Answer:
7.52%
Explanation:
First and foremost ,the yield to maturity on the old issue is computed using the rate formula in excel as calculated below:
=rate(nper,pmt,-pv,fv)
the nper is the number of times the bond would pay annual coupon interest of $106,which is 20 times
pmt is the amount of annual coupon payment which is $106
pv is the current price of the bond at $860
fv is the face value of the bond at $1000
=rate(20,106,-860,1000)=12.54%
The yield to maturity on the new issue is 12.54% as well
after-tax cost of debt=pretax cost of debt*(1-t)
pretax cost of debt is yield to maturity of 12.54%
t is the tax rate of 40% or 0.4
after-tax cost of debt=12.54%
*(1-0.4)=7.52%
Answer:
The amount of revenue to be recognized at 31st March is $383500
Explanation:
The revenue amount that should be recognized in the income statement as at March 31,2020 is the sales price of $365000 plus three months of installation fee since installation is expected to last six months and three months have passed since installation began.
Hence, the amount of revenue as at 31st March is calculated thus:
Sales price $365000
Installation fee for 3 months(3/6*$37000) <u>$18500</u>
Total revenue as at 31st March $ 383,500
The rationale behind this is that revenue is only recognized when the seller has discharged his or her obligation under the contract not when cash is received and it is very clear that installation has been undertaken for 3 out of 6 months
Answer: Analysis of company's performance by the management.
Explanation: In the management discussion and analysis, the upper management of the company analyze and comment on the qualitative and quantitative characteristic of a company. This is seen as a secondary information in the company's yearly financial statement.
The MD and A, is considered valuable by investors as sometimes the management also comments about the upcoming projects of the company in such statements.
Answer:
Explanation:
Product Line
A product line represents related products under a single brand name produced, grouped and sold by the same company. Organisations use product lines to keep and expand their consumer base by adding products that will appeal to their customers in the same line of products which they are familiar with.
A consumer will always be motivated to buy a complete kit of products in a product line to take care of similar issues such as skin care, face care among others rather than buying different products from different brands to make up a complete kit.
Most product lines are marketed in groups and are placed together to appeal to customers. Specifically, organisations know that consumers will be willing to test new products that are part of the same product line they have known and are used to.
The answer is in each term's definition. bonds are less risky no matter what the quality. Stocks may earn bigger profits, but more of a gamble.
