Answers
Answer:
The bond's yield to maturity is 11.26%
Explanation:
The computation of the yield to maturity is shown below:
Given that
Present value = PV = $1,216
Future value = FV = $1,000
NPER = 20 × 2 = 40
PMT = 1,000 × 14% ÷ 2 = $70
The formula is shown below:
= RATE(NPER;PMT;-PV;FV;TYPE)
After applying the above formula
The bond yield to maturity is
= 5.63% × 2
= 11.26%
Related Questions
Income before any of the following items is $500,000. (All numbers are net of taxes.)
Unrealized gain on Trading Securities $200,000
Unrealized gain on Debt Available-for-sale Securities (OCI) 100,000
Realized loss on Discontinued Operations 400,000
Depreciation Expense of $300,000 was mistakenly omitted five years ago--Prior Service Cost
Required:
What is Net Income?
a. $900,000
b. $600,000
c. $0
d. $300,000
e. $800,000
Answers
Answer:
The correct option is d. $300,000
Explanation:
The computation of the net income is shown below:
= Income before adjustments + unrealized gain on trading securities - realized loss on discontinued operations
= $500,000 + $200,000 - $400,000
= $300,000
hence, the net income is $300,000
The correct option is d. $300,000
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The results of unethical behavior in a business can be catastrophic, both financially and in reputation. Clearwater Electronics currently has a solid reputation as an ethical organization and wants to maintain that reputation. Top management has tasked the HR department to reinforce ethical behavior consistently throughout the company. Given that responsibility, why is it especially important for the HR professionals themselves to behave ethically?
Answers
Answer:
Throughout the description segment below the overview according to the particular instance is defined.
Explanation:
Even though HR professionals become capable just of establishing as well as maintaining a healthy work atmosphere throughout positions of responsibility, it's indeed crucial that they somehow behave responsibly. This same HR department must therefore implement professional HR activities ensuring that they're being a model citizen again for the majority including its corporation's representatives.Consumer Goods Corporation sells products that are poorly made. Tina, who has never bought a product from Consumer Goods, files a suit against the firm alleging that its products are defective. The firm could ask for dismissal of the suit on the basis:
Answers
Answer: Tina doesn't have a standing
Explanation:
From the information given in the question, we are told that Consumer Goods Corporation sells products that are poorly made.
We are further told that Tina, who has never bought a product from Consumer Goods, files a suit against the firm alleging that its products are defective.
The firm could ask for dismissal of the suit on the basis that Tina doesn't have a standing. This is because Tina has never bought their goods before and therefore shouldn't be alleging that the product of the company is bad. Assuming Tina has bought their products before, then it'll have been harder for the firm to ask for dismissal.
Widmer Company had gross wages of $301,000 during the week ended June 17. The amount of wages subject to social security tax was $270,900, while the amount of wages subject to federal and state unemployment taxes was $38,000. Tax rates are as follows:
Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%
The total amount withheld from employee wages for federal taxes was $60,200.
If an amount box does not require an entry, leave it blank. If required, round answers to two decimal places.
a. Journalize the entry to record the payroll for the week of June 17.
June 7
b. Journalize the entry to record the payroll tax expense incurred for the week of June 17.
June 7
Answers
Answer:
Widmer Company
a. Journal Entry:
Debit Payroll Expense $301,000
Credit Payroll Payable $218,728.50
Credit Payroll Tax Payable $82,271.50
To record the payroll for Week June 17.
b. Journal Entry to record payroll tax expense
Debit Payroll Tax Payable $82,271.50
Credit Cash $82,271.50
To record the payroll tax expense incurred for Week June 17.
Explanation:
a) Data and Calculations:
Gross wages = $301,000
Period = Week ended June 17
Wages subject to social security tax = $270,900
Social security tax rate = 6%
Social security tax = 6% of $270,900 = $16,254
Medicare tax rate = 1.15%
Medicare tax = 1.15% of $301,000 = $3,461.50
State unemployment rate = 5.4%
Federal unemployment rate = 0.8%
Wages subject to federal and state unemployment taxes = $38,000
State unemployment tax = 5.4% of $38,000 = $2,052
Federal unemployment tax = 0.8% of $38,000 = $304
Federal tax withheld = $60,200
Gross wages = $301,000
Social security tax = $16,254
Medicare tax = $3,461.50
State unemployment tax = $2,052
Federal unemployment tax = $304
Federal tax withheld = $60,200
Total tax and deductions = $82,271.50
Net pay = $218,728.50
A company sells a plant asset which originally cost $354000 for $124000 on December 31, 2018. The Accumulated Depreciation account had a balance of $146000 after the current year's depreciation of $39000 had been recorded. The company should recognize a
Answers
Answer:
d. $45.000 loss on disposal.
