If Congress ends an investment tax credit that used to subsidize domestic investment, how would this affect the market for loanable funds in an open economy context?

Answers

Answer 1
Answer:

Answer: Demand will fall, Interest rates will fall

Explanation:

The investment tax credit would have encouraged more companies to seek loanable funds in order to embark on investment opportunities because they would be taxed less. This increase in demand in the market for loanable funds would have led to rates rising to keep up with demand.

If Congress were to end this credit, the incentive to invest and avoid tax would be gone. Companies would therefore demand less loanable funds and with this drop in demand there will be a drop in interest rates as well to entice people to borrow at the lower rates.


Related Questions

Question Help The production demand for widgets for a​ 250-workday year is​ 7,500 units. Ordering costs are​ $25.00 per order and carrying costs are​ $9.00 per unit per year. Four days must be allowed between order placement and order receipt. What is the reorder​ point, assuming known and constant​ variables?
Which of the following statements about financial statement analysis is most correct? a. The current ratio is the best available measure of liquidity. b. Du Pont analysis is based on the fact that return on equity (ROE) can be expressed as the sum of four other ratios. c. It is relatively easy to interpret a ratio in the absence of comparative data. d. There are no limitations to financial statement analysis, so analysts can always be confident of their conclusions. e. None of the above statements is correct.
The company’s president has asked the Chief Financial Officer (CFO) to record an additional $75,000 of revenue at the end of the year without providing supporting documentation. What is the most ethical thing to do?
2.) Which of the following is true? A. The convenience yield is always positive or zero. B. The convenience yield is always positive for an investment asset. C. The convenience yield is always negative for a consumption asset. D. The convenience yield measures the average return earned by holding futures contracts.
Retain the small predictable layers of risk and transfer the unpredictable catastrophic layer of risk. Does this statement promote appropriate risk financing decision making

Type the correct answer in the box. Spell all words correctly.Which process does a court use to select a jury?
The court selects a jury from a jury pool through a process known as _____.

Answers

voir dire
Lawyers and judges select juries by a process known as “voir dire,” which is Latin for “to speak the truth.” In voir dire, the judge and attorneys for both sides ask potential jurors questions to determine if they are competent and suitable to serve in the case.

Leslie Hoyt is 35 years old. She wants to purchase a $250,000, 5-year life insurance policy. The pre- mium per $1,000 is $2.99. What is her annual premium?

Answers

Answer: 35.88

Explanation:

I’m not sure if this is right I just did 2.99 x12

in which order would the expectancy theory place the following events? a) outcome valence, performance, effort b) performance, effort, outcome valence c) effort, outcome valence, performance d) performance, outcome valence, effort e) effort, performance, outcome valence

Answers

Answer: e. effort, performance, outcome valence

Explanation:

The expectancy theory analyses and explains the reason why people behave the way they do. The expectancy theory explains that individual behave the way they do because they believe their efforts which they put into a particular activity will bring about an outcome.

The first thing that comes first is the effort which one puts into an activity, after then is the performance and lastly the outcome.

Hatch Company has two classes of capital stock: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders' equity. Preferred Stock, 1,000,000 shares authorized, 150,000 shares outstanding $3,000,000
Common Stock, 5,000,000 shares authorized, 2,000,000 shares outstanding $10,000,000
Paid-in Capital in Excess of Par - Preferred Stock $200,000
Paid-in Capital in Excess of Par - Common Stock $27,000,000
Retained Earnings $4,500,000


The following transactions affected stockholders' equity during 2018.

Jan. 1 - 30,000 shares of preferred stock issued at $22 per share.

Feb. 1 - 100,000 shares of common stock issued at $20 per share.

June 1 - Declared a 5% stock dividend on the outstanding common stock when the stock is selling for $25 per share.

June 20 - Issued the stock dividend declared on June 1.

July 1 - 30,000 shares of common treasury stock purchased at $10 per share.

Sept. 15 - 10,000 shares of treasury stock reissued at $11 per share.

Dec. 31 - The preferred dividend is declared, and a common dividend at $0.50 per share is declared.

