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artcher [175]
3 years ago
6

g Your grandfather purchased a $1,000 face-value bond 10 years ago. When he purchased the bond, it had 30 years to maturity and

a coupon rate of 5% paid annually. Now you want to sell the bond and read that the yield on similar bonds is 4.93%. What can you sell the bond for today
Business
1 answer:
natulia [17]3 years ago
3 0

Answer:

You can sell the bond for $1,008.78 today

Explanation:

We need to calculate current value of the bond & its coupon

Face value: $1,000

Left tenor: 20 years (= 30 years to maturity - 10 years ago)

Coupon rate: 5%

Yield to maturity: 4.93%

Total coupon to be paid every year= $1,000* 5%  = $50

To calculate the current value of coupon received in every of 20 years, we use formula PV in excel or manually as below:

PV = 50/(1+4.93%)^20 + 50/(1+4.93%)^19+.... +50/(1+4.93%)^1 = $626.83

The current value of face value after 20 years = $1,000/(1+4.93%)^20 = $381.95

So the value of bond = $626.83 + $381.95 = $1,008.78

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lisov135 [29]

Why am I sending this message?

What do I hope to achieve by sending this message?

Explanation:

First and foremost, to define the intent to which the letter is sent prior to writing the business message.

Good writing allows the author to carefully think about the intent of writing, to prepare what he can say, to plan how he can communicate and to consider what the reader needs to know. It also involves reviewing and revising strategies and documents to enhance them.

Editing is an examination of a text to correct any errors. These errors could be as simple as orthography or grammar errors, or as complicated as your written flow and clarity. Many authors find the editing checklist useful when their own work is corrected.

7 0
3 years ago
Emma is planning how much she needs to make next week. She can only work 25 hours, and she needs to make a total
Mademuasel [1]

Answer:

$24.8 per hour.

Explanation:

Emma can only work for 25 hours in a week.

Total she needs to make =$620.

So, each hour she has to make sales worth =620/25 =$24.8

3 0
3 years ago
Read 2 more answers
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $87 million on January 1, 2021. The bonds mature o
kakasveta [241]

Answer:

1. $77,783,220

2. Jan-21

Dr Cash $ $77,783,220

Dr Discount On Bond $9,216,780

Cr Bond Payable $ $87,000,000

Explanation:

1. Calculation to Determine the price of the bonds at January 1, 2021.

First step is to calculate the Present Value Of Annual Interest

a Semi-annual Interest Amount $5,220,000

($87,000,000*12%/2)

b PV Annuity Factor for (20 Years,14%/2=7%) 10.5940

c Present Value Of Annual Interest (a*b) $ $55,300,680

($5,220,000*10.5940)

Second step is to calculate Present Value Of Redemption Amount

a Redemption Value $ $87,000,000

b PV Factor Of (20 Years,7%) 0.25842

c Present Value Of Redemption Amount (a*b) $ $22,482,540

($87,000,000*0.25842 )

Now let Determine the price of the bonds at January 1, 2021.

Intrinsic Value ( Price ) Of The Bond = ($55,300,680+$22,482,540)

Intrinsic Value ( Price ) Of The Bond =$77,783,220

Therefore the price of the bonds at January 1, 2021 is $77,783,220

2. Preparation of the journal entries to record their issuance by The Bradford Company on January 1, 2021,

Jan-21

Dr Cash $ $77,783,220

Dr Discount On Bond $9,216,780

($87,000,000-$77,783,220)

Cr Bond Payable $ $87,000,000

(Being to record issuance of bond)

3. Preparation of the journal entries to record their issuance by The Bradford Company on ion June 30, 2021

Jun-30

Dr Interest expenses $ 53,82,240

Discount On Bond payable $ 2,22,240

Cash $5,220,000

4.Preparation of the journal entries to record their issuance by The Bradford Company on

December 31, 2021

Dec-31 Interest expenses $ 53,97,797

Discount On Bond payable $ 2,37,797

Cash $5,220,000

( to record interest payment)

6 0
3 years ago
Assume Maine Line Railway is considering hiring a reservations agency to handle passenger reservations. The agency would charge
inna [77]

Answer:

$214,000

Explanation:

The total reservation cost per month is given by the following expression:

R = \$14,000+\$1*n

Where 'n' is the number of monthly reservations.

If there are 200,000 reservations for passengers taking a trip next month, the reservation cost is:

R = \$14,000+\$1*200,000\\R=\$214,000

Total reservation cost is $214,000.

7 0
3 years ago
Read 2 more answers
John Williams, manager of Phoenix Entertainment, wants to compute the variable overhead efficiency variance for the year. He has
jenyasd209 [6]

Answer:

$10,125 Favorable

Actual quantity of the cost-allocation base used - Actual quantity of the cost-allocation base that should have been used to produce the actual output) × Budgeted variable overhead cost per unit of the cost-allocation base

Explanation:

Variable overhead spending variance = Actual Spending - budgeted Spending based on actual quantity

Variable overhead spending variance = (Actual Input x Actual rate) - ( Actual input x Budgeted rate)

Variable overhead spending variance = (10,125 x $29) - ( 10,125 x $30)

Variable overhead spending variance = $293,625 - $303,750

Variable overhead spending variance = $10,125 Favorable

Variable overhead spending variance is

Actual quantity of the cost-allocation base used - Actual quantity of the cost-allocation base that should have been used to produce the actual output) × Budgeted variable overhead cost per unit of the cost-allocation base

4 0
3 years ago
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