1/1/20, the total amount that is being paid = 500,000 + 10/100 × 500,000 = $550,000.
Therefore, ($550,000 - $350,000) is the benefit. That is $200,000 is the benefit.
Teams have better communication than other workers because they get to
a. Know each other better
b. Attend commurication seminars
C. Earn extra benetits packages
d. Use better telephones
Myriad Solutions, Inc. issued 12% bonds, dated January 1, with a face amount of $470 million on January 1, 2021, for $420,208,482. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity the market yield is 14%. Interest is paid semiannually on June 30 and December 31. 1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2021
The net amount of the liability Myriad Solutions, Inc. would report in its balance sheet at December 31, 2021, would be $437,925,273.
To calculate the net liability, we need to consider the face amount of the bonds and the discount/premium amortization. Given that the bonds were issued for $420,208,482, which is less than the face amount of $470 million, it implies a discount.
The discount is calculated by subtracting the issue price from the face amount: $470,000,000 - $420,208,482 = $49,791,518.
Since the bonds were issued on January 1, 2021, the time elapsed by December 31, 2021, is one year. Using the effective interest method, the discount is amortized over the bond's remaining life of 10 years. The annual amortization can be calculated as the difference between the interest expense (calculated using the market yield of 14%) and the actual interest payment of $470,000,000 * 0.12 = $56,400,000.
Assuming semiannual interest payments, the net liability on the balance sheet at December 31, 2021, would be the face amount minus the unamortized discount. The unamortized discount is calculated as the total discount minus the accumulated amortization for one year.
Net Liability = Face Amount - Unamortized Discount
Unamortized Discount = Total Discount - Amortization for One Year
Total Discount = $49,791,518
Amortization for One Year = 2 * $56,400,000 - ($470,000,000 * 0.14) = $92,400,000
Unamortized Discount = $49,791,518 - $92,400,000 = -$42,608,482 (negative indicates a premium)
Net Liability = $470,000,000 - (-$42,608,482) = $437,925,273
Therefore, the net liability that Myriad Solutions, Inc. would report in its balance sheet at December 31, 2021, would be $437,925,273.
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Mr. Benjamin salgado invested his savings to salgado and delgado construction corporation amounting to php500,000 in cash and equipment worth php250,000.00
Answer:
Mr. Benjamin has invested total php 750,000 in Salgado and Delgado construction corporation.
Explanation:
The investment made by Mr. Benjamin in cash and as an equipment both will be considered as investment made in the company. The percentage of stake will be calculated by considering both forms of investments. Mr. Benjamin will have controlling stake in Salgado and Delgado corporation. The company can receive dividends according to percentage of stake declared by the company.
On November 1, 2020, Fashion Supplies, Inc. purchased 2,000 shares of Everyday Couture, Inc. for $30,000. Everyday Couture shares are actively traded. The per share stock prices were:
Share Price
November 1, 2020 $15.00
December 15, 2020 14.50
December 31, 2020 16.00
Fashion Supplies’ shares represent a 1% interest in Everyday Couture. Fashion Supplies does not have significant influence over Everyday Couture.
On December 15, 2020, Fashion sold 500 shares of Everyday Couture at the trading price. Fashion Supplies adjusts the Fair Value Adjustment Account at year-end only.
What is the net impact on the income statement for the year ended December 31, 2020, related to all of the Fashion Supplies’ investment activities?
Group of answer choices
O $1,250 gain
O $ 250 loss
O $1,000 gain
O $1,250 loss
The net impact on the income statement for the year ended December 31, 2020, related to all of Fashion Supplies' investment activities is a $1,250 gain, The correct option is A.
Determine the net impact on the income statement, we need to calculate the gain or loss from the sale of shares and adjust for the fair value adjustment.
On November 1, 2020, Fashion Supplies purchased 2,000 shares of Everyday Couture for $30,000, representing a 1% interest in the company.
On December 15, 2020, Fashion Supplies sold 500 shares of Everyday Couture. To calculate the gain or loss from the sale, we need to compare the selling price to the cost basis.
The selling price per share on December 15, 2020, was $14.50. Therefore, the proceeds from the sale of 500 shares would be 500 * $14.50 = $7,250.
The cost basis of the 500 shares sold is calculated based on the initial purchase price and the percentage interest owned. The cost per share is $30,000 / 2,000 = $15.
The cost basis of the 500 shares sold would be 500 * $15 = $7,500.
The gain or loss from the sale is the difference between the proceeds and the cost basis: $7,250 - $7,500 = -$250 (a loss of $250).
However, the question states that Fashion Supplies adjusts the Fair Value Adjustment Account at year-end only. Therefore, any change in the fair value of the remaining shares is not recognized on the income statement.