Dec. 31 - Net income is $2,100,000.


Required:

1. Prepare Journal Entries to Record the Transactions.

2. Prepare the stockholders' equity section for Hatch Company at December 31, 2018. Show all supporting computations.

Answers

1. The preparation of the journal entries to record the stock transactions for the year is as follows:

Jan. 1, 2018: Debit Cash $660,000

Credit Preferred Stock $600,000

Credit Additional paid-in capital-Preferred Stock $60,000

Feb. 1, 2018: Debit Cash $2,000,000

Credit Common Stock $500,000

Credit Additional paid-in capital-Common Stock $1,500,000

June 1, 2018: Debit Retained Earnings $2,625,000

Credit Stock Dividend Distributable $2,625,000

June 20 Debit Stock Distributable $2,625,000

Credit Common Stock $525,000

Credit Additional paid-in capital-Common Stock $2,100,000

July 1, 2018: Debit Treasury Stock $150,000

Debit Additional paid-in capital- Common Stock $150,000

Credit Cash $300,000

Sept. 15, 2018: Debit Cash $110,000

Credit Treasury Stock $50,000

Credit Additional paid-in capital- Common Stock $60,000

Dec. 31, 2018: Debit Dividends: Preferred Stock $3,600,000

Debit Common Stock $1,092,500

Credit Dividends Payable $4,692,500

Dec. 31 Debit Income Summary $2,100,000

Credit Retained Earnings $2,1000,000

2. The Stockholders' Equity Section of Hatch Company's Balance Sheet at December 31, 2018, is as follows:

8%, $20 par value Preferred Stock:

Authorized stock, 1,000,000 shares

180,000 shares, Issued and Outstanding     $3,600,000

Additional paid-in capital - Preferred Stock     $260,000

Common Stock, $5 par value:

Authorized stock, 5,000,000 shares

2,215,000 shares outstanding                       $11,075,000  

Additional paid-in capital- Common Stock  $30,810,000

Treasury Stock (20,000 shares)                       ($100,000)

Retained Earnings                                               $717,500

Supporting Calculations:

180,000 shares, Issued and Outstanding = $3,600,000 (3,000,000 + 600,000)

Additional paid-in capital - Preferred Stock $260,000 ($200,000 + $60,000)

Common Stock, $5 par value:

Authorized stock, 5,000,000 shares

2,215,000 shares outstanding = $11,075,000 ($10m + $500 + $525 + $50)

Additional paid-in capital- Common Stock = $30,810,000 ($27m + 1.5m + $2.1m - $150 + $60)

Treasury Stock = $100,000 ($150,000 - $50,000)

Retained Earnings = $717,500 ($4,500,000 + $2,100,000 - $2,625,000 - $4,692,500)

Data and Calculations:

Capital stock:

8%, $20 par value Preferred Stock:

Authorized stock, 1,000,000 shares

150,000 shares, Issued and Outstanding = $3,000,000

Additional paid-in capital - Preferred Stock $200,000

Common Stock, $5 par value:

Authorized stock, 5,000,000 shares

2,000,000 shares outstanding = $10,000,000

Additional paid-in capital- Common Stock = $27,000,000

Retained Earnings = $4,500,000

Transactions Analysis:

Jan. 1, 2018: Cash $660,000 Preferred Stock $600,000 Additional paid-in capital-Preferred Stock $60,000

Feb. 1, 2018: Cash $2,000,000 Common Stock $500,000 Additional paid-in capital-Common Stock $1,500,000

June 1, 2018: Retained Earnings $2,625,000 Stock Dividend Distributable $2,625,000 (2,000,000 + 100,000 x 5%) 105,000 shares at $25 per share

June 20, 2018: Stock Distributable $2,625,000 Common Stock $525,000 Additional paid-in capital-Common Stock $2,100,000

July 1, 2018: Treasury Stock $150,000 Additional paid-in capital- Common Stock $150,000 Cash $300,000

Sept. 15, 2018: Cash $110,000 Treasury Stock $50,000 Additional paid-in capital- Common Stock $60,000

