Which of the following is not one of the four fundamental factors that affect the cost of money? and why?
Production opportunities
time preferences for consumption
risk
liquidity
inflation
liquidity is not one of the four fundamental factors that affect the cost of borrowings because it is not Quantitative in nature you can not quantify the liquidity on particular security so liquidity is not one of four fundamental factors that affect the cost of money.
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Which of the following is not one of the four fundamental factors that affect the cost...
Which of the following is not one of the four fundamental factors affecting the cost of money? Production opportunities Time preferences for consumption Risk Local government taxes Risk represents the probability that an investment will generate a low or negative return in a financial market (TRUE/FALSE)?_____________________ Inflation tends to push the prices of goods and services downward (TRUE/FALSE)? Suppose your friend chooses to spend $4,500 out of her current income of $10,000 and save the rest with a bank hoping to earn...
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6. Factors and policies that affect the cost of money Aa Aa Warren needs to borrow money to become a software engineer. Suppose that compensation of software engineers is expected to increase. Assuming nothing else changes, this means that if Warren borrows now, his cost of borrowing money is expected to due to the following factor: O Rising compensation of software engineers provokes inflation O Rising benefits of becoming a software engineer O Decreasing preferences for...
8. Factors that affect the cost of capital equation Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm's control? Check all that apply. Tax rate The inflation rate от The firm's capital budgeting decision rules The impact of a firm's cost of capital on managerial decisions Consider the following case: Lancashire Railway Company (LRC) has two divisions, L and H. Division L is the company's low-risk...
Which of these factors affect(s) the demand for loanable funds? Items (7 items) (Drag and drop into the appropriate area below) increased investor confidence diminished investor confidence positive time preferences a technological advance that increases capital productivity more people entering retirement consumption smoothing increased for incomes Categories Affects demand Doesn't affect demand Drag and drop here Drag and drop here
7. Factors that affect the cost of capital equation Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm's control? Check all that apply. Interest rates in the economy The performance of index funds, such as the S&P 500 The firm's capital structure The impact of cost of capital on managerial decisions Consider the following case: Acme Manufacturing Corporation has two divisions, L and H. Division L...
7. Factors that affect the cost of capital equation Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are outside a firm's control? Check all that apply. The general level of stock prices The effect of the tax rate on the cost of debt in the weighted average cost of capital equation The firm's dividend payout ratio The impact of a firm's cost of capital on managerial decisions Consider the...
1. Perhaps the most fundamental relationship in all of economics is which of the following? (a) spin rates and curves; (b) human capital accumulation and the performance of the VIX index; (c) real disposable income and personal consumption expenditures; (d) money supply growth and in-flow of immigrants. 2. When increases in the money supply are said to have no lasting impact upon the level and composition of output, we say that money is: (a) neutral; (b) inflationary; (c) green; (d)...
1. What is the cost of money, and how is it determined? What factors affect the cost of money? 2. What is a yield curve? Why do yield curves differ? 3. Discuss the explanations for various shapes of yield curves. How can yield curves by used to forecast future interest rates? How does the Federal Reserve change the money supply in the United States? What actions would the Fed take to increase interest (decrease) rates? 5. How does general business...
In the discussion on Discounted Cash Flow which was NOT one of the reasons given for why money in the future is perceived to be less valuable than money in your hand today. Select one: a. Missed Opportunities b. Risk c. Inflation d. Interest Rates On a Balance Sheet, inventory is catagorized as Select one: a. a current debt b. an accounts payable O c. a long term asset d. a current asset
Maria is a professional tennis player, and your firm manages her money. She has asked you to give her information about what determines the level of various interest rates. Your boss has prepared some questions for you to consider. 1. Can you suggest the fundamental factors that typically affect the cost of money, or the level of interest rates in the economy? What are other factors we should also take into consideration? 2. Consider the terms inflation premium (IP), default...