ANSWER ONLY IF YOU KNOW

When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk. True or false?.

ValentinkaMS [17]

True,When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk

A bond is a sort of financial security in which the issuer owes the bearer a debt and is obligated to repay the principle of the bond as well as interest over a specified period of time, depending on the terms. Interest is normally paid at regular intervals.

Bonds are one way for businesses to raise funds. A bond is a loan made between an investor and a firm. The investor agrees to contribute the corporation a particular sum of money for a set length of time. In exchange, the investor receives interest payments on a regular basis.

To know more about bond follow the link:

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5 0

2 years ago

A _______ is an organization that is NOT presently in a task environment but has the resources to enter if it so chooses. potent

Kisachek [45]

Answer: Potential competitor

Explanation:

Potential competitor is a competitor

who offers the same product and works in the field.

who has the potential to compete with you.

they could be a direct competitor, but either they don't try or don't have infrastructure.

Hence, A p<u>otential competitor</u> is an organization that is NOT present in a task environment but has the resources to enter.

On the other hand, as a supplier is a party or organization that provides a product or service and distributor distributes them.

7 0

3 years ago

2. In 2016; the cost of a market basket of goods was $2,000. In 2018, the cost of the same market basket of goods was

GREYUIT [131]

Answer:

105

Explanation:

base year = 2016

cost of market basket of goods in base year = $2,000

CPI for base year = 100

year 2018

cost of market basket of goods in 2018 = $2,100

CPI for 2018 = (cost of basket of goods in 2018 / cost of basket of goods in base year) x 100 = ($2,100 / $2,000) x 100 = 105

7 0

3 years ago

On March 31, 2021, Canseco Plumbing Fixtures purchased equipment for $56,000. Residual value at the end of an estimated four-yea

77julia77 [94]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Purchasing price= $56,000

Residual value= $2,000

Estimated useful life= 4 years

A. To calculate the depreciation expense under the straight-line method, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (56,000 - 2,000)/4

Annual depreciation= 13,500

2021= (13,500/12)*= $10,125

2022= 13,500

B. To calculate the depreciation expense under the double-declining balance method, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

2021= [(2*13,500)/12]*9= $20,250

2022= [(54,000 - 20,250)/4]*2= $16,875

C. To calculate the depreciation expense under the units of production method, we need to use the following formula:

Annual depreciation= [(original cost - salvage value)/useful life of production in hours]*hours operated

The company expects the equipment to operate for 15,000 hours. The equipment operated for 3,500 and 4,300 hours in 2021 and 2022, respectively.

2021= (54,000/15,000)*3,500= $12,600

2022= 3.6*4,300= $15,480

3 0

3 years ago

John and Sally Claussen are considering the purchase of a hardware store from John Duggan. The Claussens anticipate that the sto

Marina CMI [18]

Answer:

Explanation:

Calculate maximum that should pay:

Compute present value of cash flows from the store, year 1 to 5 :

Annual cash flows are $70,000

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 1 to 5 years =

= $287,013.82

Compute present value of cash flows from the store for years 6 to 10

Annual cash flows are $70,000

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 6 to 10 years = annual cash flows x PVIFA (10%,5) x PVIF (7%,5)

= $70,000 x 3.79079 x 0.7130 = $189,198.33

Compute present value of cash flows from the store for years 11 o 20

Annual cash flows are $70,000

Desired rate of return on investment for 11 to 20 years is 12%

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 10

Present value of cash flows generated during 11 to 20 years = [annual cash flows x PVIFA (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

= $70,000 x 5.65022 x 0.62092 x 0.7130 = $175,100.98

Calculate present value of estimated sale amount to be received for sale of store

Present value of estimted sale amount to be received = [Estimated sale amount x PVIF (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

=$400,000 x 0.32197 x 0.62092 x 0.7130=

=$57,016.50

Calculate total maximum amount that should be paid

Particulars Amount ($)

Present value of cash flows during 1 to 5 years $287,013.82

Present value of cash flows during 6 to 10 years $189,198.33

Present value of cash flows during 11 to 20 years $175,100.98

Present value of estimated sale value $57,016.50

Maximum amount that C should pay to JD for store $708,329.63

Therefore, Maximum amount that should be paid $708,329.63

4 0

3 years ago