Answer:
The correct answer is option b.
Explanation:
An automatic fiscal policy is a policy that corrects the fluctuations in the economy through its normal working without any intervention by the government.
A discretionary fiscal policy, on the other hand, is planned and excercised by the government.
It works through increase in taxes or reduction in the government spending without government.
A sales associate has a house listed at $200,000. It's overpriced and he feels it has only a 70% chance of selling in the original listing term. He also has a $300,000 house that has an 80% chance of sale. A quality review of his listings shows he realistically has?
Answer:
The quality values of the sales associate's listings are:
House A: $200,000 x 70% = $140,000
House B: $300,000 x 80% = $240,000
To determine the quality value of the listings, you have to multiply the listed amounts by the chances of sale.
Country A would have an absolute advantage compared to Country B in the production of corn if
A) corn can be produced at lower cost in terms of other goods than it could be in Country B.
B) Country A uses fewer resources to produce corn than Country B does.
C) the demand for corn is higher in Country A than in Country B.
D) corn sells for a higher price in Country A than in Country B.
Answer:
B) Country A uses fewer resources to produce corn than Country B does.
Explanation:
An absolute advantage is a situation where a country or a company can produce some goods and services using fewer inputs compared to competitors. The company can produce more quantity of using the same amount of inputs than others. A country with an absolute advantage will manufacture a product at a lower cost than other countries or companies.
Absolute advantage enables companies and countries to gain from trade. Through specialization, a company will focus on what it can produce at a lower cost than others, and sell it. Country A has an absolute advantage if it can produce corn at a lower cost than country B.
Richard and Alice are divorced and under the terms of their written divorce agreement signed on December 30, 2011, Richard was required to pay Alice $1,500 per month of which $600 was designated as child support. He made 12 such payments in 2018. Additionally, Richard voluntarily paid Alice $1,200 per month for 12 months of 2018, no portion of which was designated as child support. Assuming that Alice has no other income, her tax return for 2018 should show gross income of:_________.
Answer:
$10,800
Explanation:
Alice's gross income must include the money she received from Richard as part of their divorce settlement, excluding the amount set for child support:
Alice's gross income = 12 x ($1,500 - $600) = 12 x $900 = $10,800
The extra money that Richard gave Alice that was not part of the divorce settlement is not included in her gross income, since it is included in Richard's gross income.
Maria purchased 100 shares of JAX stock for $30 per share and sold this same stock one year later for $29 per share. She paid commissions of $50 when she purchased the stock and $45 when she sold the stock. Dividends of $2 per share were paid during the year. The capital loss on this stock transaction was______
a.$100.
b.$145.
c.$150.
d.$195.
Answer:
Option (d) $195
Explanation:
Data provided in the question:
Number of shares purchased = 100
Price per share = $30
Selling price per share = $29
Commission paid at the time of purchase = $50
Commission paid at the time of sale = $45
Dividend paid = $2 per share
Now,
Total cost of purchasing the shares
= Price of shares + Commission
= ( 100 × $30 ) + $50
= $3000 + $50
= $3050
Revenue from sales
= Selling price of shares - Commission
= ( 100 × $29 ) - $45
= $2900 - $45
= $2855
Therefore,
Capital loss = Total cost of purchasing the shares - Revenue from sales
= $3050 - $2855
= $195
Hence,
Option (d) $195
For something to be considered money, it must a. be of low intrinsic value. b. be of high intrinsic value. c. have the backing of the government. d. not be generally accepted as a medium of exchange. e. be generally accepted as a medium of exchange.
Answer:
e. Be generally accepted as a medium of exchange.
Explanation:
There are several different characteristics that money needs to have,
These include
Potability (Must be portable to carry)Divisibility (must be able to make payments for different worth of goods)Uniformity (must be consistent and uniform)Durability (must not perish if kept over time)Acceptability (must be readily accepted by economic agents)Out of the options, money must be generally accepted as a medium of exchange or there will not be any transactions.
Hope that helps.
Which of the following is not a step in the grievance process? Group of answer choices
1. Employee discusses grievance with union rep/steward or reports directly to supervisor
2. If union representative and employee agree grievance has merit, a formal written grievance is submitted
3. The union representative and a management representative may try to resolve the grievance
4. The grievance is brought before a court, which decides the case
Answer:
The answer is D, the grievance is brought before a court which decides the case.
