<u>Ajinomoto will likely not have an incentive to increase or change its output of MSG.</u>
Remember, marginal cost focuses on the increase in cost additional unit of a product. Therefore, based on the limited information provided, Ajinomoto's decision will likely be based on it's market share. If the marginal cost equals zero, and it has more of the market share it will likely not influence them to change or increase their output.
Current Yield of the bond = 0.057134 or 5.7134% rounded off to 5.71%
A current yield refers to the annual return that a security provides based on the interest or dividend payments it makes expressed as a percentage of it current price. Thus, the current yield on bond can be calculated as follow,
Current Yield - bond = Interest payment per year / Current price
To calculate the current yield, we need the present value or current price of the bond.
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 1000 * 0.056 * 6/12 = $28
Total periods (n) = 15 * 2 = 30
r or YTM = 0.058 * 6/12 = 0.029 or 2.9%
The formula to calculate the price of the bonds today is attached.
Unearned/ deferred revenue is money obtained from a customer for a service that is yet to be rendered or for a product yet to be delivered. In accounting terms, unearned revenue is recorded as a liability on the company's statement of financial position.