Suppose alyssa is a sports fan and buys only baseball caps. alyssa deposits $1,000 in a bank account that pays an annual nominal interest rate of 5%. assume this interest rate is fixed—that is, it won't change over time. at the time of her deposit, a baseball cap is priced at $10.00. initially, the purchasing power of alyssa's $1,000 deposit is baseball caps. for each of the annual inflation rates given in the following table, first determine the new price of a baseball cap, assuming it rises at the rate of inflation. then enter the corresponding purchasing power of alyssa's deposit after one year in the first row of the table for each inflation rate. finally, enter the value for the real interest rate at each of the given inflation rates. hint: round your answers in the first row down to the nearest baseball cap. for example, if you find that the deposit will cover 20.7 baseball caps, you would round the purchasing power down to 20 baseball caps under the assumption that alyssa will not buy seven-tenths of a baseball cap. annual inflation rate 0% 5% 10% number of caps alyssa can purchase after one year real interest rate when the rate of inflation is less than the interest rate on alyssa's deposit, the purchasing power of her deposit over the course of the year.

Identify the accounting assumption or principle that is described below. (a) select the accounting assumption or principle is the rationale for why plant assets are not reported at liquidation value. (note: do not use the historical cost principle.) (b) select the accounting assumption or principle indicates that personal and business record-keeping should be separately maintained. (c) select the accounting assumption or principle assumes that the dollar is the "measuring stick" used to report on financial performance. (d) select the accounting assumption or principle separates financial information into time periods for reporting purposes. (e) select the accounting assumption or principle measurement basis used when a reliable estimate of fair value is not available. (f) select the accounting assumption or principle dictates that companies should disclose all circumstances and events that make a difference to financial statement users.

Peninsula products has just applied for a loan at your bank. when reviewing peninsula's books for the year that just ended, you notice that the firm uses the fair value option for its bonds payable. you also see that the firm recorded a $55,000 debit in its bonds payable account and a $55,000 credit in its unrealized holding gain or loss"income account. over that same period, interest rates decreased by about 0.5 percent. how should this information affect the bank's decision as to whether to grant peninsula a loan? a : the bank should strongly consider giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen an increase in its credit rating over the past year. b : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely the result of the rise in interest rates. c : the bank should hesitate before giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen a decline in its credit rating over the past year. d : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely unrelated to either interest rates or the firm's credit rating.

In our daily interactions we can find ourselves listening to other people solely for the purpose of finding weakness in their positions so that we can formulate a convincing response. select one: true false