Explanation:
A grievance procedure is a process adopted within an organisation for the purpose of resolving conflicts. Most of the time, it is meant to resolve conflict between individuals of lower cadre or hierarchy in an organisation and people in the top management position.
There are about six different procedure in the grievance process and taking a grievance to the court to decide on a case is not one of them. However, it is worthy to note that when all necessary grievance procedure have been utilized and there seem not to be a resolution in sight, a third part arbitrator in invited into the scene which mostly is between high management personnel.
In the union or labor grievance process, an issue is not typically brought before a court as a standard step. The process usually entails discussing the grievance with a union or management rep, submitting a formal written complaint if it's deemed valid, and attempting to resolve the issue through discussions between union and management representatives.
Explanation:The fourth option, 'The grievance is brought before a court, which decides the case', is not typically a step in a traditional labor grievance process.
Typically, the grievance process within a labor or union environment follows these general stages:
The employee discusses the issue with a union rep/steward or reports directly to a supervisor. This step ensures that the grievance is properly identified and understood.If the union representative and the employee agree the grievance has merit, a formal written grievance is submitted. This step formalizes the complaint or issue.The union representative and a management representative may attempt to resolve the grievance through discussion and negotiation. This is often the final step, with the hope of resolution.While it's possible that a grievance could eventually end up in court if it's not resolved, this is typically a last resort and not a standard step in the grievance process.
Learn more about grievance process here:https://brainly.com/question/32169630
#SPJ6
A stock is expected to return 11% in a normal economy, 19% if the economy booms, and lose 8% if the economy moves into a recessionary period. The economists predict a 65% chance of a normal economy, a 25% chance of a boom, and a 10% chance of a recession. What is the expected return on the stock?A.11.10%B. 11.23%C. 12.06%D. 11.98%
Answer:
Expected Return = 11.10 %
so correct option is A. 11.10%
Explanation:
given data
return in normal economy = 11%
economy booms = 19%
economy moves loss = 8%
economists predict = 65%
boom = 25 %
chance of recession = 10%
to find out
What is the expected return on the stock
solution
we get here Expected Return for all that is
State of Economy Probability Return Expected Return
Normal 65% 11% 0.0715
Booms 25% 19% 0.0475
Recessionary 10% -8% -0.0080
Expected Return 0.1110
as here Expected Return= Probability × Expected Return ..............1
Expected Return = 11.10 %
so correct option is A. 11.10%
To calculate expected return, multiply the estimated returns of the stock in each economic scenario by their probabilities and sum them. Therefore, the expected return for this stock is 11.1%, considering the 65% chance of a normal economy, 25% of a boom, and 10% of a recession.
Explanation:To calculate the expected return on the stock, you need to take into account the probability forecast of each economic scenario. Each of these events will impact the return on investment in a different way, therefore we must multiply the estimated return by the probability of each situation, respectively.
Therefore, you can calculate the expected return as follows: (0.11 * 0.65) + (0.19 * 0.25) + (-0.08 * 0.10). So, when calculating the figures, we get: (0.0715) + (0.0475) + (-0.008) which equals 0.111 or 11.1%.
This calculation is reflecting the overall expected return on investment considering the given economic probabilities, providing a useful tool for investors to anticipate their stock returns. For instance, this is similar to the varying returns investors saw from buying stocks in the S&P 500 index over recent decades, where dividends and capital gains could dramatically affect the total return.
Learn more about Expected Stock Return here:https://brainly.com/question/17152687
#SPJ3
Government can reallocate resources of an economy through taxes, ________ payments, and by providing direct services..
A. illegal
B. transfer
C. under-the-table
D. over-the-top
Answer:
B. transfer
Explanation:
Transfer payment is when income is received and neither goods or services are exchanged.
Transfer payment is a form of reallocation of resources.
I hope my answer helps you
These are managers who are citizens of countries other than the one in which the MNC is headquartered or the one in which they are assigned to work by the MNC.
A. Multipatriates
B. Home-country nationals
C. Inpatriates
D. Third-country nationals
Answer: D. Third-country nationals
Explanation:
Third-country nationals: Someone who is working with an international organization and is not a citizen of the country where the organization has it headquarters, and also not a citizen of the country where they work. The medical profession is having increase in the number of staffs who are third-country nationals especially for Nurses.
