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On January 1, 2019, Joan Campbell borrows $20,000 from Susan Rone and agrees to repay this amount in payments of $4,000 a year until the debt is paid in full. Payments are to be of an equal amount and are to include interest at 12% on the unpaid balance of principal at the beginning of each period. Assuming that the first payment is to be made on January 1, 2020, determine the number of payments of $4,000 each to be made and the amount of the final payment.
What is the future value on December 31, 2026, of 7 annual cash flows of $10,000 with the first cash payment made on December 31, 2019, and interest at 12% being compounded annually?
During the month of March 2020, the following two shocks occurred in the market for petrol.
• Major oil producing countries (most notably Saudi Arabia and Russia) moved to increase their crude oil production. Crude oil is the main input to the production of petrol.
• Road traffic across Australia fell significantly. This is the result of the government's lock-down policies to fight the spread of coronavirus spread.
- Considering the two shocks above, determine how the demand and supply of petrol would change. Clearly explain why such change(s) would occur. (1 + 1 = 2 marks)
- Explain how the demand curve and the supply curve will shift as the result of the shocks above (1 mark)
- Clearly explain how the equilibrium price and quantity of petrol would change as a result. (1 mark)
- For an average petrol station on Glenferrie Road, how would its revenue in March change, in comparison with February (when there was no shock)? Clearly explain your answer (1 mark).
Rising peanut prices have forced peanut butter makers to raise the price of peanut butter from $2 to $3 per jar, causing quantity demanded to fall. In addition, sales of jelly also dropped by 15%. Soon thereafter, makers of chocolate spread dropped its price from $4 to $3 per jar. This resulted in a further decline in peanut butter sales by 20%. a) What is the cross elasticity of demand between peanut butter and jelly (use the midpoint method)? Are these two products complements or substitutes? b) What is the cross elasticity of demand between peanut butter and chocolate spread (use the midpoint method)? Are these two products complements or substitutes?
) Rising peanut prices have forced peanut butter makers to raise the price of peanut butter from $2 to $3 per jar, causing quantity demanded to fall. In addition, sales of jelly also dropped by 15%. Soon thereafter, makers of chocolate spread dropped its price from $4 to $3 per jar. This resulted in a further decline in peanut butter sales by 20%. a) What is the cross elasticity of demand between peanut butter and jelly (use the midpoint method)? Are these two products complements or substitutes? b) What is the cross elasticity of demand between peanut butter and chocolate spread (use the midpoint method)? Are these two products complements or substitutes?
What is the effect of Steve's proposed change on income before taxes in the year of change?
Consider the following facts about mobile money transactions. Currently, MTN and AirtelTigo charge 1% on mobile money transactions up to a total charge of GHS 10 per transaction while Vodafone charges 0%. The E-levy which is currently being discussed is intending to impose an additional 1.5% charge on most electronic transactions.
a) In ordinary language, explain what it means to say the demand for mobile money transactions is price elastic.
b) A deputy minister of finance has suggested that the introduction of the E-levy will reduce mobile money transactions by 24%.1 Based on this and information in the preamble to this question, is the demand for mobile price elastic or price inelastic? Does your answer depend on which mobile network one is using?
c) What does your answer in part (b) imply about the likely amount the government can realize about the E-levy? (Hint: calculations are not needed here. Just explain whether the government will raise a lot of revenue or not much revenue).
Suppose the demand and supply curves for a product is given by
𝑄 = 500 − 2𝑃
𝑄 = −100 + 3𝑃
a) Which is the supply curve and why?
b) Graph the demand and supply curves.
c) Compute the equilibrium price and quantity
d) If the current price is 100, what is the quantity demanded and quantity supplied? How would you describe this situation and what would you expect to happen in this market?
e) Suppose that the demand changes to 𝑄 = 600 − 2𝑃. Find the new equilibrium price and quantity and show this on your graph.
1. You own a farm and grow seasonal products such as pumpkins, squash, and pears. Most of your business revenues are earned during the months of October to December. The rest of your year supports the growing process, where revenues are minimal, and expenses are high. In order to cover the expenses from January to September, you consider borrowing a short-term note from a bank for $300,000. Based on this scenario, please complete the following:
Research the lending practices of a local bank.
Determine the interest rate charged for a $300,000 loan.
Determine the collateral the bank requires to secure the loan?
Determine your overall payback amount if you were to repay the loan in less than one year.
conducting your research, would you consider borrowing the money?
What positive and negative outcomes accompany borrowing the money?
2. How much did you know about interest and borrowing money before starting Unit 6?
3. What have you learned about interest and borrowing money in this unit that may help you?
A common practice for government entities, particularly schools, is to issue short-term (promissory) notes to cover daily expenditures until revenues are received from tax collection, lottery funds, and other sources. School boards approve the note issuances, with repayments of principal and interest typically met within a few months. The goal is to fully cover all expenses until revenues are distributed from the state. However, revenues distributed fluctuate due to changes in collection expectations, and schools may not be able to cover their expenditures in the current period. . Based on this information, compose a paper that addresses the following:
- What would you do if you found your school in this situation?
- Would you issue more debt? Explain.
- Are there alternatives? Explain.
- What are some positives and negatives to the promissory note practice?
- Please explain at leasttwo positivesand at leasttwo negatives.
The demand fuction p=4500-15Q2 and the supply function p=5Q2+2500. Determine the consumer and producer surplus
