Answer:
The answer is:
Helps the government and a homeowner with a fixed-rate mortgage
But hurts a union worker in the second year of a labor contract and a college that has invested some of its endowment in government bonds
Explanation:
The government: This unexpected Increase in inflation help the government in the sense that it reduces the real value of government debts(it erodes the purchasing power of the debtors). It also increases the tax revenue.
A homeowner with a fixed-rate mortgage: This unexpected Increase in inflation also pays this category because the interest rate he is paying for his mortgage is less than the prevailing interest rate.
A union worker in the second year of a labor contract: This unexpected increase hurts this worker because the terms of the contract would have been based on the expected inflation rate(3%) but for this unxpected increase, its purchasing power will be eroded.
A college that has invested some of its endowment in government bonds: It hurts the college because higher inflation rate means the college is receiving a lower interest payment from the bond.
Answer:
a. Revenue is earned when when service or product are delivered to client. Thus Seacoast Magazine should recognize the revenue when it mails the magazines to its subscribers.
b. Total amount received is $60 for 30 issues.
Amount for 1 issues = Total cost / Number of issues of magazines = $60/30 = $2 per issue
Amount of 5 issues = $2 * 5 = $10
Therefore, Seacoast Magazine should record revenue $10 for 5 issues.
Answer:
"Perhaps we should explore which stakeholders would stand to win or lose from such a decision."
Explanation:
An ethical decision is one that is aimed towards generating trust from other parties. It shows responsibility, fairness, and caring towards a person.
In this scenario your manager suggests you postpone processing any existing claims in the 4th quarter until the new fiscal year (some claims are as high as $150,000).
The best ethical response will be - Perhaps we should explore which stakeholders would stand to win or lose from such a decision.
This will result in self reflection about who will be affected by the decision. The consideration will not be just the immediate 4th quarter impact of postponing the warranty claims.
This is the most ethical decision among the options.
Answer:
convexity = 37.6306
Explanation:
given data:
maturity time = 7 years
yield to maturity (y) = 8% = 0.08
coupon bond = 6%
price= $89.59 ( gotten from the summation of pv(cf) from the table attached below )
t = time
convexity can be found using this formula
= 
= 37.6306
