Answer:
$652.19
Explanation:
the market price = $1,000 / (1 + 0.05488)⁸ = $1,000 / 1.53329 = $652.19
In order to calculate the price of the STRIP we have to use the present value formula.
present value = future value / (1 + i)ⁿ
future value is the face value = $1,000
i = 5.488%
n = 8
A corporation makes a payment of $2.65 million at the end of 2017 for services rendered by a large database company. With an annual interest rate of 11%, what annual payments at the end of years 2017 through 2022 will be equivalent to $2.65 million at the end of 2017?
Answer:
Required PMT = $564,334 (Approx)
Explanation:
Given:
Present value (PV) = $2,650,000
Rate (r) = 11% = 0.11
Time (n) = 6
Find:
Required PMT
Computation:
[tex]PV=PMT[\frac{1-(1+r)^{-n}}{r} ][1+r] \\\\ 2,650,000=PMT[\frac{1-(1+0.11)^{-6}}{0.11} ][1+0.11] \\\\ 2,650,000=PMT[\frac{0.4653}{0.11} ][1.11] \\\\ 2,650,000=PMT[4.6958] \\\\ PMT = 564,334.086[/tex]
Required PMT = $564,334 (Approx)
5. Consider a 5% coupon bond with 5 years to maturity and $1,000 face value. a. What should the price of the bond be if the yield to maturity is 10% b. Alternatively assume the price of the bond is $900. What is the yield to maturity
Answer:
a. 810.46
b.7.47%
Explanation:
The yield to maturity, book yield or redemption yield of a bond or other fixed-interest security, such as gilts, is the internal rate of return earned by an investor who buys the bond today at the market
DATA
Par value = $1000
coupon = 5% x 1000 = $50
Number of Years = 5
Requirement a)
If ytm of 10%
price of Bond = PV of Coupons + PV of Par Value
price of Bond= 50*((1-(1+10%)^-5)/10%) + 1000/(1+10%)^5
price of Bond =810.46
Requirement b)
YTM using Financial Calculator
N = 5; PMT = 50; PV = -900; FV = 1000; CPT I/Y =7.47%
YTM = 7.47%
During May, a shop had a net markdown of $940. If total markdowns were $1,890, determine the markdown cancellation
Answer:
the markdown cancellation is $950
Explanation:
The computation of the markdown cancellation is shown below:
Markdown cancellation is
= Total markdown - net markdown
= $1,890 - $940
= $950
By deducting the net markdown from the total markdown we can get the markdown cancellation and the same is to be considered
hence, the markdown cancellation is $950
A 15-year annuity pays $2,200 per month, and payments are made at the end of each month. If the interest rate is 10 percent compounded monthly for the first seven years, and 6 percent compounded monthly thereafter, what is the present value of the annuity
Answer:
$215,895.24
Explanation:
The present value of an annuity is the current value of future payments from an annuity, given a specified rate of return, or discount rate. The higher the discount rate, the lower the present value of the annuity
First find the present value of the last 8 years of payment:
PV after 7 years: 2200 * (p/a,6%/12,96 )
PV = 2200 * (1-(1+0.06/12)-96/(0.06/12)
PV = 2200 * 76.0952
PV = $167,409.48
Present value today discounted by 84 months at 10% compounded monthly PV = 167409.48/(1+0.10/12)84
PV = $83,374.57
PV of first 7 years of payment:
2200 * (p/a,10%/12,84 )
PV = 2200 * (1-(1+0.10/12)-84/(0.10/12)
PV = 2200 * 60.2367
PV = $132,520.67
Total Present value of the annuity = $83,374.57 + $132,520.67
Total Present value of the annuity = $215,895.24
A 25 year bond issued today by Carris, Inc. has a coupon rate of 11%, a required return of 12% and a face value of $1000. The bond will be sold 8 years from now when interest rates will be 9%. What is the beginning value of the bond when it is issued (to the nearest dollar)
Answer:
bond's current market value = $921.56
Explanation:
the current market price of the bond is calculated by adding:
present value of bond's face value = $1,000 / (1 + 12%)²⁵ = $58.82present value of coupon payments = $110 x 7.8431 (PV annuity factor, 12%, 25 periods) = $862.74bond's current market value = $921.56
Provincial Co. estimates it is probable that it will receive a $10,000 gain contingency and pay a $4,000 loss contingency. After recording the appropriate journal entries to recognize contingent amounts, Provincial Co.'s net assets will: Group of answer choices Decrease by $4,000 Increase by $10,000 Increase by $6,000 Not change
Answer: Decrease by $4,000
Explanation:
Contingency amount simply means the fund which a company puts aside in order to settle unforeseen expenses that the company may incur in future.
