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astraxan [27]
3 years ago
9

You find a zero coupon bond with a par value of $10,000 and 30 years to maturity. The yield to maturity on this bond is 5.2 perc

ent. Assume semiannual compounding periods. What is the price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
muminat3 years ago
7 0

Answer:

The price of the bond is 2143,67

Explanation:

A zero coupon bond is a bond that does not pay coupon payments and instead pays one lump sum at maturity.

Zero coupon bond value= F/(1+r)^t

F = face value or a par value

r= rate of yield per period

t= time to maturity ( in periods)

Replacing

F = $10,000

We assume semiannual compounding periods

r= 5.2/2=2.6

t= 30 x 2=60

Zero coupon bond value= $10,000/(1+0.026)^60

Value = 2143,67

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A city government adds streetlights within its boundaries at a total cost of $300,000. These lights should burn for at least 10
tekilochka [14]

Answer: See explanation

Explanation:

a. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements.

1. Debit: Infrastructure assets—street lights $300,000

Credit: Cash $300,000

(To record cash purchase of street light

2. Debit: Depreciation expense $300,000/10 = $30,000

Credit: Accumulated depreciation—infrastructure assets $30,000

(To record depreciation expense)

3. Debit: Maintenance expense—infrastructure assets $48000

Credit: Cash $48000

(To record maintenance expense)

4. Debit: Infrastructure assets—street lights $78000

Credit: Cash $78000

(To record cash expense for new light)

b. Prepare the entries assuming infrastructure assets are capitalized with government using the modified approach on government-wide financial statements.

1. Debit: Infrastructure assets—street lights $300,000

Credit: Cash $300,000

(To record purchase of street light)

2. Debit: Maintenance expense—infrastructure assets $48000

Credit: Cash $48000

(To record maintenance expense)

3. Debit: Infrastructure assets—street lights $78000

Credit: Cash $78000

(To record cash expense for new light)

3 0
2 years ago
Match each type of savings account with its features
ExtremeBDS [4]
Stock-rises and falls with market
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8 0
2 years ago
Read 2 more answers
As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in use
alexgriva [62]

Answer:

Depreciation

Explanation:

Depreciation is the systematic allocation of estimated cost to an asset. Methods include straight line, sum of the year digits, double declining etc. The entries for recognizing this cost are;

Debit depreciation expense

Credit Accumulated depreciation

Hence to account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called depreciation.

6 0
3 years ago
How is the spending multiplier effect related to demand-side economics?
Bess [88]
Because of the Spending multiplier effect, small investment changes will create larger changes, and macroeconomic policy will undergo some improvements and expenditures

Hope this Helps :D     
8 0
2 years ago
Assume that sales are predicted to be $4,000, the expected contribution margin is $1,720, and a net loss of $280 is anticipated.
Alexeev081 [22]

Answer:

e)  $4,651

Explanation:

The break-even point is the level of activity that a company must operate to have its total cost equal to its total revenue. At this level of activity, the business makes a zero profit, as the total contribution is exactly the same as the total fixed cost.

It is important for the business to have an idea of the number of customers or units of product to sell inorder for it to cover its total fixed cost. This is the information the break-point analysis seeks to provide.

Working it out

Break-point in sales = Total General fixed cost/ Contribution margin ratio

Contribution margin ratio (CMR): Contribution is sales less variable costs. And the contribution margin ratio is the proportion of sales that is earned as contribution. The higher the better.

CMR = contribution/sales

Fixed cost = Contribution + net loss

We can now apply all these relationships to the question given:

Fixed cost = 1720 + 280

                 = 4,000

Contribution margin ratio = 1720/400 = 43%

Break-even sales ($) = 4000/0.43

                                        = $4,651

3 0
3 years ago
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