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Lelu [443]
3 years ago
8

Assume that a $1,000,000 par value, semiannual coupon US Treasury note with four years to maturity has a coupon rate of 4%. The

yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $874,669.10 $551,041.53 $743,468.74 $1,049,602.92
Business
1 answer:
ExtremeBDS [4]3 years ago
6 0

Answer:

Explanation:

the present value of the future cash flows is the the value of the bond we calculate the present value as follows

Cash flow  4% = 40000 per year for 4 year p.v using annuity

Cash flow = 1000000 at year four present value using compound formula

Present value at yield rate 7.7%

Cash flow Discount Factor Present Value

1000000 0.743253883           743253.8831

40000         3.334365155           133374.6062

                                            876628.4893

Compound = 1000000/(1+7.7%)^4

Annuity       = 40000*  (1-(1+7.7%)^-4) / 7.7%

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Beach bake, a small maker of a new sunscreen, needs financing to build a warehouse. the owner wants to avoid personal loans. wha
Helen [10]

Beach Bake, a small maker of a new sunscreen, needs financing to build a warehouse. The owner wants to avoid personal loans. Asset-based financing I would recommend.

What is asset based financing?

Working capital and term loans are given to businesses using a specific technique called asset-based finance. As collateral, it uses real estate, accounts receivable, machinery, equipment, and inventories. When a loan to a corporation is backed by one of the company's assets, it is effectively referred to as a secured loan.

How do asset-based loans work?

Asset-based lending refers to a loan or line of credit given to a company and secured by a piece of property. Inventory, equipment, accounts receivable, and other balance-sheet assets are just a few examples of the different types of collateral utilized in asset-based lending.

Learn more about secured loan: brainly.com/question/17077155

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5 0
1 year ago
The ______ of real estate markets makes it impossible to generalize the impact events in other areas will have on real estate va
goldenfox [79]

Answer: uniqueness

Explanation:

8 0
2 years ago
The Texas state _________ commissioner is an elected official responsible for administration and oversight of state-owned lands
kramer

Answer:

Land.

Explanation:

In the U.S. State of Texas, the Texas General Land Office is an agency of the Texas state. This agency is responsible for overseeing lands and mineral rights resources that are under the ownership of the state. This agency is headed by the Land Commissioner of the Texas State. The constitutional purpose of the agency was to "supervise, execute and employ all acts that touch the public lands of Texas.

8 0
3 years ago
Jimmy Company’s cash balance at the end of the month was $8,500. After comparing the company’s records with the monthly bank sta
Elodia [21]

Answer:

The answer is C) $7,970.

Explanation:

We have 04 reconciling items as below:

- Outstanding checks $800: this amount was already recorded in the Cash account of the company once the check was written; thus, the Cash ending balance has already reflected this amount.

- Deposits in transit $700: this amount was already recorded in the Cash or Cash-equivalent account of the company once the deposit was made; thus, the Cash ending balance has already reflected this amount.

- Bank service charge $30: fees paid to banking activities and are deducted without informing to the company. Thus, this deduction in cash is not reflected in the Cash account.

-  NSF check $500: this was recorded as the increase in Cash account by the company once the check was written by the person/entity to the company. However, the writer's account balance was not sufficient to honor this check amount to the company; thus Cash Account at the end of the period should reduced by $500. Instead, this $500 may be recorded in Account Receivable account.

Thus, the adjusted cash balance = 8,500 - 30 - 500 = $7,970.

7 0
3 years ago
Your company is considering a new project that will require $10,000 of new equipment at the start of the project. The equipment
zmey [24]

Answer:

Estimate the present value of the tax benefits from depreciation:

D. $1,851

Explanation:

<em>Step 1: Determine annual depreciation</em>

A.D=(A.C-S.V)/N

where;

A.D=annual depreciation

A.C=acquisition cost

S.V=salvage value

N=useful life

In our case;

A.D=unknown, to be determined

A.C=$10,000

S.V=$3,000

N=5 years

replacing;

A.D={(10,000-3,000)/5}=7,000/5=$1,400

Annual depreciation=$1,400

<em>Step 2: Determine annual tax benefits</em>

Annual tax benefits=tax rate×annual depreciation

where;

tax rate=34%=34/100=0.34

annual depreciation=$1,400

replacing;

Annual tax benefits=0.34×1,400=$476

<em>Step 3: Determine present value of the annual tax benefits</em>

Year                  Future value                Present value

 1                          476                            476/{(1+0.09)^1}=436.70

 2                         476                            476/{(1+0.09)^2}=400.64

 3                         476                            476/{(1+0.09)^3}=367.56

 4                         476                            476/{(1+0.09)^4}=337.21

 5                         476                            476/{(1+0.09)^5}=309.37

Total present value of the tax benefits=436.70+400.64+367.56+337.21+309.37=$1,851.48

Estimate the present value of the tax benefits from depreciation=$1,851

3 0
3 years ago
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