Gain contingency simply means that the future occurence brings about a gain to the business while loss contingency simply means that the future occurence brings about a loss to the business.
In this scenario, since Provincial Co. estimates it is probable that it will receive a $10,000 gain contingency and pay a $4,000 loss contingency.
After recording the appropriate journal entries to recognize contingent amounts, Provincial Co.'s net assets will decrease by $4,000 as $4000 will be removed because it's a loss.
Franklin Foods announced that its sales were $1,233,450 this year. The company forecasts a growth rate of 16 percent for the foreseeable future. How long will it take the firm to produce earnings of $3 million? (Round off to the nearest year.)
Answer:
6 years
Explanation:
The computation of the number of years is shown below:
As we know that
Future value = Present value × (1 + interest rate)^number of years
$3,000,000 = $1,233,450 × (1.16)^n
($3,000,000 ÷ $1,233,450) = (1.16)^n
2.4322 = (1.16)^n
Now take log on both sides
log 2.4322 = n × log 1.16
n = log 2.4322 ÷ log 1.16
= 6 years
the common set of standards and procedures by which audited financial statements are prepared is known as
Answer:
Generally Accepted Accounting Principles
Explanation:
GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).
GAAP includes each of the following pronouncements:
Statements of Financial Accounting Standards, Accounting Research Bulletins, Accounting Principles Board Opinions.
For external reporting purposes, United States of America, Generally Accepted Accounting Principles (GAAP) allows companies to use only the traditional format of the income statement.
Hence, the common set of standards and procedures by which audited financial statements are prepared is known as generally accepted accounting principles.
What is the average income of an economy with a Gini coefficient of 0.2 and a covariance between income and cumulative distribution of income equal to 180?
Answer:
Average Income = $450
Explanation:
The Gini coefficient is an index of measuring inequality of inome or wealth distribution among population within countries and between countries.
Gini Coefficient = Covariance between income and cumulative distribution of income / 2 (average income) . It implies, Average income = Covariance between income and cumulative distribution of income / 2 Gini coefficient
Average income = 180 / 2*0.2
Average income = 180 / 0.4
Average Income = $450
Hence, the average Income of the economy is $450.
Say there is a decrease in the price of one of the inputs needed to produce good Y. As a result, the equilibrium price of X(a substitute) will:_______
Answer:
The equilibrium price of substitute good X will reduce
Explanation:
Substitute goods are goods that satisfy the same basic kind of demands, and in terms of production, substitute goods are goods that require the same raw materials for production, as a result, one of the goods can be used in place of the other. If there is a decrease in the price of one of the inputs needed to produce good Y, this will eventually result in the selling price of good Y, hence an increase in demand for Y and a reduction in the demand for good X, as a result, the equilibrium price of X will reduce to maintain the demand.
In a macroeconomic context, what are implicit liabilities? Money owed to people possessing government issued bonds. The amount of money that firms collectively owe to shareholders. Money that the government has promised to pay in the future. Payments that the Federal Government undertakes only during periods of recession.
Answer: Money that the government has promised to pay in the future
Explanation:
Implicit liabilities are the money that the government has promised to pay in the future. It should be noted that the implicit liabilities are not included in the debt statistics
These liabilities are a burden in the government which the citizen expects them to oblige. Examples of implicit liabilities are social security benefits, health insurance, etc.
If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of receivables?
Answer:
The pledge of receivables as a security for a loan from the bank will be disclosed in the notes to the balance sheet.
Explanation:
If Company A pledges its Accounts Receivable as a security for a bank loan, then in the accounts receivable account description, a note is attached, stating the amount of the receivables pledged as collateral and the description of the loans for which they were pledged. Most times, a pledged asset can reduce the down payment that is required for a loan. It can also reduce the interest rate charged.
What is the FCAC, assuming that the project will continue at the same rate of efficiency as has been realized in through the first 6 weeks?
Answer:
It is a nodal agency.
Explanation:
FCAC stands for Financial Consumer Agency of Canada. It is an independent agency of the government of Canada which enforces the consumer protection legislation, the regulations as well as the industry commitments by some federally regulated financial entities.