Explanation:
a. $84000 gain on disposal. b. $84000 loss on disposal. c. $230000 loss on disposal. d. $45.000 loss on disposal.
Book Value on the Date of sale = Cost - Accumulated Depreication -Current year Depreciation
Book Value on the Date of sale = $354,000 - $146,000 - $39,000
Book Value on the Date of sale = $169,000
Gain (Loss) on disposal of the Asset= Selling Price - Book Value
Gain (Loss) on disposal of the Asset = $124,000 - $169,000
Loss on disposal of the Asset = $45,000
Stanley Hart invested in a municipal bond that promised an annual yield of 6.7 percent. The bond pays coupons twice a year. What is the effective annual yield (EAY) on this investment? (Round percentage to two decimal places.) 13.4% 6.81% 6.70% None of the above
Answers
Answer:
the effective annual yield (EAY) on this investment is 6.81%
Explanation:
The computation of the effective annual yield is shown below:
= (1 + rate of interest ÷ number of compounding period)^number of compounding period - 1
= (1 + 0.067 ÷ 2) ^2 - 1
= 6.81%
Hence, the effective annual yield (EAY) on this investment is 6.81%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Jim had a car accident in 2019 in which his car was completely destroyed. At the time of the accident, the car had an adjusted basis of $40,000. Jim used the car 100% of the time for business use. He received an insurance recovery of 70% of the value of the car at the time of the accident. If Jim’s AGI for the year is $60,000, determine Jim's deductible loss on the car.
Answers
Answer:
the deductible loss on the car is $12,000
Explanation:
The computation of the Jim deductible loss on the car is shown below:
Given that
Car value = $40,000
Insurance recovery = 70%
Now the deductible loss is
= Car value - (car value × insurance recovery)
= $40,000 - ($40,000 × 70%)
= $40,000 - $28,000
= $12,000
hence, the deductible loss on the car is $12,000
a suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. the cars average 80000 km a year use an annual cash flow analysis to determine the more economical choice if interest is 6%
Answers
Answer:
Diesel engine taxis should be chosen.
Explanation:
Complete question "A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 80,000 km a year. Use an annual cash flow analysis to determine the more 447 6-49 economical choice if interest is 6%."
Useful life = 5 years
Annual distance covered = 80000 km
For a diesel car
Annual fuel cost = (80000/16)*.88 = $4400
Present value of total cost = vehicle cost + present value of the fuel cost + present value of annual repair cost + present value of annual premium – present value of resale value
Present value of total cost = 24000 + 4400*(1-1/1.06^5)/.06 + 900*(1-1/1.06^5)/.06 + 1000*(1-1/1.06^5)/.06 - 4000/1.06^5
Present value of total cost = $47548.86
Let, uniform annual cost = EUAC1
Then, EUAC1 = 47548.86/((1-1/1.06^5)/.06)
EUAC1 = $11287.93
For a gasoline car
Useful life = 4 years
Annual fuel cost = (80000/11)*.92 = $6690.91
Present value of total cost = vehicle cost + present value of the fuel cost + present value of annual repair cost + present value of annual premium – present value of resale value
Present value of total cost = 19000 + 6690.91*(1-1/1.06^4)/.06 + 700*(1-1/1.06^4)/.06 + 1000*(1-1/1.06^4)/.06 - 6000/1.06^4
Present value of total cost = $43322.83
Let, uniform annual cost = EUAC2
Then, EUAC2 = 43322.83/((1-1/1.06^4)/.06)
EUAC2 = $12502.6
Conclusion: The diesel engine taxis should be chosen because it offers relatively lower uniform annual cost compared to the gasoline engine taxis
Suppose you will receive a payment of $300 one year from now. True or False: If during the year the interest rate rises, this increases the present value of your future payment. True False
Answers
Answer:
False
Explanation:
When value of money is evaluated over time, the interest rate is put into consideration.
