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Contact [7]
3 years ago
8

Harrison Co. issued 13-year bonds one year ago at a coupon rate of 8 percent. The bonds make semiannual payments. If the YTM on

these bonds is 5.7 percent, what is the current dollar price assuming a $1,000 par value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current bond price

Business
1 answer:
alex41 [277]3 years ago
6 0

Answer:

$1,197.94

Explanation:

For determining the current dollar price we have to applied the present value formula which is to be shown in the attachment below:

Given that,  

Future value = $1,000

Rate of interest = 5.7%  ÷ 2 = 2.85%

NPER = (13 years  - 1 years) × 2 = 24 years

PMT = $1,000 × 8% ÷2  = $40

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

After applying the above formula, the current dollar price of the bond is $1,197.94

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If the returns are constant to scale, the output increases by the same as the increase in inputs, therefore, it would double.

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3 years ago
Lasch Co. recorded a right-of-use asset of... I. Lasch Co. recorded a right-of-use asset of $200,000 in a 10-year operating leas
svet-max [94.6K]

Answer:

187, 450.00

Explanation:

Cost of the asset : $ 200,000.00

Interest rate at 10 %

Payment per year = 32,550.00

First year total amount due = 10% plus asset cost

= ($200,000x 10/100)= 200,000

=$20,000+200 000

=$220,000.00

After deduction = $220,000- 32, 550

   =$ 187, 450.00

4 0
3 years ago
The Bears Corporation has provided you the following information:Increase in accounts receivable balance 50,000 Net sales 500,00
Sliva [168]

Answer:

A. cash collected is 442,500

B. Cash paid to suppliers is 62,000

Explanation:

A. To determine the cash collected for the period, the account that we should analyze is the accounts receivable.

Net sales 500,000

Less: Increase in accounts receivable 50,000

Less: write off 7,500

total collection 442,500

*increase in accounts receivable means lesser amount of collection than the sale on account

*write off will decrease the accounts receivable which means, it affects the cash collection computation.

B.To determine the cash paid to suppliers, let’s analyze the accounts payable account.

Increase in inventory 45,000

add: decrease in accounts payable 17,000

total cash paid to suppliers is 62,000

*increase in inventory implies an additional purchase made by the company

*decrease in accounts payable resulted from cash payment made to suppliers.

5 0
3 years ago
A firm decides to provide support services for its products for which its customers will pay extra. These services are not offer
Sindrei [870]

B) Added value

Explanation:

Added value - It is an improvement to the product or service making it more worthwhile.

Competitive advantage makes the product or service more desirable than other competitors.

In this scenario, there is no competition of the services as yet, but definitely has an added value by improving the services.

3 0
3 years ago
Read 2 more answers
A firm has an issue of $1,000 par value bonds with a 8 percent stated interest rate outstanding. The issue pays interest annuall
dem82 [27]

Answer: $1268.20

Explanation:

value of the bond today = Present value of coupon (interest) payments + present value of principal = 120[PVOAIF8%, 10] + 1000[PVIF8%, 10] =1,268

6 0
3 years ago
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