Which of the following is true of manufacturing?

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

3 years ago

A bridge design firm is performing an economic analysis of two mutually exclusive designs for a highway overpass. The steel gird

Anettt [7]

Answer:

Please find attached solution

Explanation:

8 0

3 years ago

Which of the following is NOT considered a trend in marketing?

den301095 [7]

Answer:

C

Explanation:

Because that would not make any sense of "distributive marketing

3 0

3 years ago

Transmissions are delivered to the fabrication line five at a time. It takes two hours for transmissions to be delivered. Approx

Leokris [45]

Answer:

The Number of kanban card sets is 2.

Explanation:

c = 5

T = 2 hours

d = 3 vehicles/hour

N = d*T(1 + ss)/C

= 3*2(1 + 0.30)/5

= 1.56

Therefore, The Number of kanban card sets is 2.

5 0

3 years ago

Explain the marketing concept

Orlov [11]

Answer:

Marketing is the process of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques and utilizing the appropriate people to provide the customer service associated with those goods, services, or ideas. This concept is referred to as the “right” principle and is the basis of all marketing strategy. We can say that marketing is finding out the needs and wants of potential buyers (whether organizations or consumers) and then providing goods and services that meet or exceed the expectations of those buyers. Marketing is about creating exchanges. An exchange takes place when two parties give something of value to each other to satisfy their respective needs or wants. In a typical exchange, a consumer trades money for a good or service. In some exchanges, nonmonetary things are exchanged, such as when a person who volunteers for the company charity receives a T-shirt in exchange for time spent. One common misconception is that some people see no difference between marketing and sales. They are two different things that are both part of a company’s strategy. Sales incorporates actually selling the company’s products or service to its customers, while marketing is the process of communicating the value of a product or service to customers so that the product or service sells.

7 0

3 years ago