"Enriching Women's Lives" is a three-word mantra that is used by Mary Kay. This is an example of which of the following characteristics of good mission statements? Group of answer choices
1. It defines the major competitive spheres in which the company will operate.
2. It is focused on a limited number of goals.
3. It takes a long-term view.
4. It stresses the company's major policies and values.
5. It is short, memorable, and meaningful.
Answer:
Correct answer is is 5
Explanation:
It is short, memorable, and meaningful.
An insured became disabled in February of 2014. She had bought a disability income policy in October of 2012. Her disability was due to a condition that existed prior to October 2012 but was not excluded from her policy. The insurer will:
Answer:
Pay her claims in full
Explanation:
A disability occurs when a person can't perform the tasks he or she once perform, resulting from either an injury or sickness.
Since it was not excluded from her disability insurance policy agreement she deserves to be awarded any claims made.
Remember often times after an insurance policy is bought the insured pays premiums periodically.
As long as the premiums are paid and other terms of the insurance agreement are kept, the contract stands.
Some WesternSlope Cleaning customers have long-term contracts for full-service cleaning, while others call the company as and when they require a particular service. The long-term customers have their queries handled by the company's customer service representative. The rest of its customers are directed towards voice messages when they want their inquiries to be processed. What strategy is the company adopting to achieve marketing excellence, and what is the main risk of this strategy?
Answer:
Western Slope Cleaning is using a differentiation strategy for its high profit tier customers and their low profit tier customers.
By using this strategy, the full service cleaning customers are probably happier and receive better customers service, but the rest of the customers may be unhappy and feel they are receiving a low quality service. This will eventually lead to a decrease in the amount of low profit tier customers.
Failure to include project management in the WBS will increase the likelihood that the project will not be completed on time and within budget.
Answer:
The statement is True
Explanation:
The purpose of including a project management in the WBS is to allow the project manager properly view the task involved in the project more effectively and thus know what is going to plan and what is not. In this way the project manager can have ample knowledge on whether the project is in line with time and budget.
Carl Cornfield makes a payment on his tractor. What two lines of the balance sheet will this payment change?
Answer:
Property plant and equipment in non current asset section of Carl Cornfield's balance sheet will be increased.
Cash at bank in current asset section of Carl Cornfield's balance sheet will be decreased.
Explanation:
When the entity makes payment for any vehicle, the following two sections of the balance sheet are changed:
Property plant and equipment in non current asset section is increased.
Cash at bank in current asset section is decreased.
So the following two lines of Carl Cornfield balance sheet will be changed.
Property plant and equipment in non current asset section of Carl Cornfield's balance sheet will be increased.
Cash at bank in current asset section of Carl Cornfield's balance sheet will be decreased.
Jordan is buying a laptop computer to take on trips. Although she has looked at several brands, she refuses to buy a computer that weighs more than five pounds. Jordan is basing her decision on____________.
A. habitual decision making.
B. a noncompensatory decision rule.
C. social factors.temporal factors.
D. a compensatory decision rule
Answer: A compensatory decision rule.
Explanation:
Jordan is basing her purchase decision on the weights of the laptop since she is going to use them more often n for trips, this is an example of the compensatory decision rule.
The compensatory decision rule explains that buyers makes purchase by comparing the various products available for sale and choosing the product with qualities closest to what they already have in mind before making purchase.
Karen chooses to go to university fulltime rather than to work. Karen:_______ A. is not part of the labor force. B. is part of the labor force and what economists call a discouraged worker. C. is part of the labor force, but not actively seeking work. D. is considered employed.
Answer:
The answer would be A
Explanation:
It is not part of the labor force because it is not working in any way since it is studying full time, if she worked part time if it would be within the percentage of people who work.
Karen chooses to go to university full-time rather than work. Karen is part of the labor force, but not actively seeking work. The correct option is C.
Karen does not actively seek a job because she is a full-time student. The labor force, by economists' accepted definition, is made up of people who are either employed or actively looking for work. Karen is still regarded as a member of the labor force but is not actively seeking employment because she has decided to concentrate on her schooling.
Thus, the most appropriate selection is option C.
Learn more about Labor Force here:
https://brainly.com/question/13962639
#SPJ6
Corporate executives at LikeReal, Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their:_________
Answer:
Business strategy
Explanation:
The idea to compete in a remote model air-plane industry is a part of the business strategy of like real. This is a business strategy because the decision has been made to compete in an industry to gain more customers and to improve their share in the market. It will also help like real to strengthen their performance and organisational goals.