Present value of future cash flows of a loan is an estimate of how much will be paid on a certain amount given a specific interest rate over a period of time.
So if there is a fall in interest rate it means that less of the original amount is being discounted, so present value increases.
On the other hand when interest rate increases more of original amount is discounted. So the present value reduces.
In the given scenario when you receive a payment of $300 one year from now and during the year the interest rate rises, this reduces the present value of your future payment
Zimmerman Corp. had 1,500 units of part M.O. on hand May 1, 2020, costing $21 each. Purchases of part M.O. during May were as follows.
Units Unit Cost
May 9 2,000 $22.00
17 3,500 23.00
26 1,000 24.00
A physical count on May 31, 2020, shows 2,000 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2020?
Answers
Answer:
Zimmerman Corp
Using the FIFO method, the cost of part M.O. ending inventory at May 31, 2020 is
$47,000
Explanation:
a) Data and Calculations:
Date Items Units Unit price Total
May 1, 2020 Beginning inventory of M.O. 1,500 $21.00 $31,500
May 9 Purchases 2,000 22.00 44,000
May 17 Purchases 3,500 23.00 80,500
May 26 Purchases 1,000 24.00 24,000
Total 8,000 $180,000
May 31 Ending inventory 2,000
Valuation of ending inventory under FIFO:
Ending inventory = (1,000 * $24) + (1,000 * $23) = $47,000
Cost of goods sold = ($180,000 - $47,000) = $133,000
Under the FIFO method of inventory valuation, it is assumed that goods sold are from the ones put in store first. This means that the earlier purchased goods are sold first before the later ones. Therefore, the ending inventory is always from the inventories that are newly purchased.
Six years ago the Templeton Company issued 21-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Templeton called the bonds.
Required:
a. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.
b. Why the investor should or should not be happy that Templeton called them.
I. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they can now do so at higher interest rates.
II. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates.
III. Since the bonds have been called, investors will receive a call premium and can declare a capital gain on their tax returns.
IV. Since the bonds have been called, investors will no longer need to consider reinvestment rate risk.
V. Since the bonds have been called, interest rates must have fallen sufficiently such that the YTC is less than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates.
Answers
Answer:
a. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.
HPR = [(ending price - actual price) + dividends received] / actual price
HPR = [($1,090 - $1,000) + (6 x $140)] / $1,000 = $930 / $1,000 = 93%
b. Why the investor should or should not be happy that Templeton called them.
V. Since the bonds have been called, interest rates must have fallen sufficiently such that the YTC is less than the YTM. If investors wish to reinvest their interest receipts, they must do so at lower interest rates.The investor should be unhappy because the market interest rates were much lower than 14%. A company will repurchase bonds only if the market rates are much lower than the current coupon rates that they are paying. Even after paying the call premium, the company is still saving money.
On the other hand, if the investor wants to reinvest the $1,090 received per bond, they will earn a lower interest rate.
Which of the following items are normally classified as current liabilities for a company that has a one-year operating cycle? (You may
select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and
double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be
automatically graded as incorrect.)
Portion of long-term note due in 10 months
Note payable maturing in 2 years.
Note payable due in 18 months.
Accounts payable due in 11 months.
FICA taxes payable.
Salaries payable.
Answers
Answer:
Portion of long-term note due in 10 months Accounts payable due in 11 months. FICA taxes payable. Salaries payable.Explanation:
Current Liabilities are those that are to be paid within the operating cycle of a company which in this case is one year.
The current liabilities will therefore be any liabilities maturing or to be paid in a year. That includes the portion of a long term note due in 10 months, accounts payable due in 11 months and FICA taxes and Salaries payable as these should not pass a year to be paid either.
Which of the following are likely to be examples of perfect competition where the seller is a price taker? (There is more than one correct answer - select all.) Porsche selling its cars. Lachelle selling 100 shares of stock. A farmer selling 100 bushels of corn. An art collector selling a Picasso. Apple selling a new watch. A local dairy farmer selling milk.
Answers
Answer:
The correct answers are:
Lachelle selling 100 shares of stock
A farmer selling 100 bushels of corn
A local dairy farmer selling milk
Explanation:
To begin with, a perfect competition market is the one whose characteristics are the following: to have an homogeneous product; to have a lot of consumers and sellers as well so that they both are price takers given the forces of the market; to have transparent and clean information available for every consumer; there are not legal barriers at the entry or either at the exit for the companies.
