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3 years ago

Officials argue that the government needs to reduce the national debt. Which actions are most likely to accomplish this goal?

1 answer:

5 0

If o<span>fficials argue that the government needs to reduce the national debt, I believe that the actions that are most likely to accomplish this goal are to increase taxation and decrease spending.
If they increase taxation, more money will come into the state fund, and if they decrease spending, more money will actually stay there.
</span>

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Up in Smoke Tobacco Shops' bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is th

lara [203]

Answer:

10%

Explanation:

Since the bond is selling at a discount, it means that the coupon rate is blow the market rate, so the actual rate must be higher. Since there is only one option with an interest rate above 9%, we must check to see if it works.

10% yearly interest rate = 5% semiannual interest rate

we must determine the PV of the 20 coupons paid and the face value at maturity.

to calculate the PV of the 20 coupons ($45 each) we can use an excel spreadsheet and the NPV function with a 5% discount rate: PV of the coupons = $560.80

the PV of the face value in 10 years = $1,000 / 1.05²⁰ = $376.89

the present value of the coupons and the bond at maturity = $560.80 + $376.89 = $937.69. The PV using a 5% semiannual rate is very similar to $937.75, and since the question asked us to round up to the nearest whole percent, we can assume it is correct.

6 0

3 years ago

What is 1/2 + 1/4=? Can someone help me (ps it's just a test to see if this app really works)

sergij07 [2.7K]

The answer is 3/4 and yes it really works

5 0

3 years ago

Which of the following is not possible when recording a transaction?A. Liabilities increase and assets decrease.B. Stockholders'

Basile [38]

Answer:

Liabilities increase and assets decrease.

Hope this helps!

3 0

3 years ago

You can buy a car that is advertised for $24,600 on the following terms: (a) pay $24,600 and receive a $4,600 rebate from the ma

Vadim26 [7]

Answer:

A. $20,000

B. $17,234.18

C.Option (b)

Explanation:

Obviously, the option with lower Present Value would be the best option to buy the car. The Present Value of the options can find out as following

REQUIREMENT A

Price of car = $24,600

Rebate = $4,600

Present value of the payments for option = Price of the car – rebate

Present value of the payments for option (a) = $24,600 - $4,600

Present value of the payments for option = $20,000

REQUIREMENT B

We can use the following Present Value of an Annuity formula to calculate the present value of the payments

PV of the payments for option = PMT * [1-(1+i) ^-n)]/i

PV of the payments for option (b) (PV) =?

Monthly payment PMT =$410 per month

Number of payments n = 5 years *12 months = 60

Monthly interest rate i=1.25% per month or 0.0125

PV of the payments for option = $410 x [1- (1+0.0125) ^-60]/0.0125

PV of the payments for option = $17,234.18

REQUIREMENT C.

Which is the better deal?

Option (b) is better deal as the present value of payments ($17,234.18) is less than Present value of the payments for option (a); $20,000.

3 0

3 years ago

The projected benefit obligation was $440 million at the beginning of the year. Service cost for the year was $48 million. At th

balu736 [363]

Answer: $47 million

Explanation:

Pension expense arises as a result of the amounts owed to employees in relation to pension liabilities.

It is calculated by;

= Service Cost + Interest expense - Expected return on plan assets + Amortization of prior service cost + Amortization of net loss

= 48 + ( 440 * 5%) - 23

= $47 million

7 0

3 years ago