The economy is in long-run equilibrium: Select one:
a. when the AD and AS curves intersect at potential output, Y*.
b. when the AD and AS curves intersect, regardless of the level of output.
c. when the AD and AS curves become vertical.
d. only when the business cycle is eliminated.
Answer:
A, when the AD and AS curves intersect at potential output,Y.
Explanation:
Aggregate demand curve is a graphical representation that shows the relationship between total goods and services and its price levels.
Aggregate supply curve is a graphical representation that shows the relationship between the total amount of good and services firms are willing to sell and at what price the want to sell.
For an economy to be in long-run equilibrium, an economy has to have both curves meet at a point Y which is the potential output of the economy. This means simply that demand and supply has to be balanced (in equilibrium).
I hope this helps.
What fee is charged by a lender for holding credit available for a borrower, often associated with a construction loan?
1) Take Out Commitment Fee
2) Loan Origination Fee
3) Discount Point
4) Buydown
Answer:
The correct answer is the option 2: Loan Origination Fee.
Explanation:
To begin with, a Loan Origination Fee is the name given in the U.S to an upfront fee, that is being charged by a lender who will process a new loan application and the main purpose of the fee is to compensate the time that is being used for putting the loan in place. Moreover, this type of fees are quoted as a percentage of the total loan. Furthermore, this type of loan is usually associated with a construction loan due to the fact that it will be good for the borrower only is the person plans to sell or refinance within a few years.
The Industrial Workers of the World differed from the other major trade unions in that
a. its objective was to eliminate the private ownership of the means of production.
b. it was outlawed by the U.S. government.
c. unlike the other unions, it disdained using boycotts and strikes against capital.
Answer:
a. its objective was to eliminate the private ownership of the means of production.
Explanation:
Industrial workers have never been outlawed by the US Government. Also, it has never disdained, and due to any reason whatsoever. However, going by the study of Carl Marx, the objective of the industrial workers of the world from the other major trade union is certainly that its objective was to ensure the elimination of the private ownership of the means of production. Hence, this is the correct answer.
The assembly-line workers of Autowon Inc. petitioned the top management to provide basic amenities such as access to potable water and a clean working environment. In the context of Abraham Maslow's hierarchy of needs, this scenario illustrates the workers' _____.
a) physiological needs
b) security needs
c) social needs
d) esteem needs
Which of the following statements is CORRECT? a. Projects with "normal" cash flows must have two changes in the sign of the cash flows, e.g., from negative to positive to negative. If there are more than two sign changes, then the cash flow stream is "nonnormal." b. The "multiple IRR problem" can arise if a project's cash flows are "normal." c. Projects with "normal" cash flows can have two or more real IRRs.
Answer:
a. Projects with "normal" cash flows can have only one real IRR.
Explanation:
The options in this question are incomplete. The complete question can be found here - https://quizlet.com/111317444/intro-to-finance-ch-11-flash-cards/
Here is the complete question:
Which of the following statements is CORRECT?
a. Projects with "normal" cash flows can have only one real IRR.
b. Projects with "normal" cash flows can have two or more real IRRs.
c. Projects with "normal" cash flows must have two changes in the sign of the cash flows, e.g., from negative to positive to negative. If there are more than two sign changes, then the cash flow stream is "nonnormal."
d. The "multiple IRR problem" can arise if a project's cash flows are "normal."
e. Projects with "nonnormal" cash flows are almost never encountered in the real world.
A normal or conventional cash flow is when there's a negative cash flow followed by postive cash flows. Example : Cash flows in year 0,1,2 are $-50, $100, $70 respectively.
A non-normal or non conventional cash flow is when there's a negative cash flow, followed by a positive cash flow then a negative cash flow. Example: Cash flows in year 0,1,2 are $-50, $100, $-70 respectively.
IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.
Multiple IRR is when a cash flow has more than one IRR.
Multiple IRR only occurs with non normal cash flows.
Normal cash flows cannot have more than one IRR.
I hope my answer helps you.
In comparing the current ratios of two companies, why is it invalid to assume that the company with the higher current ratio is the better company?
Answer: I found the options:
A. The current ratio includes assets other than cash.
B. A high current ratio may indicate inadequate inventory on hand.
C. The two companies may define working capital in differentterms.
D. A high current ratio may indicate inefficient use of various assetsand liabilities.
Explanation: The correct answer is "D. A high current ratio may indicate inefficient use of various assets and liabilities."