Secondly, those situation are given in a perfect competitive market because they all have those characteristics. They are markets with homogeneous products and a lot of sellers and consumers as well.
- How would demand have to change for a price change to be unitary elastic?
Answers
Answer:
The percentage change in quantity demanded is exactly equal to the percentage change in price. The percentage change in quantity demanded is exactly equal to the percentage change in price.
Goals set for and by first-line managers are called _____ goals.
Answers
g Mr. Clark owns a property he bought for $1,000,000. The land was valued at $220,000 and the structure was valued at $780,000. What is the adjusted cost basis of the property after eight years of ownership using a 39 year depreciable life
Answers
Answer:
$820,000
Explanation:
Land is not depreciable, so you must always report it at historical cost value.
You can depreciate the building, the depreciation expense per year = $780,000 / 39 years = $20,000
accumulated depreciation after 8 years = 8 x $20,000 = $160,000
cost basis of the property = $220,000 + ($780,000 - $180,000) = $220,000 + $600,000 = $820,000
Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 9% coupon, semiannual payment ($45 payment every 6 months). The bonds currently sell for $896.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt
Answers
Answer:
7.67%
Explanation:
The Excel rate function can be used to determine the before-tax cost of debt as follows:
=rate(nper,pmt,-pv,fv)
nper=number of semiannual coupons in the remaining 20 years=20*2=40
pmt=semiannual coupon=$45
pv=current amrket price= $896.87
fv=face value=$1000
=rate(40,45,-896.87,1000)=5.11%
5.11% is the semiannual yield
yield to maturity=5.11%*2=10.22%
after-tax cost of debt=pretax cost debt*(1-tax rate)
tax rate=25%
after-tax cost of debt=10.22%*(1-25%)=7.67%
Many government programs that define eligibility for benefits based on recipients' income are referred to as:_______
a. conditional transfers.
b. means-tested.
c. cash transfers.
d. in-kind transfers.
Answers
Answer:
b. means-tested.
Explanation:
The government programs that represents the eligibility with respect to the benefits that depend upon the person who received the income is known as the mean tested. In this the low income should be considered. There are various examples like food stamps, subsidiaries of the houses, etc
Therefore the option b is correct
And, the other options are wrong
When a consumer compares the price of a good to the value of that good, he or she is really comparing:_______
a. the value of the good to its opportunity cost.
b. the price of the good to the value of other substitute goods.
c. the price of other substitute goods.
d. the value of the good to the costs associated with producing the good.
Answers
Answer:
a. the value of the good to its opportunity cost.
Explanation:
In Economics, Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available. Thus, the opportunity cost of a choice is the benefits that could be derived in from another choice using the same amount of resources.
For instance, if you decide to invest resources such as money in a food business (restaurant), your opportunity cost would be the profits you could have earned if you had invest the same amount of resources in a salon business or any other business as the case may be.
Hence, when a consumer compares the price of a good to the value of that good, he or she is really comparing the value of the good to its opportunity cost because the opportunity cost of a choice refers to the value of the alternative forgone or opportunities lost.
Ron is ready to purchase a house that costs $300,000. He wants the minimum LTV to avoid PMI. He qualifies for a 15-year fixed-rate loan at 4.5%, what is the total finance charges?
A) $80,890
B) $90,500
C) $90,150
D) $90,900
Answers
Answer:
B) $90,500
Explanation:
Minimum LTV to avoid PMI is 80% of house cost
Value of home = 300,000
Loan = 80%*300,000 = 240000
Monthly installments = -PMT(N, I/Y, Loan)
Monthly installments = -PMT(4.5%/12,15*12,240000)
Monthly installments = $1,835.98
Total repayment over 180 months $330,477.10
Less: Loan value $240,000
Finance Charges $90,477.10
The total amount of finance charges is $90,500 when Ron wants the minimum LTV (loan to value) to avoid PMI (partial molar volume).
Option B is correct.
What are finance charges?Finance charges are the number of fees that are charged for the use of money or for the expansion of the existing credit.
It may be a percentage of borrowing or also may be flat-free, but it is also computed on the basis of a percentage.
Computation of finance charges:
According to the given information,
Minimum LTV to avoid PMI = 80% of house cost.