As a result, the net impact on the income statement is only the loss from the sale of shares, which is $250. Thus, the correct answer is that there is a $250 loss.
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Discuss whether or not consu,er benefit more from a market economic system or mixed economic system
Answer:
It just depends on which characteristics the mixed economy emphasizes. For example, if the market has too much freedom, it can leave the less competitive members of society without any government support. Central planning of government industries also creates problems.
The publisher of Celebrity Living claims that the mean sales for personality magazines that feature people such as Megan Fox or Jennifer Lawrence are 1.5 million copies per week. A sample of 10 comparable titles shows a mean weekly sales last week of 1.3 million copies with a standard deviation of 0.9 million copies.
Answer and Explanation:
The computation is shown below:
For determining each part first we have to do the following calculations
Critical value of t = 3.250
Null hypothesis = 1.5
Alternative hypothesis ≠ 1.5
Population mean \(\mu\) = 1.5
Sample mean \(\bar X\)= 1.30
Sample size \(n\) = 10.00
Sample standard deviation \(s\) = 0.900
Standard error of mean is
\(s_x = \frac{s}{\sqrt{n} }\)
\(= \frac{0.900}{\sqrt{10.00}}\)
= 0.2846
Test static is
\(t = \frac{x - \mu}{s_x}\)
\(= \frac{1.30 - 1.5}{0.2846}\)
= -0.703
a. The null hypothesis is
μ = 1.5
Alternate Hypothesis is
μ ≠ 1.5
b. reject \(H_o\) if t is not between
-3.250 and 3.250
c. The value of the test statistic is
t = -0.703
(as we have computed above)
d. fail to reject \(H_o\) as this data does not contradict the publisher claim
how can a business meet customer needs
What are some of the steps that led to creating eHarmony?
What advantages did eHarmony have because it was not the first entrant into the online dating market space?
What disadvantages might there be as a late entrant into a market? Did eHarmony experience any or all of these? Which?
Why did Greg Forgatch believe that eHarmony’s first radio ad worked so well?
What key advertising concepts has eHarmony applied?
Answer and Explanation:
1. Eharmony was born out of Neil Clark Warren's(clinical psychologist and marriage counselor) research work on the psychology of satisfactory relationships through weighing compatibility by certain notable characteristics in individuals. It was on this basis that he set up eharmony which matches people based on principles from his research
2. Eharmony matches people using Neil's principles and this sets him apart from other dating sites
3. It worked so well because there was evidence that it Neil's matching couples model works because real couples were involved in the ad
4. Key advertising concepts was the involvement of real couples who started their relationship through eharmony showing that it actually works
returns earned over a given time period are called realized returns. historical data on realized returns is often used to estimate future results. analysts across companies use realized stock returns to estimate the risk of a stock. five years of realized returns for celestial crane cosmetics inc. (crane cosmetics) are given in the following table:
Measuring standalone hazard the use of realized facts Returns earned over a given time period are referred to as realized returns.
Historical statistics on realized returns is often used to estimate future results. Analysts across organizations use realized stock returns to estimate the chance of a stock.
The complete return for a stock consists of both capital gains/losses and dividend income, whilst the nominal return for a inventory only depicts its rate change. Investors must additionally reflect onconsideration on whether the chance worried with a certain funding is something they can tolerate given the real price of return.
What is the common return on stocks?The inventory market has again an common of 10% per 12 months over the previous 50 years. The past decade has been terrific for stocks. From 2012 via 2021, the average stock market return was 14.8% yearly for the S&P five hundred index (SNPINDEX: ^GSPC).
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https://brainly.com/question/27723330#SPJ4What do you understand by the term social structure? Explain social roles in the context of social structure and quote real life examples to discuss the concepts for role conflict, role strain and role exit.
Answer:
Social structure is the arrangement in the society where people live and interact together in the society.
Explanation:
Social structure in humanism is considered to be the specific and stable plan of the organizations where the people in general public collaborates and lives respectively. The social structure is often treated together with the very idea of the social change that tries to manage the powers of the people which changes the social structure as well as the association of the society.
Social structure helps the individuals to sort out their current circumstances and it limits which characterize the insiders and the outcasts. Social structure restricts certain alternatives and spots us in the discretionary classes that is not based on the personal preferences.
Karl Marx once stated how the monetary creation is coordinated by central main part of the general public.
Can people boost their points on their questions?
Answer:
Yes.
