Homework Answers

International agreements require that states sometimes sacrifices their domestic needs to honor their international responsibilities, discuss these using appropriate examples  

You own a farm and grow seasonal products such as pumpkins, squash, and pears. Most of your business revenues are earned during the months of October to December. The rest of your year supports the growing process, where revenues are minimal, and expenses are high. In order to cover the expenses from January to September, you consider borrowing a short-term note from a bank for $300,000. Based on this scenario, please complete the following:

• Research the lending practices of a local bank.
• Determine the interest rate charged for a $300,000 loan.
• Determine the collateral the bank requires to secure the loan?
• Determine your overall payback amount if you were to repay the loan in less than one year.
• Choose either a payback with periodic payments or all at the end of the loan term, and compare the
• outcomes.
• After conducting your research, would you consider borrowing the money?
• What positive and negative outcomes accompany borrowing the money?

Liam is struggling to determine which deprecation method he should use for his new silk-screening machine. He expects sales to increase over the next five years. He also expects (hopes) that in two years he will need to buy a second silk-screening machine to keep up with the demand for products of his growing company. Discuss which depreciation method makes more sense for Liam:

• Higher expenses in the first few years, or keeping expenses consistent over time?
• Or would it be better for him to not think in terms of time, but rather in the usage of the machine?
• Please explain your choice.