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Usimov [2.4K]
3 years ago
9

Vangaurd Health System bonds have an annual coupon rate of 8 percent and a par value of $1,000 and will mature in 20 years. If y

ou require a 7 percent return, what price would you be willing to pay for a Vangaurd bond
Business
1 answer:
Umnica [9.8K]3 years ago
8 0

Answer:

Price willing to pay=$1105.94

Explanation:

Annual Coupon Payment=$1,000*0.08

Annual Coupon Payment=$80

Calculating Present Value (PV) of Par Value:

PV=\frac{FV}{(1+i)^{20}}

Where:

i is the rate of return.

FV is par value

PV=\frac{\$1000}{(1+0.07)^{20}}

PV= $258.419.

Calculating PV of annual Coupon Payment:

PV=A\frac{1-(1+i)^{-20}}{i}

i is the coupon rate

A is the annual Payment

PV=\$80\frac{1-(1+0.07)^{-20}}{0.07}

PV=$847.521

Price willing to pay= Present Value (PV) of Par Value+ PV of annual Coupon Payment

Price willing to pay=$258.419+$847.521

Price willing to pay=$1105.94

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Apex Systems Co. offers its services to residents in the Seattle area. Selected accounts from the ledger of Apex Systems Co. for
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Answer:

Explanation:

The preparation of the statement of stockholders' equity at the end of the year is presented below:

                                          Apex Systems Co.

                             Statement of stockholders' equity  

                            For the fiscal year ended December 31, 2016

Particulars                  Common Stock          

Beginning

Balance                      $1,340,000

Add: Net income       $356,000    

Less:

Bart Nesbit, Drawing  -$91,200

Ending balance          $1,604,800                

                       

6 0
3 years ago
In the year 2020, a divorced woman under age 50 collects $50,000 of alimony and child support as her sole source of income. The
NikAS [45]

The available options are:

A. No contribution can be made because the woman does not have earned income

B. A contribution of up to $6,000 is permitted, but the contribution is not tax deductible.

C. A tax deductible contribution of up to $7,000 is permitted

D. A tax deductible contribution of up to $9,000 is permitted

Answer:

No contribution can be made because the woman does not have earned income

Explanation:

Unlike in the previous years before 2019, concerning divorce agreements, alimony is now declared to be no longer deductible by the payor and at the same time is considered to be a tax-free income to the recipient. In essence, this indicates that alimony is no longer qualifies as earned income and therefore, cannot be utilized to fund an Individual Retirement Account.

Hence, in this case, since it is , year 2020, the correct answer is "No contribution can be made because the woman does not have earned income."

8 0
2 years ago
Johann, a well-known musician, agrees to give ten guitar lessons to Elton for $2,000. Nothing in the contract itself prohibits a
Softa [21]

Answer:

The correct answer is (b)permitted because the contract is just for music lessons.

Explanation:

Recall that,

Johann,  a well known musician  agrees to give out ten lessons of guitar to Elton for an amount of $ 2000. this contract forbids delegation.

Since Johann delegates his obligation to Eugene who is a second year student in music, then his delegation is only allowed because the contract is to take music lessons and nothing more.

7 0
2 years ago
Boyd's Bicycle Sales and Repairs Co. offers a 6-month warranty on all new bicycle purchases. Based on history, Boyd determines t
guapka [62]

Answer:

Boyd will record Warranty Expense in the amount of $400 for the month.

Explanation:

Warraty expense is an obligation on the business because business idmliable to accept the claims of warranty. A estimated percentage of warranty expense is charges as an expense in each period.

Sales = $20,000

Warranty repair = 2% of Sales

Warranty Expnese = Sales x Warranty repairs percentage

Warranty Expnese = $20,000 x 2%

Warranty Expnese = $400

4 0
3 years ago
Zoe Corporation has the following information for the month of March: Purchases $92,000 Materials inventory, March 1 6,000 Mater
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,Answer:

                                               Zoe Corporation

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Direct Materials:

Materials inventory, March 1                               6,000  

Purchases                                                          92,000    

Less Materials inventory, March 31              <u>   ( 8,000)</u>

Cost of Materials used in Production                               90,000

Direct Labor                                                                        25,000

Factory Overhead                                                             <u>  37,000</u>

                                                                                                            <u>   152,000</u>

Total Manufacturing Cost                                                                      174,000

Less Work in Process Inventory, March 31                                       <u>   (23,500)      </u>

Cost of Goods Manufactured                                                              150,500

7 0
3 years ago
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