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beks73 [17]
3 years ago
7

If the required rate of return on a bond (rd) is greater than its coupon interest rate and will remain above that rate, then the

market value of the bond will always be below its par value until the bond matures, at which time its market value will equal its par value. (Accrued interest between interest payment dates should not be considered when answering this question.)
a. True
b. False
Business
1 answer:
Blizzard [7]3 years ago
6 0

Answer:

a. True

Explanation:

Answer this question using YTM, coupon rate, price and par value relationship/rules.

If YTM > coupon rate, then Price < Par value

If YTM < coupon rate, then Price > Par value

If YTM = coupon rate, then Price = Par value

In this case, the assumption is that YTM > coupon rate, hence based on the above rules, the Price or market value of the bond will be < Par value. This makes the statement true.

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Presented below is information related to Splish Company at December 31, 2020, the end of its first year of operations.
elena-s [515]

Answer:

a. $131,880

b. $167,310

c. $156,050

d. $151,390

Explanation:

(a) Income from operations

Income from Operations is Income resulting from Primary Trading Activities of the Company.

Income from Operations = Gross Profit + Operating Income - Operating Expenses

where,

Gross Profit = Sales - Cost of Goods Sold

                    = $334,910 - $149,030

                    = $185,880

thus,

Income from Operations = $185,880 - $54,000 = $131,880

(b) Net income

Income resulting from Primary and Secondary Trading Activities of the the Company.

Net income = Income from Operations + Non Operating Income - Non Operating Expenses

                   = $131,880 + $32,710 + $9,080 - $6,360

                   = $167,310

(c) Comprehensive income

Income from both Continuing and Non - Continuing Activities.

Comprehensive income = Net income + Non - Continuing Activities

                                         = $167,310 - $11,260

                                         = $156,050

(d) Retained earnings balance at December 31, 2020

The Income remaining after distributions to shareholders have been made.

Retained earnings = Comprehensive income  - Dividends

                               = $156,050 - $4,660

                               = $151,390

8 0
3 years ago
ABC Company insured its building on a replacement cost basis for $700,000 under a property insurance policy that included an 80%
Rama09 [41]

Answer:

$35,000

Explanation:

Given that

Insurance = $700,000

Sustained cost = $40,000

Replacement cost = $1,000,000

Policy = 80%

The computation of amount eligible for payment is as shown below:-

Insurance required = Cost of building × Co insurance

=$1,000,000 × 0.80

= $800,000

The amount eligible for payment = (Insurance Carried ÷ Insurance Required) × Loss

= $700,000 ÷ ($1,000,000 × 80%) × ($40,000)

= $700,000 ÷ $800,000 × $40,000

= 0.875 × $35,000

= $35,000

3 0
3 years ago
For each error below, indicate:
patriot [66]

Answer:

1. Inventory account will be affected and assertions of accuracy and valuation will be violated.

2. Assets are overstated and assertion classification is violated.

3. Liability is understated and assertions of accuracy is violated.

4. No impact.

Explanation:

Assertions are certain claims of a business which a business must fulfill in order to make its financial statements reliable. A company has to record the expense when it is incurred in order to provide accuracy in valuation. In the given cases the assertions are violated which impact business accounts.

8 0
3 years ago
Many cities in southeast Michigan are struggling with financial problems due to current economic conditions. At the same time, s
asambeis [7]
The best and most correct answer among the choices provided by the question is the third choice. The direct result of the problems is that <span>less city workers to plow the streets causing an increase in the number of car accidents during the winter months. </span>I hope my answer has come to your help. God bless and have a nice day ahead!
3 0
3 years ago
Alex wilson and james lawrence are discussing the high price of crude oil in the global market.​ alex, a sociology professor who
algol [13]

Answer:

Developing countries are using less oil because of substantial investments in renewable energy.

Explanation:

Solution

From the given question, the statement that would weaken James argument is that, countries that are developing are using fewer oil because of substantial investments in renewable energy.

This shows that the demand is actually higher no matter if its in growing or developing  country or a developed country and since his statement says that prices depend upon the demand, it actually supports it whereas the statement B is the only statement which is totally contradicting James statement as it doesn't talk about demand in developed country and also says that developing ones are demanding little of it.

Complete question : Alex Wilson and James Lawrence are discussing the high price of crude oil in the global market. Alex, a sociology professor who follows the financial markets closely, claims that the volume of trade in oil futures has increased indicating that speculators are responsible for the high oil prices. James, who works at an investment bank, thinks that the increase in oil prices is demand-driven. According to him, the higher price of oil reflects growing demand from developing countries.  

Which of the following, if true, would weaken James' argument?

A. A private oil drilling firm has recently discovered vast oil deposits off the coast of a remote island country.

B. Developing countries are using less oil because of substantial investments in renewable energy.

C. Per capital consumption of oil was higher in the developed countries than in the developing countries during the last year.

D. An increase in oil prices tends to accelerate inflation in growing economies.

E. Following a large oil spill, some countries have introduced new regulations for offshore oil drilling.  

4 0
3 years ago
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