﻿ Which of the following best explains why a firm that needs to borrow money would borrow at long-term rates when short-terms rates are lower
, 18.10.2019 06:10, 4Tris

# Which of the following best explains why a firm that needs to borrow money would borrow at long-term rates when short-terms rates are lower than long-term rates? the use of short-term financing over long-term financing for a long-term project will increase the risk of the firm. the firm’s interest payments will be the same whether it uses short-term or long-term financing, so it is essentially indifferent to which type of financing it uses. a firm will only borrow at short-term rates when the yield curve is downward-sloping.

### Other questions on the subject: Business

Suppose that each firm in a competitive industry has the following costs: total cost: tc=50+12q2tc=50+12q2 marginal cost: mc=qmc=q where qq is an individual firm's quantity produced. the market demand curve for this product is: demand qd=160−4pqd=160−4p where pp is the price and qq is the total quantity of the good. each firm's fixed cost is.
Alocal artisan uses supplies purchased from an overseas supplier. the owner believes the assumptions of the eoq model are met reasonably well. minimization of inventory costs is her objective. relevant data, from the files of the craft firm, are annual demand (d) =150 units, ordering cost (s) = \$42 per order, and holding cost (h) = \$4 per unit per yeara. how many should she order at one time? b. how many times per year will she replenish her inventory of this material? c. what will be the total annual inventory (holding and setup) costs associated with this material (rounded to the nearest dollar)? d. if she discovered that the carrying cost had been overstated, and was in reality only \$1 per unit per year, what is the corrected value of eoq?
When patey pontoons issued 8% bonds on january 1, 2018, with a face amount of \$620,000, the market yield for bonds of similar risk and maturity was 11%. the bonds mature december 31, 2021 (4 years). interest is paid semiannually on june 30 and december 31. (fv of \$1, pv of \$1, fva of \$1, pva of \$1, fvad of \$1 and pvad of \$1) (use appropriate factor(s) from the tables provided.) required: 1. determine the price of the bonds at january 1, 2018. 2. prepare the journal entry to record their issuance by patey on january 1, 2018. 3. prepare an amortization schedule that determines interest at the effective rate each period. 4. prepare the journal entry to record interest on june 30, 2018. 5. what is the amount related to the bonds that patey will report in its balance sheet at december 31, 2018? 6. what is the amount related to the bonds that patey will report in its income statement for the year ended december 31, 2018? (ignore income taxes.) 7. prepare the appropriate journal entries at maturity on december 31, 2021.