Even if an insurance company holds a substantial reserve to pay claims, the algebra of probability shows that its funds are likely to be exhausted in payouts
Indicate whether the statement is true or false
F
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When the Fed purchases artwork to decorate the conference room at the Federal Reserve Bank of Kansas City
A) reserves rise, but the monetary base falls. B) reserves fall. C) currency in circulation falls. D) the monetary base rises.
A manager is considering investing in a new piece of equipment. The equipment cost $50,000 and the manager will finance the full amount of the cost over three years at an interest rate of 4 percent. In the third year, the manager will repay the entire principal of the loan plus the year's annual interest, after making interest-only payments for the first two years. The equipment will generate
$30,000 in future operating profit each of the three years and has a salvage value of zero at the end of the three years. The tax rate on the firm's profit is 8 percent each year. What is the net present value of the investment? A) $27,036 B) $20,589 C) $32,598 D) $35,852
Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is:
a) $110. b) $30. c) $40. d) $70.
Which of the following is subject to double taxation?
A. income earned by government employees B. dividends and retained earnings C. Social Security income D. income earned by people in the lowest tax bracket