User Account

All Pages

Find the real value of this amount and add it to the rental

Assignment Help Accounting Basics
Reference no: EM132715646

Question - Consider the case of an individual who lives for two periods, earns an income nominal of $ 10,000 in each of them, and has an initial and final amount of null assets. The nominal interest rate, R, of loans in dollars is 12% and the rate of expected inflation between the two periods is 8%. Suppose the price level is 1 in the first period.

Required -

a) What is the real value of the rent in period 1?

b) What is the maximum amount of dollars that he could borrow in period 1? Find the real value of this amount and add it to the rental value of period 1 to find the maximum amount of (actual) consumption possible in this period.

c) What is the price level in period 2? What is the real value of the income from period 2?

Reference no: EM132715646

Questions Cloud

Calculate the sales volume in dollars needed : He is worried that per-tonne selling prices will decline by 10% and variable costs will increase by $40 per tonne. Calculate the sales volume in dollars needed
Calculate the firm gross profit margin of the company : Aurora Lighting Ltdhas the following income statement items: sales of $12000 000; operating expenses of $1500 000; cost of goods sold of $4000 000
What is the accumulated depreciation for the machine : The original cost of the machine is $20 million. What is the accumulated depreciation for the machine when it was sold (in millions)
Calculate the monthly standard deviation : Download to a spreadsheet the last three years of monthly adjusted stock prices for Coca-Cola (KO), Citigroup (C), and Pfizer (PFE).
Find the real value of this amount and add it to the rental : What is the maximum amount of dollars that he could borrow in period 1? Find the real value of this amount and add it to the rental value of period 1
Calculate the net present value of planned investment : The director of XYZ Fried Chicken is evaluating a proposal to open a fast food restaurant in a university campus. The restaurant will cost $14.5 million to open
Find the original cost of the asset : A salvage value of $6,000. If the machine is sold for $16,000 and a gain of $4,000 is recognized, find the original cost of the asset
Firm current capital structure weights : What are the firm's current capital structure weights? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Analyze the factory overhead variance using two variance : Mila Co. budgeted factory overhead at P600,000 based on budgeted 15,000 labor hours. Analyze the factory overhead variance using three variance method.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd