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4 years ago

Consider the case of the following annuities, and the need to compute either their expected rate of return or duration.

Business

1 answer:

anastassius [24]4 years ago

6 0

Answer:

1. 5.00%

2. 15.70 year

Explanation:

As per the data given in the question,

1) For computing the interest rate we need to applied the RATE formula which is shown in the attached spreadsheet

Given that

Future value = 0

Present value = -$2587.09

PMT = $950

NPER = 3 years

The formula is shown below:

= RATE(NPER;PMT;-PV;FV)

The present value comes in negative

After applying the above formula, the interest rate is 5%

2) For computing the number of years we need to use NPER i.e to be shown in the attachment below

Given that

Future Value = $920,925

Present Value = 0

PMT = -$40,000

Interest rate = 5%

The formula is shown below

= NPER(RATE;-PMT;PV;FV)

The PMT comes in negative

After applying the above formula, the nper is 15.70 years

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Crossfade Corp. has a bond with a par value of $2,000 that sells for $1,902.14. The bond has a coupon rate of 6.48 percent and m

Virty [35]

Answer:

yield to maturity = 7.06%

Explanation:

yield to maturity (YTM) is calculated using the following formula:

YTM = {C + [(FV - PV) / n]} / [(FV + PV) / 2]

FV = $2,000
PV = $1,902.14
C = $2,000 x 6.48% x 1/2 = $64.80
n = 12 x 2 = 24

YTM = {64.80 + [(2,000 - 1,902.14) / 24]} / [(2,000 + 1,902.14) / 2] = (64.80 + 4.0775) / 1,951.07 = 0.0353 or 3.53% semianually or 7.06% annually

Since the bond sells at a discount, its yield to maturity will be higher than the coupon rate.

8 0

3 years ago

Elite Stationary employs 20 full-time employees and 10 trainees. Direct and indirect costs are applied on a professional labor

kolezko [41]

Answer:

Since cost per hour of full-time employees is $150, while cost per hour of trainees $27, clients using proportionately more full-time employees than trainees will <u>be under billed or charged for the resources or labor hour used</u>.

Explanation:

The data in the question are merged and they are first separated before answering the question as follows:

Details Budget Actual

Indirect costs $250,000 $400,000

Annual salary of each employee $200,000 $250,000

Annual salary of each trainee $40,000 $45,000

Total professional labor-hours 40,000 dlh 50,000 dlh

In normal costing system, actual costs are used.

Therefore, labor hours for each category and cost per hour can be calculated as follows:

Full-time employees total labor hours = (20/30) * 50,000 = 33,333 hours

Each full-time employee annual labor hour = 33,333/20 = 1,667 hours

Cost per hour of full-time employees = $250,000/1,667 = $150 per hour

Trainee total labor hours = (10/30) * 50,000 = 16,667 hours

Each trainee annual labor hours = 16,667/10 = 1,667 hours

Cost per hour of trainees = $45,000/1,667 = $27 per hour

5 0

3 years ago

f a business has fixed costs of $1k a month, variable costs of $1k a month and has product sales of $2k a month, what statement

PSYCHO15rus [73]

Answer:

The correct option is b. The business is realizing $0 profit and the business is at break-even point.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

If a business has fixed costs of $1k a month, variable costs of $1k a month and has product sales of $2k a month, what statement is a correct analysis of the situation?

a. The business is realizing $2k profit and the business is at break-even point

b. The business is realizing $0 profit and the business is at break-even point

c. The business is realizing $2k loss and the business is at break-even point

d. The business is realizing $2k profit

The explanation of the answer is now provided as follows:

Total cost = Fixed cost + Variable cost = $1K + $1K = $2k

Total revenue = Product sales = $2k

Profit = Total revenue - Total cost = $2k - $2k = $0

When a business makes $0 profit, it implies that the business is at break-even point.

Therefore, the correct option is b. The business is realizing $0 profit and the business is at break-even point.

6 0

3 years ago

Which of the following acquisitions would be considered the LEAST related? Group of answer choices A candy manufacturer purchase

kari74 [83]

Answer:

An upscale "white-tablecloth" restaurant chain acquires a travel agency.

Explanation:

Few reasons:

Such restaurant are luxurious, so they would want to collaborate with travel agencies but not acquire the whole agency itself.
Being the upscale restaurant they have to work on their own image not acquiring unnecessary agencies.
They have their own customer market, who won't compromise on the choices they make, so they don't need to acquire a travel agency to increase it's branding as not everyone can afford such restaurants.

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3 years ago

As an eighth grader, Marliss wins an art competition, and her prize is one thousand dollars. She wants to invest the money for h

valkas [14]

The best option to invest money for her college fund would be to buy a savings bond. The correct answer is A.

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3 years ago