FCAC is a consumer-oriented protections to ensures and regulate consumer problems.
It costs Bramble Corp. $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 4300 scales at $15 each. Bramble would incur special shipping costs of $1 per scale if the order were accepted. Bramble has sufficient unused capacity to produce the 4300 scales. If the special order is accepted, what will be the effect on net income
Answer:
Effect on income= $8,600 increase
Explanation:
Giving the following information:
Unitary variable cost= 12 + 1= $13
Units sold= 4,300
Selling price= $15
Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs.
Effect on income= units sold*unitary contribution margin
Effect on income= 4,300*(15 - 13)
Effect on income= $8,600 increase
Total contribution margin in dollars divided by pretax income is the: Multiple Choice Degree of operating leverage. Contribution margin ratio. Margin of safety. Sales mix. Break-even point in units.
Answer:
Degree of operating leverage.
Explanation:
As we know that the formula of the degree of operating leverage which is given below:
= (Sales - Variable costs) ÷ (Sales - Variable costs - Fixed costs)
where,
Contribution margin = (Sales - Variable costs)
And,
EBIT i.e Pretax Income = (Sales - Variable costs - Fixed costs)
So the first option is correct and the same is to be considered
The ease with which resources can be adjusted in response to changes in demand, technology, products and services, and resource availability is known as:
Answer:
Process flexibility.
Explanation:
The ease with which resources can be adjusted in response to changes in demand, technology, products and services, and resource availability is known as process flexibility.
Process flexibility simply refers to the ability of a firm or company to respond to changes in the production line or manufacturing process of goods to meet the needs of their customers.
For instance, when there is a new technology in the industry, the ability of a company to switch with ease is its process flexibility.
Problem 13-32 (LO. 2) Sea Green Enterprises reports the following assets and liabilities on its balance sheet. Net Book Value Fair Market Value Assets $600,000 $925,000 Liabilities 200,000 200,000 Sea Green has just lost a product liability lawsuit, with damages of $10,000,000 being awarded to the plaintiff. Although Sea Green will appeal the judgment, legal counsel indicates the judgment is highly unlikely to be overturned by the appellate court. The product liability insurance carried by Sea Green has a policy ceiling of $6,000,000. Assume any net assets of the company will be used to reduce the judgment. What is the amount of liability of Sea Green Enterprises and its owners if the business entity is a sole proprietorship, a partnership, a C corporation, and an S corporation
Answer:
Since the negative result of the lawsuit is extremely high, Sea Green Enterprises will probably be liquidated:
If it is a C corporation:
Sea Green will have to pay $725,000 (net assets)Its owners owe nothingIf it is an S corporation (similar to C corporation):
Sea Green will have to pay $725,000 (net assets)Its owners owe nothingIf it is a partnership:
Sea Green will have to pay $725,000 (net assets)Its owners will owe the rest = $4,000,000 - $725,000 = $3,275,000If it is a sole proprietorship:
Sea Green will have to pay $725,000 (net assets)Its owner will owe the rest = $4,000,000 - $725,000 = $3,275,000Owners of sole proprietorships and partnerships are personally liable for all the business debts. While owners of S or C corporations are not personally liable for any of the business's debts.
Quark Corp. issues bonds on January 1, 2020 with a face value of $100,000, a coupon (stated) rate of 8%, and they mature in ten years. The market rate is 9% on January 1, 2020. The bonds sell for $93,496 and pay interest semi-annually on 6/30 and 12/31 each year. What is the amount of interest expense recognized by Quark on June 30, 2020
Answer:
$4,207.32
Explanation:
The interest expense the company would recognize for the six-month period ended 30 June 2020 is the cash proceeds from the bond issuance multiplied yield to maturity of 9% which is also adjusted to reflect six-month period rather than a full year period as shown below:
The amount of interest expense recognized by Quark on June 30, 2020=$93,496*9%*6/12
The amount of interest expense recognized by Quark on June 30, 2020=$4,207.32
The amount of interest expense recognized by Quark on June 30, 2020 is $4,207.
Using this formula
Interest expense =Bond carrying value x Market rate x Time
Where:
Bond carrying value=$93,496
Market rate=9%
Time=6/12
Let plug in the formula
Interest expense= $93,496 x .09 x 6/12
Interest expense= $4,207
Inconclusion the amount of interest expense recognized by Quark on June 30, 2020 is $4,207.
