Answer:
The answer is 0.3%
Explanation:
nominal risk free rate for 10 years = 3.7 + 1.5 = 5.2
nominal risk free rate for 30 years = 4.0 + 1.5 = 5.5
Therefore maturity risk premium is 5.5 - 5.2 = 0.3%
Answer:
- Dr Dividends Declared 12,300
- Cr Dividends Payable 12,300
Explanation:
First we must determine how many shares are outstanding:
23,000 shares issued - 5,000 shares held= 18,000 shares outstanding
Then we multiply shares outstanding times dividends per share:
18,000 shares outstanding x $0.70 per share = $12,300
- Dr Dividends Declared 12,300
- Cr Dividends Payable 12,300
Answer:
Statement of Cash Flows
Cash from operating activities
Net Income $24,000
Adjustments to reconcile net income with
net cash flow from operating activities:
Depreciation 12,000
Increase in accounts receivable (10,000)
Decrease in inventory 16,000
Salaries payable increase <u> 1,000 $19,000</u>
Net cash flow : Operating activities $43,000
Answer:
The correct answer is:
5.0 percent deflation between the first and second years, and 3.0 percent deflation between the second and third years. (a)
Explanation:
to calculate the percentage deflation, we will simply calculate the percentage change in price between the years stated. This is calculated as follows:
% change = 
Note that the negative sign shows a deflation.
if you use the same method for years two and three, you should get -3%, using P₁ as 142.5 and p₂ as 138.2. Hence option 'a' is correct.
Bob has to own his land for 18 years if the price is increasing at the rate of 6% per year.
Given that land was bought by Bob for $16390, the price is increasing at the rate of 6%, price of land today is $46817.
We are required to find the time for which Bob need to own the land so that the price of the land is $46817 today.
Compounding means calculating amount on the principal and the amount added interest.
Rate of increasing the price of land be 6%.
Price when Bob bought the land=$16390.
Price of land today=$46817.
It is like compounding of interest and the sum is calculated as under:
S=P*
In the above equation P is theamount at beginning,r is rate of increasing and n is the number of years.
46817=16390
46817/16390=
=2.8564
=
(Approximately)
From both the sides we will get n=18.
Hence Bob has to own his land for 18 years if the price is increasing at the rate of 6% per year.
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