Answer:
after-tax cost of debt 5.2725%
Explanation:
We will solve for the market rate of the bonds which is the one that makes the maturity and coupon payment equal to its current market price:
We sovle it using a financial calcualtor or excel goal seek tool
C 110.000 (1,000 x 11%)
time 10 years
<em>rate 0.070304812</em>
PV $771.5066
Maturity 1,000
time 10 years
<em> rate 0.070304812</em>
PV 506.90
PV c $771.5066
PV m $506.9034
Total $1,278.4100
Now that we find that market rate is 7.03%
we calcautle the after tax cost of debt:
7.03 x (1 - 25%) = 5.2725%
Answer:
90.3 ; 157.4 ; 176.9 ; 79.9
Explanation:
Given that:
Estimated demand trend line (in millions of kilowatt hour) for North Dakota Electricity company is :
D = 80.0 + 0.45Q,
Q = quarter number
Quarter Factor (Index)
Winter 0.72
Spring 1.25
Summer 1.40
Fall 0.63
In year 26 (quarters 101-104):
Energy use (E) for each quarter = (Demand * quarter factor)
Winter ; Q = 101
E = [80.0 + 0.45(101)] * 0.72 = 90.3
E = [80.0 + 0.45(102)] * 1.25 = 157.4
E = [80.0 + 0.45(103)] * 1.40 = 176.9
E = [80.0 + 0.45(104)] * 0.63 = 79.9
Answer:
C Certain groups of employees only
Explanation:
The tax sheltered annuity is a special tax regarding the retirement plan that available to a specific employees group only that engaged in non-profit, education, other 501c3 organization etc
So according to the given situation, the option C is correct as it fits to the situation
Therefore the other options are wrong
Answer:
Option B:
inferior good; elasticity is negative
Explanation:
The income elasticity of demand is a measure of the rate at which a particular commodity is demanded, even after there is a change in the real income of the consumers.
It is a known fact that for inferior goods, once the real income of the consumers increases there is a higher tendency for them to switch to other premium commodities. Such goods are said to have a negative elasticity.
The income elasticity of demand can be calculated with this formula
percentage change in quantity demanded / percentage change in income.
If this gives a value that is less than 1, it means that the percentage change in the quantity of goods demanded is actually less than the percentage change in the income level of the consumers. Hence, the good is an inferior good. This is because when the consumers are earning more, they buy less of the product.