Is invalid to assume that the company with the higher current ratio is te better company because a high current ratio may indicate inefficient use of various assets and liabilities, That is why it would be convenient to observe other ratios that can help us compare more fully the 2 companies.
Final answer:
Assuming that a company with a higher current ratio is better is invalid because current ratios do not tell the whole financial story. Context, industry standards, and financial trends must be taken into account for accurate financial statement analysis. Other financial ratios and benchmarks should also be considered when assessing a company's financial health.
Explanation:
In comparing the current ratios of two companies, it is invalid to assume that the company with the higher current ratio is the better company because the current ratio does not represent the full financial story of a company. Financial statement analysis is more complex and ratios must be interpreted in context, taking into account trends, industry standards, and unique company circumstances. A higher current ratio might indicate good short-term financial position, but it doesn't necessarily reflect profitability, efficiency, or the appropriateness of asset management.
Additionally, different industries have different operational models and capital needs, which can affect how the current ratio should be interpreted. It's also important to consider factors such as the quality of receivables, inventory levels, and the company's debt structure. In some cases, a high current ratio can suggest that a company is holding too much inventory or not efficiently using its working capital.
When analyzing a company's financial health, other ratios and measures, such as the quick ratio, debt-to-equity ratio, and return on assets, should be considered alongside the current ratio. Moreover, it is essential to look at historical data and industry benchmarks to gain a proper understanding of financial standing.
Maria's company makes televisions. The Clarity, a 4K television featuring wireless capabilities, is their best selling model, and the company plans to release a new version in a month. However, next year Maria's company plans to release a television featuring brand new technology that offers even better picture quality than the Clarity. This is an example of___________.
Answer:
Planned obsolescence.
Explanation:
Planned obsolescence is a strategy used by companies whose goal is to ensure the outdated product and the release of an updated version of the product to arouse the interest of consumers and consequently an increase in demand for the product with greater functionality.
There are several market sectors that use the planned obsolescence strategy, which can be noticed in technology companies, which require more frequent product replacements (smarthphones, computers, tablets ...) due to the wear and tear of physical components and operating system upgrades. generally requires larger features less compatible with previous hardware.
Therefore, despite a widely used strategy, it is ideal for organizations to analyze the implementation of planned obsolescence so as not to be misunderstood by consumers when improvements and upgrades are insufficient to replace the product with a newer one.
Which of the following is NOT one of the managerial considerations in determining how to compete successfully? A. How can a company attract, keep, and please customers?B.How can a company modify its entire product line to emphasize its internal service attributes?C. How should a company respond to changing economic and market conditions?D. How should a company be competitive against rivals?E. How should a company position itself in the marketplace?
Answer:
The correct answer is B.How can a company modify its entire product line to emphasize its internal service attributes
Explanation:
A company modification of its entire production line to emphasize its internal service attributes is not one of the managerial considerations in determining how to compete successfully.
The purpose of this internal modification is to satisfy internal stake holder such as employess of the company. This decision has nothing to with company competitors. To compete sucessfully a company should focus on its external environment.
KylaKyla is buying clothesclothes. She can choose between blue jeansblue jeans, khaki pantskhaki pants, and black jeansblack jeans. She doesn't like black jeansblack jeans, and after some thought, she chooses blue jeansblue jeans. What is the opportunity cost of this choice?
A. The black jeansblack jeans.
B. The khaki pantskhaki pants.
C. The blue jeansblue jeans, the khaki pantskhaki pants, and the black jeansblack jeans.
D. The khaki pantskhaki pants and the black jeansblack jeans.
Answer:
B. The khaki pants
Explanation:
Opportunity cost is the benefits forfeited as a result of choosing one item or activity over the other. It the value of the next best alternative of choice made.
Opportunity costs arise because people have to make choices every day. Choosing an item over others implies sacrificing the benefits of the others. The value or cost of the sacrificed item represents the opportunity cost.
Khaki pants are the opportunity cost. Kyla is comfortable with either blue jeans or khaki pants. He does not like black jeans. His alternatives are khaki pants or Blue jeans. Choosing blue jeans implies forfeiting khaki pants. The khaki pants are the best alternative that was missed.
The opportunity cost of Kyla's decision to buy blue jeans is the khaki pants, which represents the next best alternative she did not choose.
Explanation:The opportunity cost represents the next best alternative that is forgone when a choice is made. In Kyla's case, she had three options - blue jeans, khaki pants, and black jeans - but decided against buying the black jeans.
