Managers often use the real interest rate to help them decide whether to take on a new
Question:
REQUIRED
A. What two factors are included in the real interest rate?
B. What economic factors could affect the two aspects you identified in part (A)? List as many factors as you can.
C. Discuss how certain you can be that interest rates will remain constant over the life of a project.
D. Does the time length of a project affect your answer to part (C)? Why or why not?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 33% (15 reviews)
A The real rate includes both a risk free rate and a risk premium B The risk free rate is affected b...View the full answer
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
Question Posted:
Students also viewed these Managerial Accounting questions
-
What factors cause the real interest rate to change?
-
Why does the real interest rate affect planned aggregate expenditure? Give examples.
-
What is the real interest rate paid on a credit card loan earning 18 percent nominal interest per year, if the rate of inflation is a. zero? b. 4 percent? c. 8 percent? d. 15 percent? e. 20 percent?
-
Determine whether the following code fragment takes linear time, quadratic time, or cubic time (as a function of \(n\) ). for (int i = 0; i < n; i++) for (int j = 0; j < n; j++) j) C[i][j] 1.0; if (i...
-
List at least three ways in which social influences affect consumer behavior.
-
Discuss the concept of economic duality as used in REA. How does this relate to double entry accounting?
-
The price of a share is \(\$ 100\). During the following six months the price can go up or down in a \(10 \%\) per month. If the risk-free interest rate is \(8 \%\) per year, continuously compounded,...
-
Numerous studies have shown that watching too much television hurts school grades. Others have argued that television is not necessarily a bad thing for children (Mail Online, July 18, 2009). Like...
-
The interest rate on one-year Treasury bonds is 2%, the rate on two-year T-bonds is 2.5%, and the rate on three-year T-bonds is 3%. Using the expectations theory, compute the expected one-year...
-
The Daytona 500 is a 500-mile automobile race held annually at the Daytona International Speedway in Daytona Beach, Florida. The following crosstabulation shows the automobile make by average speed...
-
The local homeless shelter received a large donation from a wealthy benefactor and asked you to review its decision-making process for the proposed investment choice. The shelters financial advisor...
-
Green Jade Resorts, a Singapore company that owns and operates golf resorts, has hired you to analyze its investment opportunities in the Southwest United States and Mexico. The company managers have...
-
Novak Corporation is preparing its 2020 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each...
-
Which statement is true? a) All monopolists products have close substitutes. b) Most fi rms in the United States are monopolies. c) There are no monopolies in the United States. d) A monopoly is a...
-
If food were free in your school cafeteria, you would keep eating until _____. a) your total utility was zero. b) your marginal utility was zero. c) your consumer surplus was zero. d) you were sick.
-
A firm will operate in the short run as long as _______ are greater than __________; a firm will operate in the long run as long as ____________are greater than ________.
-
In the United States, interest income received by corporate bondholders has been taxed at ordinary income rates, whereas capital gains and dividends received by shareholders have often been taxed at...
-
Price gouging will _____. a) raise consumer surplus b) lower consumer surplus c) have no effect on consumer surplus
-
The following problems deal with translating from MIPS to C. Assume that the variables f, g, h, i, and j are assigned to registers $s0, $s1, $s2, $s3, and $s4, respectively. Assume that the base...
-
Following is the current balance sheet for a local partnership of doctors: The following questions represent independent situations: a. E is going to invest enough money in this partnership to...
-
In Example 8.3 , we introduced a simple quantum system involving an electrically charged, spin- \(1 / 2\) particle immersed in a uniform magnetic field. In this exercise, we will continue the study...
-
Rhonda Heninger is a well-known software engineer. Her specialty is writing software code used in maintaining the security of credit card information. Heninger is approached by the Electronic...
-
Computing cost of goods manufactured and cost of goods sold. The following are account balances relating to 2013 (in thousands): Property tax on plant building.............. $ 3,600 Marketing,...
-
The Howell Corporation has the following account balances (in millions): Prepare an income statement and a supporting schedule of cost of goods manufactured for the year ended December 31, 2013. For...
-
In Lorenzo, the Supreme Court extended liability to those who disseminate false and misleading statements with the intent to defraud, even if they are not the "maker" of the statement under the...
-
How do prokaryotic organisms utilize diverse metabolic strategies, such as phototrophy, chemolithotrophy, and heterotrophy, to obtain energy and nutrients, and what are the ecological implications of...
-
8/27/17 University Battles Fetal-Tissue Law BY JACOB GERSHMAN A legal challenge to an Indi- ana law that criminalizes re- search using the remains of aborted fetuses could deter- mine how much power...
Study smarter with the SolutionInn App