Answer:
Multiple choices below are missing:
A) purchase Bond A
B) purchase Bond B
C) purchase neither A nor B at this time
D) negotiate a higher rate on Bond A
The correct option is A,purchase bond A.
Explanation:
By purchasing Bond A,Lee is assured interest payment of 7.5% for a period of twenty years,hence the issuer cannot call the bond if interest rate drops by 2% in order to issue a lower interest-bearing bond which would be cheaper cost-wise.
However, if Lee purchases Bond B with current coupon of 8.25%,the interest is only guaranteed for a period of two years,since the issuer has the prerogative of calling back the bond after two years should interest fall in order to issue another bond that commands lower interest rate.
Answer:
Market
Explanation:
Producer surplus is the difference between the market price and the minimum price at which a producer would be willing to sell a particular quantity.
Producer surplus is known to be the total amount that a producer benefits or gains from producing and selling a quantity of a good at the market price. The total revenue that a producer receives from selling their goods minus the total cost of production equals the producer surplus.
Answer:
$434,780.69
Explanation:
The computation of the large the ballon payment would be is determined by using the future value formula i.e. to be shown in the attachment
Provided that
Present value = $295,000
Rate of interest = 5.9% ÷ 12 months = 0.49166%
NPER = 35 years × 12 months = 420 months
PMT = $1,350
The formula is shown below:
= -FV(Rate;NPER;PMT;-PV;type)
So, after applying the above formula, the future value is $434,780.69
Answer:
$1,583
Explanation:
Accounts receivables as at 31/12/2021 = $236,000
A/R as at 31/12/2022 :
= Accounts receivables as at 31/12/2021 + increase in AR
= $236,000 + $22,300
= $258,300
Uncollectible accounts = 1% of accounts receivables
= 1% × $258,300
= $2,583
Allowance 31/12/2021 = $8,400
Writes off = $7,400
Therefore,
Allowance = Allowance 31/12/2021 - writes ofd
= $8,400 - $7,400
= $1,000
Hence,
Bad debt expense for 2021 = Uncollectible accounts - Allowance
= $2,583 - $1,000
= $1,583
<span>If the required reserve ratio, m, is 20 percent, then the oversimplified money multiplier is five. The money multiplier is also called as the monetary multiplier and the multiplier effect. It usually depends on the amount of the various deposits. </span>
