A) assets of a borrower that back a secured loan B) interest rate multiplied by the principal C) rate that measures the finance expenses
11) APR
12) simple interest
13) collateral
What will be an ideal response?
Answers: 11) C 12) B 13) A
You might also like to view...
One of the potential pitfalls of real options analysis is that managers may have the incentive and know-how to game the system.
Answer the following statement true (T) or false (F)
Reality Financial Corporation, a U.S. firm, files a suit against Switzerland in a U.S. court. Switzerland claims foreign sovereign immunity. Under the Foreign Sovereign Immunities Act
a. Reality Financial must show that Switzerland is not entitled to sovereign immunity. b. Switzerland must show that it is entitled to sovereign immunity. c. the court must dismiss the suit without any showing. d. the court may hear the suit but its decision will have no effect.
Rollins and Associates develops hotels in resort locations. The company is exploring the construction of a new facility that would have significant meeting and banquet space for conventions and conferences, and sleeping rooms that average 850 square feet. The accounting department estimates that land and building costs will amount to $60 and $120 per square foot of floor area, respectively. Other expenditures during construction for interest, real estate taxes, and general overhead are expected to total 35% of land and construction cost. Once basic construction is completed, Rollins anticipates per-room initial expenditures for:Sleeping room furnishings and accessories$16,000Supplies1,900Marketing5,500The accounting department suggests that 10% be added to the total of all preceding
costs to allow for estimation errors. Construction is anticipated to take two years.Rollins' pricing policy is consistent with that of industry leaders, namely, to set a room rate equal to .1% (.001) of cost. Upon completion, comparable facilities are expected to charge $240 per day.Required:A. Compute the total cost of a sleeping room at the new facility.B. Is the company's room rate competitive? Briefly explain.C. Rollins desires to enter this market by adhering to the industry standard and charging a competitive room rate. If needed, the firm will look for ways to cut expenditures. Briefly explain the difference between cost-plus pricing and target costing.D. Other than operating costs and room revenues, what else should Rollins consider before a final decision is made about the facility? What will be an ideal response?
When evaluating credit, a customer who has paid all bills on time and has favorable credit
references from other creditors is said to have A) capacity. B) collateral. C) creditworthiness. D) character.