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https://brainly.com/question/22528546
Adaptability is essential to competent communication because communication is always _______________________.
Answer:
dynamic.
Explanation:
Adaptability is essential to competent communication because communication is always dynamic.
Adaptability means the ability to adjust to a new thing or to changes in an old thing.
Communication is not new to the world. It is a process of sending and receiving messages or an individual's intent.
Competent Communication is one where the sender (encoder) and receiver (decoder) get satisfied that they've understood each other.
There are different forms of communication - Sign Language, Written notes, Audio means, Video, Telecommunications, Internet channels, etc.
From the examples above, you can tell that communication never stops metamorphosing. It graduates from one to another over time.
For competence in communication, people need to adapt to the ever dynamic channels of communication
Sally and Alicia are equal general partners in a business. They are content with their current management and tax situation but are uncomfortable with their unlimited liability. Which form of business entity should they consider as a replacement to their current arrangement assuming they wish to remain the only two owners of the business
Answer: Limited Liability Company
Explanation:
Based on the scenario above, the form of business entity should they consider as a replacement to their current arrangement assuming they wish to remain the only two owners of the business is a limited liability company.
A Limited Liability Company is a form of business that is limited by shares and gives protection to its owners as the owners are only liable to the debt of the business based on the value of their shares in the business.
.
On February 3, Smart Company sold merchandise in the amount of $3,900 to Truman Company, with credit terms of 3/10, n/30. The cost of the items sold is $2,725. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:
Answer and Explanation:
The journal entry is shown below:
Cash ($3,900 × 0.97) $3,783
Sales discount ($3,900 × $0.03) $117
To Account Receivable $3,900
(Being the cash receipt is recorded)
For recording this, we debited the cash and sales discount as it increased the assets and discount and at the same time it decreased the account receivable
The same is to be considered
1. Assume that AmerisourceBergen adjusts the LIFO reserve at the end of its quarter. Prepare the September 30, 2017, adjusting entry to record the cost of goods sold adjustment.2. If AmerisourceBergen had used FIFO to report its inventories, what would cost of goods sold have been for the quarter ended September 30, 2017?
Answer:
1. Sep 30, 2017
Dr LIFO reserve 158
Cr Cost of Goods sold 158
2. $148,756
Explanation:
1. Preparation for September 30, 2017, adjusting Journal entry to record the cost of goods sold adjustment
Sep 30, 2017
Dr LIFO reserve 158
Cr Cost of Goods sold 158
(To record Adjustment to cost of goods sold)
Calculation for cost of goods sold adjustment
Cost of goods sold=LIFO reserve in 2016 - LIFO reserve 2017
Cost of goods sold= $1,625 - $1,467
Cost of goods sold= $158
2. Calculation for what cost of goods sold would have been for the quarter ended September 30,
FIFO Cost of goods sold = (Income statement Cost of goods sold + LIFO reserve)
FIFO Cost of goods sold= $148,598 + $158
FIFO Cost of goods sold=$148,756
Therefore what cost of goods sold would have been for the quarter ended September 30 is $148,756
Standard Company has a contingent liability that has a likelihood of actual occurrence that is classified probable. Also, the amount of the liability can be reasonably estimated. Under these circumstances, Standard is required to:_______________
Answer:
Recognizes a liability and an expense in its financial statements.
Explanation:
Stuffs or periods like this are said to return up thanks to outvomes that are appeared thanks to uncertain futire events in a very company. This liability format may be a potential liability which will occur within the future, like pending lawsuits or honoring product warranties. If the liability is probably going to occur and therefore the amount may be reasonably estimated, the liability should be recorded within the accounting records of a firm.
Contingent liabilities are recorded to confirm that the financial statements are accurate and meet GAAP or IFRS requirements.
In Lawler v. Montblanc North America, where Lawler, a store manager, was fired after telling her employer that she could not work more than 20 hours a week due to a medical condition, she sued for emotional distress and the appeals court held that:
Answer:
the appeals court held that she had no claim for emotional distress because the situation was upsetting, not outrageous.
Explanation:
'Lawler v. Montblanc North America' was a case file by Cynthia Lawler, a store manager against Montblanc North America, LLC and its CEO and President.
On January 11, 2013, the Court of Appeals ruled the claims by Lawler as factless and passed judgement in favor of Montblanc. The Court of Appeals ruled that Lawler's emotional distress was not severe. The Court did not find Lawler's emotional distress in 'severe' case, thus the court held that though the situation was upsetting, but her condition was not outrageous.