Explanation:
For my personal finance class
Which of the following is an example of the paradox of value?
a. You might choose an inflatable raft over a luxury car if you are adrift at sea
b. You might choose a diamond over a bottle of water if you really love dressing up
c. You might choose a hamburger over a veggie burger at a fast-food restaurant
d. You might choose a pair of socks over a hat if you are feeling cold
Answer:
b because diamonds dressing up
I NEED THIS FAST PLEASE
Due today!
Which of the following scenarios best reflects a list price?
A. Earrings that are buy one get one free
B. A bike that is half off because of a holiday promotion
C. Socks that have a suggested retail value of $39.99
D. A dress that is 25% off
Answer:
C. Socks that have a suggested retail value of $39.99
The following scenarios best reflect a list price of Socks that have a suggested retail value of $39.99. Thus the correct option is C.
What is the list price?The specified price at which some is advertised for sale through a specific channel, such as a factory, a retail store, a catalog, or a retail, wholesale, or distributor website is The list price.
The difference between the listing price and the sale price of a property is known as the "listing price," also referred to as the "asking price."The highest price at which a thing may be sold is its list price.
The cost at which a seller decides to put their house on the market is known as the list price. You can specify a particular range of costs and make them exclusive to a certain clientele using a pricing list.
Therefore, option C is appropriate.
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which of the following would make a person well suited for entrepreneurship?
a. prefers to follow others on projects
b. likes making decisions
c. doesn't like people
d. likes to work regular hours
APEX
Entrepreneurs likes making decisions because they are their own boss. Option (b) is correct.
What do you mean by Entrepreneurship?Entrepreneurship is the practice of operating a business with a fresh concept or in a novel approach, ultimately benefiting the client or the consumer. A novel product or service can represent a new idea in a business.
Self-motivation is among the most crucial characteristics of entrepreneurs. Pushing oneself is necessary if you want to succeed. Because you are your own boss as an entrepreneur, it can occasionally be challenging to begin rolling without external pressure.
Therefore, Option (b) is correct. Making decisions by their own would make a person well suited for entrepreneurship.
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Whose permission do you need to write or arrange pieces that are Traditional or in the Public Domain? I said copyright owner but my teacher says I’m wrong
Answer:
Explanation:
She's right, but you have a nice thought. It is always a good idea to try to give credit where credit is due.
Public Domain refers to written material that no one has a lien on. No one owns the copywrite. No one holds any claim on the material at all. So there is no need to try and get permission because no one is listed to get the permission from.
If you have a cell phone that does just about everything but make coffee in the morning, you can download an app called free books. Some are very good. They are all in public domain.
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost (and ATC) of mining diamonds is constant at $1,000 per diamond, and the demand for diamonds is described by the following schedule:
Table 2: Demand for Diamonds
Price Quantity
$8,000 5,000
7,000 6,000
6,000 7,000
5,000 8,000
4,000 9,000
3,000 10,000
2,000 11,000
1,000 12,000
(a) If there were many suppliers of diamonds, what would be the price and quantity?
(b) If there were only one supplier of diamonds, what would be the price and quantity?
(c) If Russia and South Africa formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be South Africa's production and profit? What would happen to South Africa's profit if it increased its production by 1,000 while Russia stuck to the cartel agreement?
(d) Use your answers to part (c) to explain why cartel agreements are often not successful.
(a) the market would reach equilibrium at a price of $3,000 and a quantity of 10,000 the intersection of the demand, marginal cost curves, where quantity supplied equals the quantity demanded.
(b) If there were only one supplier of diamonds, what would be the price and quantity?(b) If there were only one supplier of diamonds, the supplier would have a monopoly and would set the price at the profit-maximizing level, which is the price where marginal revenue equals marginal cost. In this case, that would be $3,000 per diamond, as at this price, the quantity demanded would equal the quantity supplied. The quantity would be 10,000.
What would happen to South Africa's profit if it increased its production by 1,000 while Russia stuck to the cartel agreement?(c) If Russia and South Africa formed a cartel, they would collude to set a higher price, such as $6,000, in order to increase their profits. The quantity would decrease to 7,000. If the countries split the market evenly, South Africa would produce and sell 3,500 diamonds, earning a profit of $3,500,000 (3,500 x $1,000). If South Africa increases its production by 1,000 while Russia sticks to the cartel agreement, South Africa's profit would decrease to $2,000,000 (2,500 x $1,000) as it would have to sell the additional diamonds at the cartel price, earning only $6,000 per diamond instead of $1,000.
Use your answers to part (c) to explain why cartel agreements are often not successful.(d) Cartel agreements are often not successful because members have incentives to cheat on the agreement by increasing production to capture a larger share of the market. This can lead to a decrease in the overall price and profits for all members, as seen in the example above with South Africa increasing production. Additionally, new entrants may enter the market, breaking the cartel's control over the market. Furthermore, governments often intervene to prevent the formation of cartels or to break them up, as they can lead to higher prices for consumers and can restrict competition in the market.