Home's value = 300,000
Then, the total amount of the loan is:
[tex]\text{Loan} =\text{Minimum LTV Rate} \times \text{Value of Home}\\\text{Loan} =80\% \times \$300,000\\ \text{Loan} = \$240,000[/tex]
Now, the monthly repayment installments are:
[tex]\text{Monthly Installments} = \rm{PMT(\dfrac{N}{12} \times {I}\times{Y} \times Loan)}\\\\\text{Monthly Installments} =\text{PMT}( \dfrac{4.5\%}{12}\times \dfrac{15\%}{12}\times \$240,000)\\\\}\\\text{Monthly Installments} =\$1,835.98[/tex]
Total repayment over 180 months:
[tex]=\text{Monthly Payments} \times 180 {\text{Months}}\\=\$1,835.98 \times 180\\= \$330,477.10[/tex]
Then the finance charges will be:
[tex]\text{Finance Charges} = \text{Total Repayment - Loan Amount}\\\text{Finance Charges} =\$330,477.10 - \$240,000\\\text{Finance Charges} = \$90,477.10[/tex]
Therefore, option B is correct.
Learn more about the finance charge, refer to:
https://brainly.com/question/298229
The initial investment for a project is $400,000, of which 35% will be financed with debt. The project would generate $72,000 in cash flow for equity holders if the firm were unlevered. If the interest rate on the debt is 8% and the tax rate is 24%, what is the cash flow to the equity holders given that the firm is leveraged?
Answers
Answer:
$63,488
Explanation:
Calculation for the cash flow to the equity holders given that the firm is leveraged
Using this formula
Equity holders Cash flow=Cash flow for equity holders -[(1-Tax rate)× Debt interest rate ×(Initial investment debt rate×Project initial investment)]
Let plug in the formula
Equity holders Cash flow=$72,000 - [(1−0.24)× 0.08 ×(0.35×$400,000)]
Equity holders Cash flow=$72,000 -(0.76× 0.08 × $140,000)
Equity holders Cash flow=$72,000-$8,512
Equity holders Cash flow=$63,488
Therefore the cash flow to the equity holders given that the firm is leveraged will be $63,488
What is the standard for determining how well marketing works in a free
market economy?
O A. The marketing mix
B. Producers of goods and services
C. Government legislation
O D. Consumer satisfaction
Answers
Answer:
D. Consumer satisfaction is your answer.
Explanation:
CSAT, or customer satisfaction, is a marketing word that is commonly employed. It evaluates whether a company's goods and services meet or exceed customers' expectations. Hence Option D is Correct .
What is Consumer Satisfaction ?A customer's reported experience with a company, its products, or its services (ratings) is described as "the number of customers, or percentage of total customers, whose reported experience exceeds stated satisfaction goals."
Customers have a crucial part in maintaining the usefulness of a good or service, thus it is in the interest of the company to assure customer satisfaction and foster client loyalty.
As part of its ongoing Common Language in Marketing Project, the Marketing Accountability Standards Board (MASB) supports the definitions, goals, and metrics found in Marketing Metrics. In a poll ofA customer satisfaction statistic was recognized as being extremely helpful by 71 percent of the roughly 200 senior marketing managers who answered.
Learn more about Consumer Satisfaction here
https://brainly.com/question/15185649
# SPJ 5
both retail and business banks are important to the US economy because they
Answers
Answer:
Retail businesses are important because they provide millions of jobs in the United States. According to the most recent figures, almost 10 million Americans work in retail, from cashiers to store vendors, to low-level clerks.
Business banks are important because they provide much needed deposit services and credit to businesses and individuals. The modern economy would not work without banking, and this is why the banking sector is highly regulated by the government, and often rescued in times of economic crisis.
Answer: B. Use deposits to provide loans and financing
Explanation:
A.P.E.X
What media format provides ads that do not disappear from sight or hearing
within a matter of moments?
A. Loud speaker announcements
B. Print publications
C. Television
O D. Radio
SUBMIT
Answers
Answer:
B. Print Publications
Explanation:
Speaker announcements, television, and radio ads disappear after the ad is done. But, printed ads stay on the paper.
Print publications media format provides ads that do not disappear from sight or hearing within a matter of moments. The correct option is B.
Why is print advertisement important?Print advertisements enable businesses to reach out to these consumers and market their products or services. Print ads are ideal for local businesses: Print ads can be used by local businesses to target consumers in their area. This is an excellent strategy to raise brand recognition and gain the trust of potential customers.
