You would be making a wise decision if you chose to:
A) base decisions regarding investments on effective rates and base decisions regarding loans on annual percentage rates.
B) assume all loans and investments are based on simple interest.
C) accept the loan with the lower effective annual rate rather than the loan with the lower annual percentage rate.
D) invest in an account paying 6 percent, compounded quarterly, rather than an account paying 6 percent, compounded monthly.
E) ignore the effective rates and concentrate on the annual percentage rates for all transactions.
C) accept the loan with the lower effective annual rate rather than the loan with the lower annual percentage rate.
You might also like to view...
The FTC has adopted a three-day cooling-off rule to give special protection to ________
A) customers who purchased because of deceptive advertising B) customers who purchased because of bait-and-switch tactics C) customers who were not seeking a product D) resellers who do not receive proportionately equal treatment from manufacturers E) resellers who are not covered by the Robinson-Patnam Act
Ratios provide little information unless the analyst places them in a context. After calculating the ratios, the analyst must compare them with some standard. Which of the following is/are possible standard(s)?
a. The planned ratio for the period. b. The corresponding ratio during the preceding period for the same firm. c. The corresponding ratio for a similar firm in the same industry. d. The average ratio for other firms in the same industry. e. All of the above are possible standards.
The following information is available from the current period financial statements: Net income $150,000 Depreciation expense 28,000 Increase in accounts receivable 16,000 Decrease in accounts payable 21,000 The net cash flow from operating activities using the indirect method is
A) $141,000 B) $173,000 C) $117,000 D) $215,000
________ costs fall when larger inventory levels are maintained
A) Insurance B) Reorder C) Storage D) Carrying E) Opportunity