Answer:
interest rate = 15%
value of the bond will decrease
Explanation:
given data
face value = $5,000
time = 5 year
annual coupon payment = $150
solution
we get here interest rate on the borrowed funds that will be as
interest rate =
× 100
put here value we get
interest rate =
× 100
interest rate = 15%
and
when bond issued at interest rate = 3 %
but market interest rate 4%
so seller will reduce price of bond less than the face value
because we will look for atleast 4% payout when bond matures
so value of the bond will decrease
Answer:
Simple rate of return is 5.8%
Therefore option (a) is correct option.
Explanation:
It is given that purchase cost = $793800
Company saving per year = $133000
Yielding = $21200
Annual depreciation = $88200
Annual profit = $133000 - $88200 = $44800
Net investment is equal to = $793800 - $21200 = $772600
Simple rate of return
= 5.8%
Therefore simple rate of return is 5.8 %
So option (a) is correct.
Answer: B. Both firm A and firm B choose the low price.
Explanation:
Both firm A and Firm B will choose the low price and make profits of $3 if there is no cooperation.
This is because at any other price, the other firms could go with the low strategy and get more profit.
For instance, if Firm A is using a low price and Firm B is using a high price then Firm A makes profit of $10 whilst B makes $1.
Conversely, if Firm B charges a low price and A a high price, A will make paltry profits of $1 while B would make $10.
Their best option therefore is to both pick the low price and make $3.
If they were cooperating they could both charge a high price and make $5 each.
Your question was incomplete so I attached the payoff matrix.
Answer:
savings accounts or checking accounts