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1 year ago

What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?

1 answer:

3 0

The present value of of $6,811 to be received in one year if the discount rate is 6.5 percent will be $6, 395.31.

What does Present Value mean?

A financial concept that calculates the current value of a future sum of money or stream of cash flows is present value. It's used to compare the relative worth of different amounts of money that aren't available at the same time. The inverse of future value. The sum of future investment returns discounted at a specified rate of return is calculated as the present value of money you expect from future income.

What is Financial concept?

Financial concepts are the fundamental principles and theories of finance, which provide guidance on how to assess and manage financial risks, return, and value. These concepts include the time value of money, diversification, risk-return trade-off, capital budgeting, and portfolio selection. Financial concepts are essential for making sound financial decisions and investments.

The procedure to find an present value:

Present Value = FV/ (1+i)^n

6,811/(1+0.065)^1

6, 395.31

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Atom Endeavour Co. issued $21 million face amount of 4.0% bonds when market interest rates were 4.46% for bonds of similar risk

Eduardwww [97]

Answer:

A. $840,000

B. Discount

C. Annual interest expense on these bonds will be more than the amount of interest paid each year.

Explanation:

Data

Bonds issued = $21,000,000

Coupin rate = 4.0%

Market Interest rate = 4.46%

Requirement A: Annual interest amount

Interest amount = Bonds issued x coupon rate

Interest amount = $21,000,000 x 4.0%

Interest amount = $840,000

Requirement B: Whether it is Premium or Discount?

Bonds that Atom Endeavour Co. issued are discount as you can clearly see in the data that the market rate is higher than the coupon rate. Investors who will buy these bonds surely expect a capital gain.

Requirement C:

The discount on the issue of bonds is amortized to interest expense over the life of the bond, therefore the interest expense on these bonds will be more than the amount of interest paid each year,

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3 years ago

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When pietro, a new restaurant owner, is determining which products to offer on his menu, he is involved in the management function of planning.

This statement is true.

Planning means looking ahead and chalking out the future courses of action to be followed. It is a preparatory step of every management . It is a systematic activity which determines the process of when, how and who is going to perform a specific job.

Planning is a detailed programme which is related to future courses of action.

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Use your notes to explain how prices affect demand.

abruzzese [7]

Answer:

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