Answer:
Value of the bond = $862.013
Explanation:
The value of the bond is the present value of the future cash receipts expected from the bond. The value is equal to present values of interest payment and the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of the bond can be worked out as follows:
Step 1
<em>Calculate the PV of Interest payment
</em>
Present value of the interest payment
PV = Interest payment × (1- (1+r)^(-n))/r
Interest payment = $40
PV = 40 × (1 - (1.05)^(-12×2)/0.05)
= 40 × 13.7986
= 551.945
Step 2
<em>PV of redemption Value
</em>
PV of RV = RV × (1+r)^(-n)
= 1000 × (1.05)^(-12×2)
= 310.067
Step 3
<em>Calculate Value of the bond </em>
= 551.94567 + 310.067
=862.01
Value of the bond = $862.013
Answer: a. $4.5 million
Explanation:
The depreciation to be recognized is;
= Value of Depreciable assets * Percent of company owned
= 15,000,000 * 30%
= $4,500,000
Answer:
Option (a) is correct.
Explanation:
France can produce four phones or three computers:
Opportunity cost of producing one phone = (3 ÷ 4)
= 0.75 computers
Opportunity cost of producing one computer = (4 ÷ 3)
= 1.33 phones
Sweden can produce one phone or two computers:
Opportunity cost of producing one phone = (2 ÷ 1)
= 2 computers
Opportunity cost of producing one computer = (1 ÷ 2)
= 0.5 phones
Therefore,
France has a comparative advantage in producing phones because of the lower opportunity cost of producing it than Sweden. France should specialize in producing phones and import computers from Sweden.
Sweden has a comparative advantage in producing computers because of the lower opportunity cost of producing it than France. Sweden should specialize in producing computers and import phones from France.
Answer:
D. debit Unearned Rent Revenue, $4720; credit Rent Revenue, $4720.
Explanation:
When the Cash was received for 6 month`s Rent the entry was :
Debit : Cash $28320
Credit : Unearned Rent Revenue $28320
At 31 July when 1 month`s rent expires the entry will be :
Debit : Unearned Rent Revenue (1/6 x $28,320) $4,720
Credit : Rent Revenue $4,720
thus
We reverse the liability - Unearned Rent Revenue and recognize Revenue for the month expired.
Answer:
$50
Explanation:
Net income will be the difference between the selling price and the Cost price.
Cost price is $1000
net profit margin is 5%, selling price will be
=$1000 + profit margin
= $1000 + (5/100 x 1000)
=$1000 + $50
=$1050
Net income = $1050 -$50
=$50
