1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
gavmur [86]
2 years ago
7

Leigh Delight Candy, Inc. is choosing between two bonds in which to invest their cash. One is being offered from Hershey's and w

ill mature in 10 years and pay $30 each quarter. The other alternative is a Mars' bond that will mature in 20 years and pay $30 each quarter. What would be the present value of each bond if the discount rate is 10% compounded quarterly, and each bond pays $1,000 at maturity?
Business
1 answer:
Firlakuza [10]2 years ago
5 0

Answer:

Hersey's bond = $1125.513

Mars bond = $1172.259

Explanation:

Hersey bond;

Period(t) = 10years = 40(quartely)

Coupon (C) = $30

Rate (r) = 0.1 = 0.025(quarterly)

Pay at maturity(p) = $1000

Using the both present value (PV) and compound interest formula ;

PV =[ C × (1 - (1+r)^-t) ÷ r] + [p ÷ (1 + r)^t]

PV = [30×(1-(1.025)^-40)÷0.025] + [1000÷(1.025)^40]

PV =( 753.083251562) + (372.4306236)

PV = $1125.513

Mars bond;

Period(t) = 20years = 80(quartely)

Coupon (C) = $30

Rate (r) = 0.1 = 0.025(quarterly)

Pay at maturity(p) = $1000

PV =[ C × (1 - (1+r)^-t) ÷ r] + [p ÷ (1 + r)^t]

PV = [30×(1-(1.025)^-80)÷0.025] + [1000÷(1.025)^80]

PV =(1033.55451663) + (138.704569467)

PV = $1172.259

You might be interested in
The demand for textbooks is Q = 200 – P + 25 U – 50 P beer. Assume that the unemployment rate U is 8 and the price of beer P bee
Readme [11.4K]

Answer: -0.5

Explanation:

Based on the information given, the price elasticity of demand will be calculated as follows:

= dQ/dP × P/Q

where,

dQ/dP = -1

P = 100

Q = 200 – P + 25 U – 50 P beer

Q = 200 - 100 + 25(8) - 50(2)

Q = 200 - 100 + 200 - 100

Q = 200

Therefore, dQ/dP × P/Q

= -1 × (100/200)

= -1 × 1/2

= -1 × 0.5

= -0.5

The price elasticity of demand is -0.5.

4 0
3 years ago
Why do many companies find that providing employees a comprehensive benefits package that includes insurance, retirement investm
mash [69]

Answer: Few employers believe that offering employee benefits is a worthwhile or cost-effective strategy for attracting and retaining the best employees

Explanation:

Several companies find that providing theye workers a comprehensive benefits package which consist ofinsurance, retirement investment and other benefits is worth the cost associated because it helps them retain and also attract their best staffs.

When employees are given the required support needed and given work related benefits, this is usually source of motivation to the employees and can help bring out the best in them.

8 0
2 years ago
Rudyard Corporation had 110,000 shares of common stock and 11,000 shares of 7%, $100 par convertible preferred stock outstanding
Burka [1]

Answer:

$2.73

Explanation:

<em>Diluted Earnings Per Share = Earnings Attributed to Common Stockholders ÷ Weighted Average Number of Common Stockholders Outstanding</em>

where,

Earnings Attributed to Common Stockholders = $420,000

and

Weighted Average Number of Common Stockholders Outstanding = 110,000 + (11,000 x 4) = 154,000

therefore,

Diluted Earnings Per Share = $420,000 ÷ 154,000 = $2.73

Conclusion

Rudyard's diluted EPS is $2.73

7 0
2 years ago
Which force in​ porter's competitive forces model would describe an organization that loses customers due to its product prices
Alexxandr [17]

I guess the correct answer is Substitute products and services

A substitutе is a prοduct that pеrfοrms thе samе οr similar functiοn as anοthеr prοduct. Micrοеcοnοmics tеachеs that thе mοrе substitutеs a prοduct has, thе dеmand fοr thе prοduct bеcοmеs mοrе еlastic. Еlastic dеmand mеans incrеasеd cοnsumеr pricе sеnsitivity which еquatеs tο lеss cеrtainty οf prοfits. Fοr еxamplе, public-transpοrtatiοn is a substitutе fοr driving a car, and е-mail is a substitutе fοr writing lеttеrs.

4 0
3 years ago
While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has
marysya [2.9K]

Answer:

(B). 50 cents

Explanation:

<u>Marginal cost</u><u> is the cost incurred by producing or purchasing one more unit of an item.</u>

If Jordan buys two tacos and a medium drink, it will cost him $2 and 50 cents or 250 cents (80 + 80 + 90).

However, if he opts for the value meal of three tacos and a medium drink, that costs $3 (300 cents), then he would be purchasing one additional taco at a marginal cost of 50 cent.

Marginal cost of additional unit of taco = 300 cents - 250 cents = 50 cents.

4 0
3 years ago
Other questions:
  • Before the year​ began, Butler Manufacturing estimated that manufacturing overhead for the year would be​ $176,400 and that​ 13,
    11·1 answer
  • Organizational culture refers to: a. the complex set of ideologies, symbols, and core values that are shared throughout the firm
    9·1 answer
  • Jon is the marketing head at Avion International, an import-export agency. His calendar is filled with: meetings with heads of t
    11·1 answer
  • Bulluck Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or Rate Direct m
    7·1 answer
  • Lohn Corporation is expected to pay the following dividends over the next four years: $18, $14, $13, and $7.50. Afterward, the c
    13·1 answer
  • Business application software programs make it possible to:
    13·1 answer
  • Jason Day Company had bonds outstanding with a maturity value of $300,000. On April 30, 2020, when these bonds had an unamortize
    12·1 answer
  • At Halsted Medical Products Corp., all assembly workers must wear specialized gear to prevent possible injuries from minute part
    5·1 answer
  • The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for
    10·1 answer
  • what are the intangible property that is protected by law which an enterpreneur should consider when starting up a business​
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!