- When deciding how to use resources, you need to evaluate the costs and benefits of each

Pension funds pay lifetime annuities to recipients. If a firm will remain in business indefinitely, the pension obligation will

Solnce55 [7]

Answer:

Duration of liability (perpetual) = (1 + y) / y

= (1 + 17.5%) / 17.5%

= 6.71

Value of liability = Cash Flow / yield

= $3.5 million / 17.5%

= $20 million

a. Assume you invest w in 5-year bond and 1-w in 25-year bond such that the duration of the portfolio is 6.71

6.71 = w x 4 + (1 - w) x 16

w = (16 - 6.71) / (16 - 4)

w = 77% in 5-year bond

1 - w = 28% in 25 year bond

Market Value of 5 year bond = 77% * $20 million = $15.4 million

Market Value of 20 year bond = 23% * $20 million = $4.6 million

b. Market Price of 20 year bond can be calculated using PV function on a calculator

N = 25, I/Y = 17.5%, PMT = 9, FV = 100

Price = Present Value (25,17.5%, 9 ,100)

Price = 52.29042644

Price = $52.30

Par Value of 25 year bond = Market Value /% Price

Par Value of 25 year bond = $4.6 million / 50.83%

Par Value of 25 year bond = $9,049,774

6 0

2 years ago

XYZ Equipment, a firm that produces manufacturing equipment for various industries, experiences an influx of new sales employees

Ket [755]

Answer:

As part of the process, the HR department's first step should be to identify which sales representatives need technical training. In the instructional design process, the first and perhaps the most important step is to analyze the requirements. In this case, XYZ equipment firm is facing an issue of poor employees performance after an influx of new sales employees. To solve the issue, HR department has implemented a training program, so the first step of the process would be to identify the sales employees who are in need of technical training and are performing poorly. Because not all sales employees would require the technical training only those who are performing poorly.

6 0

3 years ago

Demand-pull inflation is caused by: An increase in aggregate supply. An increase in resource costs as an economy's production ca

frosja888 [35]

Answer:

Excessive aggregate demand in relation to an economy's production capacity.

Explanation:

The demand and the pull is the upward movement in the prices that follows a shortage in supply. As per the economists, they describe it as the too many dollars that are followed by too few goods.

Thus when the combined demand in the economy strongly is outweighed by the combined supply and thus the prices tend to go up. Hence the excessive increase of the demands pulls up the production capacity.

5 0

3 years ago

Novak Corp. reported net income of $1.20 million in 2022. Depreciation for the year was $192,000, accounts receivable decreased

Kay [80]

Answer:

$1,476,000

Explanation:

According to the scenario, computation of the given data are as follows:-

Statement of The Cash Flow 31 December,2022

Particular Amount Total Amount

Net Income $1,200,000

Depreciation $192,000

Accounts receivable Decrease $420,000

Accounts payable Decrease ($336,000)

$276,000

Net cash provided by operating activities $1,476,000

6 0

3 years ago

All states withhold state income taxes. true false

weeeeeb [17]

False is the answer.

3 0

3 years ago