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3 years ago

Sheridan Company had the following transactions during the quarter end:

Business

1 answer:

White raven [17]3 years ago

8 0

Answer:

Payment of insurance premium include in last quarter = $204,000

Explanation:

Given:

Insurance premium during the year = $816,000

Number of quarter in the year = 4

Computation of payment include in last quarter:

Payment of insurance premium include in last quarter = Insurance premium during the year / Number of quarter in the year

Payment of insurance premium include in last quarter = $816,000 / 4

Payment of insurance premium include in last quarter = $204,000

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Suppose the rate of return on a 10-year T-bond is 4.05%, the expected average rate of inflation over the next 10 years is 2.0%,

Keith_Richards [23]

Answer:

1.15%.

Explanation:

This can be calculated as follows:

Yield be on a 10-year TIPS = Rate of return on the 10 year T-bond - Average Inflation - Market Risk Premium (MRP)

Therefore, we have:

Yield be on a 10-year TIPS = 4.05% - 2.0% - 0.9% = 1.15%

Therefore, the yield on a 10-year TIPS should be 1.15%.

6 0

4 years ago

You have just won the lottery and will receive $460,000 in one year. You will receive payments for 27 years, and the payments wi

Zepler [3.9K]

Answer:

The present Value of my winnings = $4,578,716.35

Explanation:

An annuity is a series od annual cash outflows or inflows which payable or receivable for a certain number of periods. If the annual cash flow is expected to increase by a certain percentage yearly, it is called a growing annuity.

To work out the the present value of a growing annuity,

we the formula:

PV = A/(r-g) × (1- (1+g/1+r)^n)

I will break out the formula into two parts to make the workings very clear to follow. So applying this formula, we can work out the present value of the growing annuity (winnings) as follows.

A/(r-g)

= 460,000/(12%-3%)

= $5,111,111.11

(1- (1+g/1+r)^n

1 - (1+3%)/(1+12%)^(27)

=0.8958

PV = A/(r-g) × (1- (1+g/1+r)^n)

$5,111,111.11 × $0.8958

= $4,578,716.35

The present Value of my winnings = $4,578,716.35

5 0

4 years ago

An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is

Andrej [43]

Here's the complete question:

An insurance company is analyzing the following three bonds, each with five years to maturity, and is using duration as its measure of interest rate risk:

a. $10,000 par value, coupon rate = 8%, rb = 0.10

b. $10,000 par value, coupon rate = 10%, rb = 0.10

c. $10,000 par value, coupon rate = 12%, rb = 0.10

What is the duration of each of the three bonds?

a. Duration on 8% coupon bond = 4.28 years

Year 1 ,2,3,4,5

CFs 800,800,800,800,10800

DCFs 727.27, 661.2, 601.05, 546.41 6705.95

PV=9241.84

Duration = <DCFs/PV

(7271+661.22+601.053+546.414+6705.95*5)/9241.84

=39568.1/9241.84

=4.2814

b. Duration on 10% coupon bond = 4.17 yearsc.

c. Duration on 12% coupon bond = 4.07 years

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3 years ago

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Is this a question or a statement?

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3 years ago

What is the price of money

OverLord2011 [107]

Answer:

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3 years ago

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