Answer:
Explanation:
a) A bond is simply a type of loan. Investors lend a company money when they buy its bonds. In exchange, the company pays an interest “coupon” (the annual interest rate paid on a bond, expressed as a percentage of face value) at predetermined intervals (usually annually or semiannually) and returns the principal on the maturity date, ending the loan.
b) Owning stocks means you're also a company owner.
When you buy stocks (shares ), you're buying a share of the company's assets and its profits. In fact (and in law), you're a part owner of the company. It gives you a right to own the Company in the proportion of money you invested. Such stocks are also traded on stock exchange if it is a listed company.
c)
The annual rate of return is calculated by taking the amount of money gained or lost at the end of the year and dividing it by the initial investment at the beginning of the year. E.g you invested $100. you earned $20 in one year. So annual rate of return will be 20/100= 20%.
d) Total amount gained is $5 (105-100). Amount invested was $100. So return is 5/100 = 5%.
e) Total amount gained is $7. That is 5 (105-100) plus 2 (dividend). Amount invested was $100. So return is 7/100 = 7%.
Answer:
See below.
Explanation:
For payback period we use,
Payback = Initial outlay / Annual cash flow
Payback = 190,900/49,900 = 3.82 years
Annual rate of return is calculated as follows,
Annual rate of return = Average profit / Initial outlay *100%
Annual Rate of return = 11600/190,900) *100% = 6.08%
To calculate the NPV we discount the cash flows.
12% annuity factor for 5 years = 3.6048
PV of cash flows = 49,900*3.6048 = $179,879.52
NPV = 179879.52 - 190,900 = -$11,020.48 (negative)
Hope that helps.
Perseverance is the most important trait of a successful business owner
Answer:
Assets: 180,000
Explanation:
Accounting Equation Formula:
Assets = Liabilities + Owner's Equity
The accounting equation shows which resources the company has for the development of its activities and how they are financed. Assets are those mentioned resources, such as cash, bank accounts, inventory, etc. Those assets can be financed by external or internal sources. Liabilities represent external sources, which means, obligations. Instead, Owner's Equity represents internal sources, which means issuing equity shares. As every resource have to be finance either external or internally, the value of the Asset should match the add of Liabilities and Owner`s Equity.
