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In case that company uses its equity from retained earnings or contributed capital in addition to borrowed funds to carry out the project, it is possible the avoidable interest is greater than actual interest. Due to the calculation method for avoidable, where you multiple the weighted average interest rate for other borrowing by the rest of the funds used for the project plus the specific funds borrowing interest cost to get the avoidable cost, it is possible that avoidable cost is greater than actual interest.
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What is the difference between dividends and interest expense?
Interest Expense is usually calculated by (Carrying Value of Liability*Yield Rate * Time). Carrying Value is the actual present value of the liability (including discounts earned, etc) Interest Expense is the money that actually goes out of the firm. Interest Paid is calculated by (Face Value of Liability*Interest Rate * Time). Interest Paid is the fair-value of dues from the firm, but is not the actual value of the liability. Interest Expense is the amount reflected in the books of the firm, and is usually higher than Interest Paid. This is because Interest Expense often includes the cost of discount amortization(this is necessary when the bond/other liability was gained at a discount. The amortization is worked into the formula above, and hence gives an amount higher than interest paid. This gives the total interest expensed by the Company.) Hope this helps. Cheers
If expenses are greater than income there is no what?
There is no profit.
What occurs when revenue is greater than expenses?
profit
Is net loss is greater than gross loss?
No
How do banks earn profit from lending money to their customers?
The customer pays the bank interest on the loan. The bank pays some of this interest to its depositors. The difference between incoming interest and outgoing interest (minus operating costs) is the bank's profit. With most loans charging more than 10% interest and most deposit accounts paying less than 0.5% interest, the bank can make loads of profit!
How is a roth ira interest rate different than other interest rates?
A roth ira interest rate is different than others because the greater your balance means greater interest rate.
Is actual yield greater or less than theoretical yield?
The actual yield is less than the theoretical yield.
Estimate 199 over198 plus 35 over 17 indicating if the actual answer is greater than or less the estimate?
199 over 198 estimate = 1 actual answer would be greater than 1 35 over 17 estimate = 1 actual answer would be greater than 1
What interest rate is greater 0.01 percent or 0.75 percent?
0.75% is greater than 0.01%
Is 0.10 greater than or less than 0.01?
yes by a factor of ten. 0.10 is ten times greater than 0.01
What happens when actual sales are greater than forecasted sales?
inventory will decline.
What will interest rates do if the demand for money in the money market exceeds the supply?
If the demand for money is greater than the supply, interest rates will go up.Whenever the demand for anything is greater than the available supply, the price goes up.
Will the estimate of 537 divided 8 be less than or greater than the actual quotient explain your answer?
67.125
Where the actual cost is found to greater than the standard cost is known as?
adverse variance
Draw a flow chart to calculate simple interest with 10 percent rate if time is greater than 2 yrs otherwise calculate simple interest with 5 percent?
Draw a flow chart to calculate simple interest with 10% rate if time is greater than 2 yrs otherwise calculate simple interest with 5%.
What are the odds that the interest rates will return to greater than 5% on high interest CD's?
The odds are pretty good that interest rates will return to greater tahn 5%. We are in an economic downturn right now, but the economy was strong before, and it will be strong again.
True or false A corporation that issues bonds at a discount will recognize interest expense at a rate which is greater than the market interest rate?
True
