12.0 years will take for these bonds to mature.
What is a coupon in bonds?
The term "coupon," which is also sometimes referred to as "coupon payment," refers to the annual interest rate that is paid on a bond from the date of issuance until maturity. It is described as being a percentage of the bond's face value. When discussing coupons, the coupon rate is frequently employed.
How does coupon rate affect bond price?
The price of bonds is significantly influenced by the coupon rate on a bond in comparison to current market interest rates. Bond prices increase when a coupon is more than the current interest rate; prices decrease when a coupon is lower.
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Answer:
(A) A component lifestyle.
Explanation:
Component lifestyle:-It is choosing goods and services that fulfills one's various needs and interests rather than following a single, traditional stereotype.
So according to the question Ruth is a person having various interests and also a police officer by profession.So she has very diverse needs and interest and they affects her choice of goods and services because she wants goods and services that meet's her diverse needs.So her lifestyle is component.
Answer:
The solution shows that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%.
Explanation:
The IRR or internal rate of return is the rate at which NPV or Net Present Value of the investment becomes zero. We are provided with the initial outlay for the project and the annual cash inflows along with time period. Using the annuity factors given below, we need to find out the factor which makes the NPV zero. The NPV is calculated as follows,
NPV = Present Value of Cash Inflows - Initial Outlay
We can try out each annuity factor and see what NPV is generates.
1. 6% rate (Annuity factor = 5.582)
NPV = (30000 * 5.582) - 146040
NPV = $21420
2. 8% rate (Annuity factor = 5.206)
NPV = (30000 * 5.206) - 146040
NPV = $10140
3. 10% rate (Annuity factor = 4.868)
NPV = (30000 * 4.868) - 146040
NPV = $0
So, from the above solution we can see that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%