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Capital, Intrest, and Profit Basic concept of interest and swell What is not bad(p)? Capital is durable goods apply in order to hit glacial goods and services. worth and rentings on investment Capital is bought and exchange in capital market; some capital is rented come forth by its holders Ex: an flat that is owned by Ms, landlord talent be rented out for a grade to a student, and the monthly birthment of 800dollars per month would distinguish a rental. Capital vs. pecuniary assets touchable assets: assets that soak up a physical form. Tangible assets include twain fixed assets, more than(prenominal)(prenominal) as machinery, buildings and land, and current assets, such as inventory. The opposite of a tangible asset is an nonphysical asset. Nonphysical assets, such as patents, trademarks, copyrights, goodwill and brand recognition, are all fonts of intangible assets. The stray of diminish on investment Suppose that you own some capital a nd rent it out or that you have some immediate payment and lend it to a intrust or to a elegant business. You will naturally unavoidableness to know what you will pay to borrow or how much you earn by modify .This amount is called the tempo of upbringing on investment. The target of cash in ones chips on investment is the expense of borrowing or lending money (interest rates). Rate of return on capital Lets consider the example of a rental car company .

xxx company demoralises a used car for 20000dollars and rent it out, after subtracting all expenses and presumptuous no change in the cars price, the xxx compan y earns a plunder rental of 2400dollars eac! h year, so the rate of return is 12percent. 2400/20000=12percent The rate of return=dollars per period /dollars Example: I buy a plot of land for 100.000dollars and sell lit a year later for 110.000dollars of there are no other expenses the rate of return on this investment is 10.000dollar per year /100.000 or 10 percent . Financial assets and interest rates For the case of pecuniary assets, we use a different set of terms when measuring...If you deprivation to get a full essay, order it on our website: OrderCustomPaper.com

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