Answer:
$637,000
Explanation:
The computation of the total investment securities reported is shown below:
= ABC Co. bonds amortization cost for year 2015 + DEF Co fair value for year 2015 + GEH Inc fair value for the year 2015 + IJK Inc fair value for the year 2015 + LMN co stock fair value for the year 2015
= $367,500 + $48,000 + $47,000 + $44,000 + $130,500
= $637,000
We simply applied the above formula
Compounding is known as the act of leaving your money and other accumulated interest in an investment for more than one period.
<h3>How do you explain the word compounding?</h3>
Compounding is known to be the method used when an interest is credited to a specific existing principal amount and also to interest already paid.
It is the act of letting go of one's money and other compiled interest in an investment for a long time.
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If a fiscal policy change is going to exert a stabilizing impact on the economy, policy must add stimulus to demand during a slowdown but it should restraint the demand during an economic boom.
Fiscal policy is the policy in which the government spending and taxation is used to influence the economy.
Governments generally use fiscal policy to promote strong as well as sustainable growth in the economy and reduce the poverty too.
The role and objectives of fiscal policy which gained importance during the recent global economic crisis is when the different governments stepped in to support financial systems.
Governments starts the growth, and also mitigate the impact of the crisis on vulnerable groups through the use of fiscal policy.
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<span>If several years ago, the Jakob company sold a $1,000 par value bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually, then the after-tax cost of debt of the firm will be 4.65%.</span>
Answer:
Fixed cost in an organization does not change and is fixed while the variable cost keep changing if the production is increased.
Explanation:
Fixed cost are said to be that cost which does not change with production level for a certain limit. Let us suppose there is no change in the rent amount if we have only factory for the production of goods.
But the variable cost are those cost which increases as production increases. More will be the variable cost when the production will be more. Also for per unit basis, the variable cost remains the same.
Fixed cost are not important in decision making if there is an excess of capacity available.
For example,
Direct labor, direct material -- variable cost
Salary of supervisor, rent of factory -- fixed cost
Even though there is not much change in the variable cost, like for suppose material price increases, a company can still make a budget that is based on the past experience and predicting the market prices. Similarly, if there is a machine that uses three units of direct material for a piece if finished product, which is not going to change in the future. Thus the company can make a budget.