Therefore, when she chose the blue jeans, her opportunity cost were the khaki pants, which is the other option she could have selected. This is because the opportunity cost is not about all other options, but the next best viable alternative. Considering that she didn't want the black jeans at all, the khaki pants represent her missed opportunity, hence becoming the opportunity cost.
Learn more about Opportunity Cost here:https://brainly.com/question/13036997
#SPJ12
Manuel is a manager for a manufacturing company in which managers are expected to fully document all decisions and in which it is important to provide detailed data to support any recommendations. Also, out-of-the-box thinking is dissuaded. Which characteristic of organizational culture describes this aspect of Manuel's job?
Answer: Low risk taking culture
Explanation:
Organisational culture includes the behaviour, beliefs, value and principles in which an organisation operates on. It's entails the way business are done, decisions are made etc.
Low risk taking is an organisation culture aimed at minimising risks. Recommendations and Decisions are based on facts and genuine data not on abstract and unreal thoughts with decisions fully documented.
t is easiest to identify the company that functions as the strategic center firm in: a. horizontal complementary strategic alliances. b. vertical complementary strategic alliances. c. corporate-level cooperative partnerships. d. international cooperative partnerships.
Answer:
The correct answer is B
Explanation:
Vertical complementary strategic alliances, is the kind of alliances which is made or formed among firms that agree for using their capabilities and skills in different stages of the value chain in order to create or establish value for both the firms.
So, it is easy to acknowledge the company which functions as the strategic centre firm in the vertical complimentary alliances of strategy.
The strategic center firm is easiest to identify in vertical complementary strategic alliances, where firms join together for diverse steps in the production or supply process. The strategic center firm is typically the firm at the top of the chain.
Explanation:It is easiest to identify the company that functions as the strategic center firm in b. vertical complementary strategic alliances. In this type of alliance, companies join together to perform different steps in the production or supply process. This structure creates a clear hierarchy, making it easy to identify the strategic center firm - typically the firm at the zenith of the production or supply chain, dictating terms to its allies below. Examples include John D. Rockefeller's use of vertical integration in building his empire, or a company choosing to specialize in its core competencies and allying with other firms for supply and distribution.
On the contrary, in horizontal complementary alliances, firms at the same level collaborate which might make identifying the strategic center firm intricate. Similarly, in corporate-level and international cooperative partnerships, the strategic center firm might not be readily apparent due to the complex and global nature of these partnerships.
Learn more about Strategic Center Firm here:https://brainly.com/question/14242891
#SPJ12
When one party to a transaction has incentives to engage in activities detrimental to the other party, there exists a problem of:________A) Moral hazard.B) Split incentives.C) Ex ante shirking.D) Pre-contractual opportunism.
Answer: Moral hazard
Explanation: As per economic principles, if an individual increases the exposure to risk when covered by insurance, moral hazard happens, particularly when an individual takes further risks just because someone carries the burden of all those consequences.
There can be a moral hazard at which one party's policies may modify to the disadvantage of someone else after a business transaction has occurred. Moral hazard may arise through a type of asymmetric information in which the threat-taking group to trade is more aware of its motives than the person bearing the risk's implications.
Thus, from the above we can conclude that the correct option is A .
Rogue Spices Inc. has a Canadian receivables contract for $200,000 due in 270 days. The firm has been approached by a factoring firm that offers to purchase the receivables at a 12% per annum discount plus a 1% charge for a nonrecourse clause. What is the annualized percentage all-in-cost of this factoring alternative?
Answer:
14.82%
Explanation:
Data provided in the question:
Receivable contracts = $200,000
Due in days, t = 270
or
= 270 ÷ 365 = 0.74 years
Discount, r = 12% = 0.12
charge for a nonrecourse clause = 1% = 0.01
Now,
Annualized percentage all-in-cost of this factoring alternative
=[tex][\frac{\text{Receivable contracts}}{(\text{Receivable contracts}\times(1 - rt)-(\text{nonrecourse clause})}-1]^{\frac{4}{3}}[/tex]
= [tex][\frac{\$200,000}{(\$200,000\times(1 - 0.12\times0.74)-(\200,000\times0.01)}-1]^{\frac{4}{3}}[/tex]
= 0.1482
or
= 0.1482 × 100%
Annualized percentage all-in-cost of this factoring alternative = 14.82%