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In addition to the primary activities, what other required information must be presented in a statement of cash flows? (Select all that apply.) a-noncash investing and financing activities b-a reconciliation of operating income to operation cash flows c-a reconciliation of the net increase or decrease in cash with the change in the cash balance d-a reconciliation of operating income to net income
In addition to the primary activities, a statement of cash flows must also include information about noncash investing and financing activities(a&c).
This refers to transactions that do not involve the actual inflow or outflow of cash, such as the acquisition of assets through the issuance of debt or stock. Furthermore, the statement should present a reconciliation of the net increase or decrease in cash with the change in the cash balance.
This provides a clear understanding of the factors contributing to the change in cash during the reporting period.
The options b (a reconciliation of operating income to operation cash flows) and d (a reconciliation of operating income to net income) are incorrect because they refer to other reconciliations that are not required in a statement of cash flows.
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How does the Fed’s decisions to increase or decrease discount rates or reserve requirements affect you as a consumer and potential borrower of money
The Federal Reserve's decisions to increase or decrease discount rates or reserve requirements can have a significant impact on consumers and potential borrowers.
When the Fed increases the discount rate, it makes borrowing more expensive for banks, which can lead to higher interest rates for consumers and businesses. This can discourage borrowing and reduce consumer spending, which can slow down economic growth. On the other hand, if the Fed lowers the discount rate, it can make borrowing cheaper and stimulate consumer spending and economic growth.
Changes in reserve requirements can also affect borrowing and lending activities. When the Fed increases reserve requirements, it reduces the amount of money that banks can lend, which can lead to higher interest rates and less borrowing. Conversely, when the Fed lowers reserve requirements, it increases the amount of money that banks can lend, which can lead to lower interest rates and more borrowing.
Overall, the Fed's decisions on discount rates and reserve requirements can impact the availability and cost of credit for consumers and Shareholder businesses, which can in turn affect spending, investment, and economic growth.
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Which represents the greatest acceleration?
200 m/s
200 cm/s2
0.020 km/s2
0.002 km/s2
Answer:
(3) 0.020km/s²
Explanation:
The option with greatest acceleration is the one with greatest magnitude.
To do this, we have to analyse each if the given options.
1. 200m/s.
This doesn't represent acceleration because acceleration is not measured in m/s. Rather, this option is a measure of velocity..
2. 200 cm/s²
[Convert to m/s²]
= 200 / 100 m/s²
= 2 m/s²
3. 0.020 km/s²
[Convert to m/s²]
= 0.020 * 1000m/s²
= 20m/s²
4. 0.002 km/s²
[Convert to m/s²]
= 0.002 * 1000 m/s²
= 2m/s²
By comparison options 1 through 4, option (3) has the highest magnitude of acceleration.
Hence, 0.020km/s² is the highest acceleration
6. By being too involved in the business operation, limited partners can lose their limited liability status.
TRUE OR FALSE?
7. If Firm A's business is to obtain savings from individuals and then invest them in financial assets issued by other firms or individuals, Firm A is a financial intermediary.
TRUE OR FALSE?
True: By being too involved in the business operation, limited partners can lose their limited liability status.
True: If Firm A's business is to obtain savings from individuals and then invest them in financial assets issued by other firms or individuals, Firm A is a financial intermediary.
True. Limited partners in a partnership have limited liability, which means their personal assets are protected from business liabilities. However, if a limited partner becomes too involved in the day-to-day operation of the business, they risk losing their limited liability status. This is because active involvement in business decisions and operations can blur the line between limited partners and general partners, who have unlimited liability. Limited partners should maintain a passive role and avoid participating in management activities to preserve their limited liability protection. Hence, it is true that limited partners can lose their limited liability status if they become too involved in the business operation.
True. If Firm A's primary business is to collect savings from individuals and then invest those funds in financial assets issued by other firms or individuals, it functions as a financial intermediary. Financial intermediaries, such as banks, mutual funds, or investment companies, act as intermediaries between savers and borrowers, channeling funds from individuals or entities with excess savings to those in need of capital. These intermediaries play a crucial role in the financial system by facilitating the flow of funds and providing financial services. Hence, it is true that if Firm A's business involves obtaining savings and investing them in financial assets issued by others, it operates as a financial intermediary.
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a company has moved to aws recently. which of the following aws services will help ensure that they have the proper security settings
Amazon Inspector is an automated security assessment service that aids in enhancing the compliance and security of AWS-based applications.
