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aleksley [76]
2 years ago
6

McCurdy Co.'s Class Q bonds have a 12-year maturity, $1,000 par value, and a 5.75% coupon paid semiannually (2.875% each 6 month

s), and those bonds sell at their par value. McCurdy's Class P bonds have the same risk, maturity, and par value, but the P bonds pay a 5.75% annual coupon. Neither bond is callable. At what price should the annual payment bond sell
Business
1 answer:
dem82 [27]2 years ago
6 0

Answer:

$993.08

Explanation:

the market interest is 2.875% semiannual, that is why Q bonds are sold at par. To determine the value of P bonds we must add the present value of the face value and the coupon payments:

the effective interest rate = (1 + 5.75%/2)² - 1 = 5.83%

PV of face value = $1,000 / (1 + 5.83%)¹² = $1,000 / 1.974405523 = $506.48

PV of coupon payments = $57.50 x 8.46254 (PV annuity factor, 5.83%, 112 periods) = $486.60

market price = $993.08

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The ultimate goal of the capital budgeting process is to​ ________. A. list the projects and investments that a company plans to
Tanzania [10]

Answer:

The correct option which represents the ultimate goal of capital budgeting is D) .

Explanation:

Capital budgeting is a kind of planning process which an organization undertakes to see if the investments or projects ( usually long term ) they are considering to invest in are worth funding . This process actually begins with the compiling a list of potential future projects. The ultimate goal of this process is to estimate what would be the effect on organizations cash flow , if a project is accepted or rejected.

8 0
3 years ago
The purchase agreement should not disclose all of the conditions and terms of the sale.
Makovka662 [10]
It should disclose all the terms and conditions, otherwise the purchase agreement wouldn't be binding.
5 0
2 years ago
Institute Technologies is choosing new cost drivers for its accounting system. One driver is labor hours, the other is a combina
Eddi Din [679]

Answer:

d) $2,000,000 $990,000

Explanation:

The computation is shown below:

Unit variable cost pool is

= Budgeted cost ÷ Budgeted machine hours

= $1,600,000 ÷ 360,000

=$ 4.444 per machine hour

And,

Batch-level cost pool = Budgeted cost ÷ Budgeted number of setups

= $900,000 ÷ 3000

= $ 300 per setup

Now

Unit variable cost pool is

= Actual machine hours × Activity rate

= 450000 × 4.44

= $2,000,000

And, Batch-level cost pool is

= Actual number of setups × Activity rate

= 3300 × 300

=$990,000

3 0
3 years ago
At what debt to income ratio might a Marine be considered overextended
natta225 [31]

Answer:

21% to 30%

Explanation:

The debt to income ratio indicates the percentage of the earnings that are being used to pay the debts every month. The guidelines for Marines state that when the ratio is less than 15% they have to be careful when taking a loan and when it is from 16% to 20% they should avoid taking more debt. Also, from 21% to 30%, they are overextended and shouldn't take more debt and more than 30% indicates that they have to get help to decrease the debt.

According to this, a Marine might be considered overextended when the debt to income ratio is between 21% to 30%.

6 0
3 years ago
The controller ▼ is is not correct in his justification with respect to classifying costs as product or period​ costs; this dete
jolli1 [7]

Answer:

Explanation:

Under GAAP, every cost incurred should be classified into either  period cost or product cost, where:

Product Cost:

The cost business has incurred right now, but will benefit from it in future for e.g. raw materials used to manufacture something which will be sold in next period (by the way period means the time span for which business is reporting its performance like year or quarter). these generally include direct labor, materials and manufacturing over heads

these costs should be capitalized and expensed out in future as the inventory is used.

Period Cost:

all other costs from which business has benefited completely in current period, including admin sales and distribution related costs

these should be expensed out in current period.

for warehousing costs, if they pertain to raw materials and semi finished goods they will be capitalized but if they pertains to finished goods they will be expensed out (as there is no benefit expected from them in future now)

for research and development, every research cost should be expensed out for e.g. feasibility studies under GAAP, but if product found to be commercially viable then the development costs can be capitalized as intangible asset(with the same logic as these will be exactly like manufacturing costs for tangible products).          

4 0
2 years ago
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