the practice of charging an interest rate to an initial sum and to any previously accumulated interest that has not been withdrawn.

Related MCQs

• the practice of charging an interest rate to an initial sum and to any previously accumulated interest that has not been withdrawn.
• the practice of charging an interest rate only to an initial sum (principal amount) is
• the practice of charging an interest rate only to an initial sum (principal amount) is _______
• If the inflation rate is 6% per year and the market interest rate is known to be 15% per year. What is the implied real interest rate in this inflationary economy?
• If the inflation rate is 6% per year and the market interest rate is known to be 15% per year. What is the implied real interest rate in this inflationary economy?
• If the inflation rate is 6% per year and the market interest rate is known to be 15% per year. What is the implied real interest rate in this inflationary economy?
• Your accounting records indicate that an asset in use has a book value of $8,640. The asset cost $30,000 when it was purchased, and it has been depreciated under the 5 MACRS method. Based on the information available, determine how many years the asset has been in service.
• Consider a machine that costs $20,000 and has a five-year useful life.At the end of the five years, it can be sold for $4,000 after all tax adjustments have been factored in. If the firm could earn an after-tax revenue of $4,400 per year with this machine, should it be purchased at an interest rate of 10%? (All benefits and costs associated with the machine are accounted for in these figures.)
• You just purchased a pin inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine cost $56,000 and has an estimated service life of 5 years. At that time, the estimated salvage value would be $5,000. The machine is expected to operate 2,500 hours per year. The expected annual operating and maintenance cost would be $6,000. If your firm’s interest rate is 15%, what would be the machine cost per hour?
• Consider a machine that costs $20,000 and has a five-year useful life.At the end of the five years, it can be sold for $4,000 after all tax adjustments have been factored in. If the firm could earn an after-tax revenue of $4,400 per year with this machine, should it be purchased at an interest rate of 10%? (All benefits and costs associated with the machine are accounted for in these figures.)