Answer:
C.eight-year bond with 5.5% annual interest rate
Explanation:
The computation of the total options under each option is as follows:
As we assume the par value be $1,000
For Option A
Total interest
= 9.5% × $1,000 × 3 years
= $285
For Option B
Total interest is
= 7.25% × $1,000 × 4 years
= $290
For Option C
Total interest is
= 5.5% × $1,000 × 8 years
= $440
For Option D
Total interest is
= 6% × $1,000 × 6 years
= $360
As we can see that the option C contains high value of the total interest. So the same is to be selected
Answer:
The company WACC is 13.30%
Explanation:
For computing the WACC, first we have to find the weight-age of both debt and equity.
Since in the question, the weightage of debt and equity is given which is equals to
Debt = 30%
And, Equity or common stock = 70%
So, we can easily compute the WACC. The formula is shown below
= Weighted of debt × cost of debt × (1- tax rate) + Weighted of equity × cost of equity
= 0.30 × 0.10 × (1 - 0.30) + 0.70 × 0.16
= 0.021 + 0.112
= 13.30%
Hence, the company WACC is 13.30%
Answer:
Yield to maturity is 3.94%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Coupon payment = $1,000 x 9% = $90/2 = $45 semiannually
Selling price = P = $1080
Number of payment = n = 10 years x 2 = 20
Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
Yield to maturity = [ $45 + ( 1000 - 1080 ) / 20 ] / [ (1,000 + 1080 ) / 2 ]
Yield to maturity = [ $45 - 4 ] / 1040 = $41 /1040 = 0.394 = 3.94%
Answer:
The correct answer is letter "A": lawn fertilizer manufacturer.
Explanation:
Process costing is a type of costing approach used by companies to identify expenses for individual units produced. This method is useful for manufacturers in charge of mass production where all the units are almost the same or equal. Thus, <em>a lawn manufacturer could use the process costing system</em> because the equipment produced in that industry are almost equal and tend to be manufactured in large quantities.
Answer:
Julie’s can deduct $2,000 in 2020
Explanation:
In 2020 rents for only two months November 2020 and December 2020 are accrued
First calculate the monthly rent
Monthly rent = Rent paid / Month for which rent paid = $24,000 / 24 months = $1,000 per months
Now calculate the rent deduction to be made by Julie in 2020
Rent deduction 2020 = Numbers of months accrued in 2020 x Monthly rent = 2 months x $1,000 per month = $2,000