Dec. 31, 2018: Retained Earnings: Preferred Stock Dividend $3,600,000 (180,000 x $20) Common Stock Dividend $1,092,500 (2,185,000 x $0.50) Dividends Payable $4,692,500

Dec. 31 Income Summary $2,100,000 Retained Earnings $2,1000,000

Learn more about recording stock transactions here: brainly.com/question/25819234

Answer:

Explanation:

Date Accounts and explanations Debit ($) Credit ($)

Jan. 1, 2018 Cash (39,900*$23 per share) 917,700  

7% Preferred stock (39,900 shares * $20 per share)  798,000

Paid-in capital in excess of par - Preferred stock (39,900 shares * $3 per share) ($23 - $20)  119,700

(To record the issue of preferred shares with premium for cash)  

Feb. 1, 2018 Cash (53,400*$21 per share) 1,121,400  

Common stock (53,400 shares * $5 per share)  267,000

Paid-in capital in excess of par - Common stock (53,400 shares * $16 per share) ($21 - $5)  854,400

(To record the issue of preferred shares with premium for cash)  

June. 1, 2018 Common stock (2,127,000 shares + 53,400 shares = 2,180,400)*$5 per share 10,902,000  

Common stock (2,180,400 shares * 2 * $2.5 per share)  10,902,000

(To record stock split of 2 shares issued for every one share held)  

July. 1, 2018 Treasury stock (32,000 shares * $10 per share) 320,000  

Cash  320,000

(To record the purchase of treasury stock by cash)  

Sept. 15, 2018 Cash 122,400  

Treasury stock (10,200 shares * $10 per share)  102,000

Paid-in capital in excess of par - Treasury stock (10,200 shares * $2 per share) ($12 - $10)  20,400

Dec. 31, 2018 Income summary (Net income) 2,182,000  

Retained earnings  2,182,000

(To record the net income at the end of the year)  

Dec. 31, 2018 Retained earnings 1,348,380  

Preferred dividends ($3,046,000 + $798,000)*7/100)  269,080

Common dividend (see note) (2,158,600*$0.5 per share)  1079300

(To record the declaration of dividends)  

Working note:

Particulars In shares

Total shares issued 2,180,400

Less: Treasury shares 32,000

Add: Reissue of treasury shares 10,200

Total share to be accounted 2,158,600

Note: For stock split, no journal entry is required as there will be no change in the total value but only the number of shares will increase and per share will decrease keeping the total value same. Only memorandum entries are prepared.

The common stock dividend per share is confusing with another symbol whether it is $5 per share or $0.5 per share, so it is assumed as $0.5 per share is declared as dividend for common stock.

Note: Since no question is asked in this post, it is assumed that journal entries are required to record transactions that occurred during 2018.

The job search doesn’t end with the interview. After your interview, be sure to follow up with the appropriate correspondence and contact your references if necessary.After an interview, you are told that the company is unsure of when a decision will be made. Because you have some time and want to make the best impression, what advice should you follow when writing a thank-you letter to your interviewer?
Check all that apply.
O Send a separate letter to each interviewer.
O Use a business letter format.
O Mention something you liked about the interview.
O Send thank-you letters to prospective coworkers.
O Send a quick text to the interviewer

Answers

Answer:

The answers that seem to be correct are *Mention something you liked about the interview and *Use a business letter format. This would be a polite and friendly kind of a feedback mixed with good professionalism.

Explanation:

Now let's see why we rejected the other answer options.

1st of all, Sending a separate letter to each interviewer might be difficult as it could be really difficult to find the contact information of all the interviewers.

Sending thank-you letters to prospective co-workers is not a appropriate thing as you have not been selected still for the job.

Sending a quick text to the interviewer might not be appropriate as well. This is because those who interviewed you during the process are much more experienced and qualified than you and you should maintain your relationship with them professionally and with the utmost respect.

The process of planning and managing a firm’s long-term assets is called:______.A. Capital Budgeting
B. Agency Cost Analysis
C. Capital Structure

Answers

C is the correct answer
Other Questions