There are two costs associated with extending credit; one is potential lost interest income also known as opportunity cost.  What is the other cost

Q: What are the factors on which the cost of a loan depends?

A: Cost of loan are the expenses brought about by the borrower for taking the advance because of the…

Q: When are credits increases? When are credits decreases?

A:

Q: What costs are associated with not granting credit?

A: Cost Management -The preparation and supervision of a company's budget is known as cost management.…

Q: 3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

A: Interest Expenses :- interest expenses is the cost of Borrowing which is Payable by the Borrower…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: Define increase or decrease of credits.

A: Definition:   Account: Account is the basic record that reports all changes in the value of…

Q: Which of the following type of loan is best used for temporary shortfalls of income? a. Secured…

A: Loans can be short term loans or long term loans

Q: What is the Effect of Loan-to-Value Ratio on Loan Cost?

A: LTV ratio tells about the maximum loan approved in terms of the value of the collateral given.

Q: LOS-7) On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some…

A: Interest on Note = Face value of Note x rate of interest x 6/12 = $9900 x 8% x 6/12 = $396

Q: What is the major advantage of using a fee-only financialplanner?

A: There are different types of financial planners to help investors plan their finances. Majorly,…

Q: difference between debt and quity

A: A company’s capital consists of two forms, one is equity and the other is debt. When a company is…

Q: em. b. the amount of money paid for an item,

A: Opportunity costs are the potential gains that an individual, investor, or corporation foregoes by…

Q: Why is there a need for reducing accruing expenses?

A: Accruing expenses are also called as accrued expenses. These are the expenses for which the company…

Q: The marginal cost of an asset is equivalent to its EUAC. True or False?

A: Marginal Cost of Asset means the cost required to run the asset for the next period. EUAC =…

Q: What would the gross profit on this be?

A: Gross profit: The difference between the sales and the cost of goods sold is called gross profit.…

Q: Why Pay back period method is not as effective as NPV?

A: Payback method  It doesn't consider account inflation as well as the cost of capital. It ignores…

Q: The process that determines the present value of a single payment or stream of payments to be…

A: Discounting : Discounting determines how much will be the worth of money if it is received today…

Q: Which of the following costs is a nonlease component for the lessee?    taxes  maintenance…

A: The objective of the question is to identify which of the given costs is considered a nonlease…

Q: what is the expected profit of granting credit

A: Revenue Present Value = $ 1300 Present Value of Cost after increase = $ 1150 Probability of…

Q: What is the main purpose of loan loss provisioning? Explain the concepts of incurred loss model and…

A: The loan loss provision is the cash reserve created by the banks for the future credit risk. The…

Q: Explain the term Divisible Profit.

A: Common stock: Common stock is the instrument used by the company for raising funds from the general…

Q: What is the cost of accrued liabilities? If accruals have such a low cost, why don’tfirms use them…

A: An accrued liability refers to an expense a business has incurred during a specific period but has…

Q: What is a “required rate of return”? Why is it called the “cost ofmoney” or the “price of money”?

A: The required rate of return can be calculated by two methods, 1) Gordan's growth model  Gordan's…