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ludmilkaskok [199]
3 years ago
6

Longley Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to pay an 8% coupon rate, because tha

t was the interest rate while it was being planned. However, rates increased suddenly and are expected to be 9% when the bond is marketed. What will Longly receive for each bond tomorrow
Business
1 answer:
Katen [24]3 years ago
7 0

Answer:

Longly will receive $1,817.43 from selling the bond.

Explanation:

As the coupon rate is 8%; we have annual coupon payment = 2,000 x 8% = $160.

The price of the bond Longly will receive is equal to the present value of 20 annual coupon payment plus the present value of $2,000 face value repayment in 20 years time; with the two streams of cash flow discounting at the market rate at the date of issuing 9%; which is calculated as:

[ ( 160/9%) x [ 1 - 1.09^(-20) ] ] + ( 2,000 / 1.09^20 ) = $1,817.43.

So, the answer is $1,817.43.

You might be interested in
Streep Factory provides a 2-year warranty with one of its products which was first sold in 2017. Streep sold $1,000,000 of produ
Brut [27]

Answer:

accounts receivable   1,000,000 debit

   sales revenues                       1,000,000 credit

------------------------------

warrant  expense    125,000 debit

        warrant liability              125,000 credit

-----------------------------

warranty liability       70,000 debit

             Inventory                       70,000 credit

Explanation:

The sales will be recorded as usual

Then we will recognize based on the company's expectation a warrant liability for 125,000 and a warrant expense for the same value

When the customer claims the warrant we will decrease the liaibility and also inventory as we are replacing the good so it is inventory account which decreases.

The reason why we do this treatment is to avoid charging expenses for the 2017 sales i nthe subsequent period (2019 and 2019) which vilates the matching principles.

4 0
3 years ago
A weaker dollar benefits ---------- and hurts-----------
m_a_m_a [10]

Answer:

A weaker dollar benefits EXPORTERS and hurts IMPORTERS.

Explanation:

A weaker dollar means that the dollar depreciated against foreign currencies, meaning that you need more dollars to purchase foreign currencies. This results in higher prices for imported goods. On the other hand, a weaker dollar helps exporters because it lowers the price of US products sold to foreign countries. As exports grow and imports decrease, the dollar starts to appreciate again.

8 0
3 years ago
2. Roth retirement funds require you to pay taxes on your investment dollars up-front, while
leonid [27]

Answer:

The Pros and Cons of Roth IRA and the Traditional IRA or 401(K):

Roth IRA is not advantageous to those, who are starting to save late in their career.  It favors the younger worker, who is starting out with low-paying jobs at lower-paying tax rates, who will later be earning more.

With Roth IRA, you suffer the tax burden upfront when you are active and while making your contributions, so that you can enjoy your retirement benefits tax-free.  This is why the younger worker benefits more.  In the prime of life with little responsibilities, you can settle the taxman so that you can be free of him later in older age.  But, if you are in the high tax bracket, this category is not funny for you, anyway.  The IRS has an income limit for this category, therefore, you must go for the traditional IRA.

The traditional IRA saves you the tax burden initially, but you can never be free of the IRS.  It must take its share later, having allowed you to enjoy tax-free contributions.  When the net is filled, the IRS cuts its percentage off.

You will never feel bad then, because your tax rate will surely be reduced in comparison with when you are making the contributions.  So, it is just and right to allow the IRS, who generously helped you to grow the nest in the first place to take its just and lawful cut.  It does not bleed too much then, afterall you are drying up with life's responsibilities, including reduced tax bracket, and many of your children have started answering to the IRS independently.  This is the better time to deal with IRS, anyway.

Explanation:

The question has the explanation:  ROTH IRAs are retirement funds that allow you to pay taxes on your investments into retirement funds as you are making the contributions, so that you are free to make your withdrawals after at least 5 years without paying additional taxes.

The traditional IRAs or the 401(K) encourage you to make your retirement contributions without paying taxes on them so that you can contribute more.  Then the IRS will bounce on you to pay the taxes when you are making withdrawals having grown the investments.

IRAs mean Individual Retirement Accounts which individuals use to save and accumulate their retirement funds.

5 0
2 years ago
1. Almost half the jobs in this country come from small businesses.<br> True<br> False
Dmitrij [34]

Answer:

True

Explanation:

Small businesses make up:

99.7 percent of U.S. employer firms,

64 percent of net new private-sector

jobs,

49.2 percent of private-sector

employment,

42.9 percent of private-sector payroll,

46 percent of private-sector output,

43 percent of high-tech employment,

98 percent of firms exporting goods,

and

33 percent of exporting value.

3 0
3 years ago
Bramble, Inc. buys 1,000 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot i
svet-max [94.6K]

Answer:

determine the cost per CD for each group using tsv method

4 0
3 years ago
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