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2 years ago

The federal funds rate is the interest rate on _, and it is controlled by the _.

1 answer:

4 0

The federal funds rate is the interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions. reserves that banks lend to each other; Federal Open Market Committee

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Jiminy’s Cricket Farm issued a bond with 30 years to maturity and a semiannual coupon rate of 4 percent 2 years ago. The bond cu

slega [8]

Answer:

Explanation:

The pretax cost of debt is the YTM of the bond and the aftertax cost of debt is tax-adjusted. You can use a financial calculator and key in the following inputs.

note: adjust the recurring payment and time to semiannual basis.

Maturity of the bond as of today; N = 28*2 = 56

Price of the bond; PV = -( 1.07 * 1000) = -1,070

Face value of the bond ; FV = 1,000

Semi-annual payment; PMT = (4%/2)*1,000 = 20

Compute semiannual interest rate ; CPT I/Y = 1.801%

Next, convert the semiannual rate to annual rate(YTM) = 1.801% * 2 = 3.60%

Therefore, pretax cost of debt is 3.60%

Interest paid on borrowed money (debt) has tax benefits through interest tax shield. Based on this, the after tax cost of debt can be calculated. You can solve it by adjusting the pretax cost of debt to incorporate this tax benefit. The formula is as follows;

Aftertax cost of debt = Pretax cost of debt (1-tax)

Aftertax cost of debt = 0.0360(1-0.21) = 0.02844 or 2.84%

8 0

2 years ago

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's una

Maru [420]

Answer:

Option E is the correct answer

5300$ is the correct answer.

Explanation:

Credit Sales = $800000

Uncollectible net sales = $800000*0.6% = $4800

Hence, balance in Allowance for uncollectible accounts after adjustment should be $4800 credit

Balance already in the account = $500 debit

Hence, adjustment required is $5300 credit

8 0

3 years ago

An x-ray machine at a dental offi ce is MACRS 5-year property. The x-ray machine costs $6,000 and has an expected useful life of

Brrunno [24]

Answer:

The correct answer is $2,637.31.

Explanation:

According to the scenario, the computation of the given data are as follows:

Cost of machine = $6,000

According to MACRs table depreciation for first 3 years are as follows:

Depreciation for 1st year = 20%, for 2nd year = 32% and for 3rd year = 19.2%

So, Cost of machine after 1st year = $6,000 - 20% × $6,000 = $6,000 - $1,200

= $4,800

Cost of machine after 2nd year = $4,800 - 32% × $4,800 = $4,800 - $1,536

= $3,264

Now, Cost of machine after 3rd year = $3,264 - 19.2% × $3,264

= $3,264 - $626.688 = $2,637.312

So, the book value at the end of three years = $2,637.31

3 0

3 years ago

Warren and shirley want to avoid having a balance due next year. which of the following can they do

Vinil7 [7]

Warren can submit Form W-4V to have taxes withheld from his Social Security is <span>Warren and shirley want to avoid having a balance due next year.

Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.
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3 0

2 years ago

Select sales companies offer of shares of stock in itself to anyone who is willing to pay $60 per share is

LiRa [457]

Select Sales Companies offer of shares of stock in itself to anyone who is willing to pay $60 per share is a public offering. A public offering is the offering of securities of a company to the public. Generally, the securities are to be listed on a stock exchange. Businesses usually go public to raise capital in hopes of expanding.

7 0

2 years ago

The federal funds rate is the interest rate on _____, and it is controlled by the _____.

The federal funds rate is the interest rate on _, and it is controlled by the _.