Print advertising refers to advertisements that are printed in hard copy in publications that your target audience is likely to read. Benefits: By purchasing an advertisement in a large circulation magazine, you boost your chances of reaching a large audience.
Thus, the ideal selection is option B.
Learn more about print advertisements here:
https://brainly.com/question/15002007
#SPJ2
A movie theater charges $5 per ticket and averages 300 customers each night. If prices are raised to $7 per ticket, the theater estimates that average nightly ticket sales will be $1,750. How many customers is the theater expecting to average each night with the new ticket price ?
Answers
Answer:
250
Explanation:
I did 1750 divide 7 which got me 250
Assume that new Towne Company reported the following summarized data at September 30, 2016. Accounts appear in no particular order; dollar amounts are in millions.
Stockholders' equity, September 1, 2016* $5 Revenues $37
Accounts Payable 7 Expenses 30
Other assets 21 Cash ?
Other liabilities 6
Stockholders' Equity does not include the current period net income.
Required:
Prepare the trial balance of Towne at September 30, 2018. List the accounts in their proper order. How much was Forward Towne. Company's net income or net loss?
Answers
Answer:
Particulars Amount
Stockholders' equity, $5
September 1, 2016
Add: Revenues $37
Add: Accounts Payable $7
Less: Expenses $(30)
Less: Other assets $(21)
Add: Other liabilities $6
Cash $4
New Towne
Trial balance
For the year ended September 30, 2016
Account title Debit Credit
Cash $4
Other assets $21
Accounts payable $7
Other liabilities $6
Stockholders Equity $5
Revenues $37
Expenses $30
Total $55 $55
Revenues $37
Less: Expenses $(30)
Net income $7
The next dividend payment by ASAP, Inc., will be $2.00 per share. The dividends are anticipated to maintain a 4.00% growth rate, forever. If ASAP stock currently sells for $14.75 per share, what is the required return?
Answers
Answer:
r = 0.175593 or 17.5593% rounded off to 17.56%
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D1 / (r - g)
Where,
D1 is dividend expected for the next period /year g is the growth rate r is the required rate of return
Plugging in the values for D1, P0 and g, we can calculate the value of r to be,
14.75 = 2 / (r - 0.04)
14.75 * (r - 0.04) = 2
14.75r - 0.59 = 2
14.75r = 2 + 0.59
r = 2.59 / 14.75
r = 0.175593 or 17.5593% rounded off to 17.56%
is purchasing today a new Lamborghini for $140000 and the finance office at the dealership is quoting an APR of 7.32 compounded monthly for an eight year loan in order to buy the car If her first payment is one month from today what will her monthly payment be over the period of the loan What is the Effective Annual Rate of the loan
Answers
Answer:
7.57%
Explanation:
The formula for effective annual rate is provided below which forms the basis for determining the effective annual rate:
effective annual rate=(1+APR/m)^m-1
APR=annual percentage rate=7.32%
m=number of times in a year that is the interest is compounded=12
effective annual rate=(1+7.32%/12)^12-1
effective annual rate=(1+0.0061 )^12-1
effective annual rate=1.075706488 -1
effective annual rate=7.57%
On December 31, 2017, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2018, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000. What amount would the company report as its net accounts receivable on December 31, 2017
Answers
Answer:
Accounts receivable is $745,000
Explanation:
The company would report as net receivable, the total amount on accounts receivable minus total amount on the Allowance for uncollectible Accounts, which implies that the balance represent the amount of credit that will not be possible to collect again hence, the value represent balance on net accounts receivable.
Accounts receivable = Adjusted balance in accounts receivable - Allowance for doubtful accounts
= $800,000 - $55,000
= $745,000
A firm receives a cash flow from an investment that will increase by 10 percent annually for an infinite number of years. This cash flow stream is called:
a. an annuity due.
b. a growing perpetuity.
c. an ordinary annuity.
d. a growing annuity.
Answers
Answer:
b. a growing perpetuity.
Explanation:
As we know that an annuity is a stream of the cash flow that goes for the limited time period i.e. number of years
But in the case of perpetuity it would go for an infinite time period
Since in the question the cash flow arises from an investment rises by 10% for an infinite number of years so this represents the growing perpetuity
Hence, the correct option is b.
