Example of which economic downturn process

Assignment Help Financial Management

Reference no: EM131016044

You are a rancher who purchased cattle last summer. The purchase price was $2,500 for two head of cattle (2 cows). You borrowed $30,000 at 4% interest for 1 year from your bank to purchase 12 head of cattle. After feeding and taking care of your 12 cow herd, you invested about another $250 per cow. Your note has matured at the bank and is due. However, cattle prices are now $1,500 per two head of cattle. This is an example of which economic downturn process? To which stage of a financial crisis does this scenario relate?

Reference no: EM131016044

Questions Cloud

Outstanding amount on an adjustable rate : Assume you have a $150,000 outstanding amount on an adjustable rate loan from BCN bank, which amortizes over 10 years. Your monthly payment is based on 1% over the current 10 year treasury rate or roughly 2.98% APR. Your monthly income allows you to ..

Money purchase pension plan for its eligible employees : Accent, Inc. sponsors a 25% money purchase pension plan for its eligible employees. Carlos earns $200,000, Kevin earns $60,000, Kelly earns $300,000, and Rick, who is ineligible, earns $27,000. What is Accent's required deductible contribution for th..

Calculate the equivalent annual cash flows the project : Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $9.5 million for the next eight years. After the first year, the project can be dismantled and sold for $26.5 million. If the estimates..

Using the perpetual growth method : Suppose the dividends for the Seger Corporation over the past six years were $3.04, $3.12, $3.21, $3.29, $3.39, and $3.44, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk pre..

Example of which economic downturn process : You are a rancher who purchased cattle last summer. The purchase price was $2,500 for two head of cattle (2 cows). You borrowed $30,000 at 4% interest for 1 year from your bank to purchase 12 head of cattle. After feeding and taking care of your 12 c..

Settled an insurance claim : You just settled an insurance claim. The settlement calls for increasing payments over a five-year period. The first payment will be paid one year from now in the amount of $7,000. The following payments will increase by 3.5 percent annually. What is..

Difference in present value if you receive these payments : You are scheduled to receive annual payments of $10,000 for each of the next 24 years. Your discount rate is 8 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of ..

New sports car from muscle motors : You want to buy a new sports car from Muscle Motors for $84,000. The contract is in the form of a 60-month annuity due at an APR of 7.55 percent. What will your monthly payment be?

Statement for april for her mastercard account : Kayla Sampson, an antiques dealer from Great Bend, Kansas, received her monthly billing statement for April for her MasterCard account. The statement indicated that she had a beginning balance of $650, on day 5 she charged $150, on day 12 she charged..

User Account

All Pages