Greg's Corner Bakery purchased a lot in Bozeman six years ago at a cost of $98,700. Today, that lot has a market value of $128,900. At the time of the purchase, the company spent $6,500 to level the lot and another $12,000 to install storm drains. The company now wants to build a new facility on the site at an estimated cost of $494,200 ($400,000 for the property and $94,200 for ovens, mixers, and other equipment). What amount should be used as the initial cash flow for the net fixed assets of this project
Answer:
Ye
Explanation:
Calvin has always lived in Arizona. He owns a siding company in Arizona and in 2019 he earned $120,000 including $30,000 from a separate and distinct job in California. What amount of his income is taxable in California
Answer:
$30,000
Explanation:
Based on the information given we were told that he has always lived in Arizona in which he earned the amount of $30,000 from a separate job that he did in California which means that the amount of $30,000 that was earned in California will be subject to tax or taxable reason been that every income that is been earned in California will be subject to tax in California.
Therefore the amount of his income that is taxable in California will be $30,000
From 2006 to 2010, per capita real gross domestic product (GDP) in China grew an average of 10.62% per year. At that rate, according to the Rule of 70, in roughly how many years will Chinese per capita real GDP double in size, beginning in 2006
Answer:
The Number of years is 6.6 years
Explanation:
The computation of the number of years in which the chinese per capita real GDP doubles is shown below:
According to the rule 70 , the calculation is as follows
= 70 ÷ 10.62
= 6.59
= 6.6 years
Here we applied the rule 70 as it defines in how many years the GDP doubles
So, the same is to be considered
Larkspur, Inc. had a beginning inventory of 96 units of Product RST at a cost of $8 per unit. During the year, purchases were: Feb. 20 643 units at $9 Aug. 12 411 units at $11 May 5 480 units at $10 Dec. 8 99 units at $12 Larkspur, Inc. uses a periodic inventory system. Sales totaled 1,450 units. (a) Determine the cost of goods available for sale.
Answer:
cost of goods available for sale= $17,064
Explanation:
Giving the following information:
Beginning inventory of 96 for $8 per unit.
Purchases:
Feb. 20: 643 units at $9
Aug. 12: 411 units at $11
May 5: 480 units at $10
Dec. 8: 99 units at $12
We need to calculate the cost of goods available for sale:
cost of goods available for sale= 96*8 + 643*9 + 411*11 + 480*10 + 99*12
cost of goods available for sale= $17,064
he beta of an all equity firm is 1.6. The beta of debt is 0.2.If the firm changes its capital structure to 60% debt and 40% equity using 10% debt financing, what will be the beta of the levered firm?
Answer: 3.7
Explanation:
From the question, we are informed that the beta of an all equity firm is 1.6, thee beta of debt is 0.2 and further that the firm changes its capital structure to 60% debt and 40% equity using 10% debt financing.
The beta of the levered firm will be calculated as:
= Beta unlevered + (Beta unlevered - Beta debt) × D/E
= 1.6 + [(1.6-0.2) × 60/40]
= 1.6 + [1.4 × 1.5]
= 1.6 + 2.1
= 3.7
Answer is B. 3.7
A time standard was set as 0.20 hour per unit based on the 20th unit produced. Assume the task has a 75 percent learning curve. Refer to Exhibit 6.4. What would be the expected time of the 40th, 80th, and 160th units? (
Answer:
0.2 hours = 12 minutes required to produce the 20th unit
I used an online learning curve calculator to solve this question
40th unit
the time it takes to produce the 40th unit = cumulative time required to produce 40 units - cumulative time required to produce 39 units. Since we are given the time to produce the 20th unit, then we must adjust our formula (12 minutes will be used as the time required to produce 1 unit) ⇒ cumulative time required to produce 20 units - cumulative time required to produce 19 units = 105.940 minutes - 102.479 minutes = 3.461 minutes
80th unit
we will modify all our calculations in the same way as before in order to determine the expected time of the 80th and 160th units:
the time it takes to produce the 80th unit = time required to produce 60 units - time required to produce 59 units = 211.990 minutes - 209.796 = 2.194 minutes
160th unit
the time it takes to produce the 160th unit = time required to produce 140 units - time required to produce 139 units = 356.020 minutes - 354.477 = 1.543 minutes