Answer:
Face Value of the Bond = 40000
Effective Interest = 4%
Coupon rate = 4%
Years to Maturity = 4
Quarterly Coupon rate = 1%
No. of compounding periods = 16
Present Value of Face (40000*.85282) $34,112.85
Present Value of Interest Payments (800*14.7179) <u>$5,887.15</u>
Total $40,000.00
Face Value of Bond <u>$40,000.00</u>
Initial Amount of Discount/(Premium) <u>$0.00 </u>
Note: As the bonds are issued at par, there is premium or discount.
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Answer:
Profit for holiday month is $4,000
Explanation:
Given:
Average sales in a typical month = $1,600
Fixed cost is $800 per month
Sales in festive month is 300% above average typical month sale. So, sales in festive month is $4,800 (1,600 × 300%). Fixed cost remains same irrespective of number of units sold.
Profit = Sales - Fixed cost
= 4,800 - 800
= $4,000
If profit in a typical month is $800 (1,600 - 800), retail store earns profit of $4,000 in a festive month.
Answer:
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