You can control users, groups, and roles' secure access to AWS services and resources with AWS Identity and Access Management (IAM).With IAM, you can specify who can access which services and resources, under what conditions, and create and manage fine-grained access controls with permissions.
Which AWS feature or service will aid the business in its migration?
By gathering usage and configuration information about your on-premises servers, AWS Application Discovery Service (ADS) assists you in planning your migration to AWS.
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Here's the revenue and expenses for the month. Calculate whether Mia had a profit or loss.
MAY ACCOUNTS
CHECKING
$860.00
REVENUE
FIXED EXPENSES
VARIABLE EXPENSES
CARD PURCHASE
$300
SAVINGS
$1,006.68
DOG FOOD
CAT FOOD
PET TREATS
PET SUPPLIES
$3,650
$2,850
$1,650
$1,800
RENT
$2,000
SALARIES
$2,000
UTILITIES
$1,000
PRODUCT STOCK $4,000
TOTAL
$9,950
TOTAL
$9,000
TOTAL
$300
ENTER MIA'S TOTAL PROFIT/LOSS FOR THE MONTH IN THE BOX BELOW, THEN CLICK SUBMIT.
$
SUMIT
Answer:
Loss
Explanation:
Because she started with 860.00 then ended with 300
Answer:
350
Explanation:
I guessed
how do imagination and creativity helps in innovating product?
A+borrower+takes+out+a+30-year+mortgage+loan+for+$100,000+with+an+interest+rate+of+6%+plus+4+points.+what+is+the+effective+annual+interest+rate+on+the+loan+if+the+loan+is+carried+for+all+30+years?
The effective annual interest rate on the loan considering both the interest rate and the points is 3.85% if the loan is carried for all 30 years.
To calculate the effective annual interest rate on the loan, to take into account both the stated interest rate and the points paid upfront.
Given:
Loan amount: $100,000
Interest rate: 6% per year
Points: 4 points (4% of the loan amount)
To calculate the effective annual interest rate, we'll consider the total amount borrowed (including points) and the total interest paid over the 30-year period.
Calculate the total loan amount after adding points:
Loan amount with points = Loan amount + (Points ×Loan amount)
= $100,000 + (0.04 × $100,000)
= $100,000 + $4,000
= $104,000
Calculate the total interest paid over 30 years:
Total interest = Loan amount with points - Loan amount
= $104,000 - $100,000
= $4,000
Calculate the effective annual interest rate:
Effective annual interest rate = Total interest / Loan amount with points
= $4,000 / $104,000
calculate the effective annual interest rate on the loan:
Effective annual interest rate = $4,000 / $104,000 ≈ 0.0385
To express the effective annual interest rate as a percentage, multiply by 100:
Effective annual interest rate =0.0385 ×100 = 3.85%
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What does making a good decision mean?? How can I make a good decision?
Answer:
A good decision is one that is made deliberately and thoughtfully, considers and includes all relevant factors, is consistent with the individual’s philosophy and values, and can be explained clearly to significant others.
Ways to make good decision:
Set Aside Time to Reflect on Your MistakesStop Thinking About the ProblemFrame Your Problems In a Different WayIdentify the Risks You TakeTake Note of Your OverconfidenceTalk to Yourself Like a Trusted FriendLabel Your EmotionsAcknowledge Your ShortcutsConsider the OppositeCain Company reports net cash provided by operating activities of $35,000. It also reports the following information under “Adjustments to reconcile net income to net cash provided by operating activities” on its statement of cash flows (using the indirect method).
It can be seen from the solutions given that Cain's net income is $24,000.
Here is the solution:Net income = Net cash provided by operating activities - Adjustments
= $35,000 - $6,000 - $10,000 + $4,000 + $7,000 + $4,000
= $24,000
Therefore, Cain's net income is $24,000.
Here is a breakdown of the adjustments:
To determine cash flow from operations, it is necessary to include the gain on equipment sales in the net income as it is a non-cash entry.
A rise in accounts receivable implies that customers are prolonging payment of their invoices, resulting in decreased cash flow from the company's activities.
The depreciation expense is classified as a non-cash expense, hence it must be included in the calculation of cash from operations by adding it back to the net income.
A decrease in inventory indicates that the company is experiencing faster turnover of its inventory, leading to increased cash flow generated by its operations.
A rise in prepaid expenses denotes that the company is channeling more funds towards prepaid expenditures like insurance and rent, implying a reduced cash inflow from its operational activities.
A decline in the amount of wages that the company owes indicates that it is not promptly compensating its workforce. Consequently, this implies that the company's operational cash flow is reduced.
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