Answer:
a. $21,800
Explanation:
The discoun of issuance of the bond is amortized over the period until maturity. Total Interest expesne on a discounted bond is the sum of the coupon payment and the amortization of the discount amount.
Coupon payment = $200,000 x 10% = $20,000 per year
Discount on the bond = $200,000 - $191,000 = $9,000
Discount amotized per year = $9,000 / 5 = $1,800
Total Interest Expense = Coupon Payment + Amortization of Discount
Total Interest Expense = 20,000 + 1800 = $21,800
Answer: Net Pension liability of $29 million
Explanation:
A net pension liability will be reported when the obligations of the employer which is the Projected benefit obligation, exceeds the Plan assets because the company has less resources than required to satisfy its obligations.
A net pension asset will be when the Projected Benefit Obligation (PBO) is less than the Plan assets.
In this case, there will be a Net pension liability of;
= PBO - Plan assets
= 75 - 46
= $29 million
No, because Jane will win in a small claims court because it is not done in a federal court which is needed for this situation
Answer:
I would buy the APPLE stock
Explanation:
Microsoft stock price = $173
dividends earned = $4, $5 and $5.5
value after 3 years = $190
Apple stock price = $285
Dividends earned = $5.5, $8.5 and $10.5
value after 3 years = $330
Applying the dividend discount model
IVO = present value of dividend + present value of terminal price
for Microsoft
IVO = ( 4/1.1 + (5/(1.1/2)) + ( 5.5/(1.1/3)) + ( 190/(1.1/3))
= $154.65
for Apple
IVO = ( 5.5/1.1 + ( 8.5/( 1.1/2)) + (10.5/(1.1/3)) + ( 330/(1.1/3))
= $267.8
Note: the IVO's are less than the current price of the stocks ( IVO = the intrinsic value of the shares ) but Microsoft shares are overpriced compared to apple
Safety and liquidity. Liquidity means the ability to use it at a moments notice and if saved that is possible whereas if invested that may not always be the case. If invested you won’t be able to use the funds immediately or at least you aren’t guaranteed that you can without a delay. The other imp reason is safety. If you save your money it is safe and retains its value but if invested it’s value can fluctuate which you tolerate and expect in the hopes that over time it will earn you more money.
