Answer:
<em>The future value of the investment will be $3,754</em>
Explanation:
<u>Future Value of Investment</u>
Suppose we have a principal P invested for a period of n years at an interest rate i compounded annually. The final value or future value FV of the investment can be computed by:
The case we are considering consists of a present value P=2,000 that will be used to purchase a n = 10-year certificate of deposit (CD). It pays i=6.5% interest. When the CD matures, 10 years from now its value will be
The future value of the investment will be $3,754
Answer:
Interest expense = $8453
Explanation:
We can calculate Bond interest expense by multiplying Carrying value of the bond with the effective interest rate and the period of time,
DATA
Carrying value of bond = $169,056
Effective interest rate = 10%
Period of time = 6 months
Interest expense =?
Calculation
Interest expense = Carrying value x Effective interest rate x Time period
Interest expense = $169,056 x 10% x
Interest expense = $8453
Answer:
(A)
240,000 margin of safety in dollars
20% as percent of sales
(B)
actual sales= 11,250,000
Explanation:
1,200,000 - 960,000 = 240,000 margin of safety in dollars
240,000/1,200,000 = 0.2 x 100 = 20%
For B we will determinate the BEP in dollars and then add the 20% margin of safety.
BEP = 9,375,000
BEP x ( 1+margin of safety) = actual sales
BEP x (1 + 20%) = 11,250,000