If you look at the information in the question, you'll notice that the return is less than the cost of borrowing (loan interest rate) (ATIRR). This indicates that there is negative leverage and that the property cannot utilise it.
Positive leverage would be created in the first year if the property was purchased with expected returns equivalent to leverage.
Financial leverage is the process of using borrowed money (debt) to buy assets in the expectation that the income from the new asset or capital gain would outweigh the cost of borrowing. The leverage is summed up in this idea. By using debt (loan money), or leverage, we mean to increase the profits on an investment or project.
Leverage allows investors to increase their market buying power.
Leverage is a tool used by businesses to finance their assets. Rather than issuing stock to raise money, businesses can use debt to finance operations in an effort to boost shareholder value.
The most popular financial leverage ratios to determine how hazardous a company's position is are debt-to-assets and debt-to-equity.
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Answer:
I strongly believe that the requirement is to calculate the price of the bond.
The bond is worth $ 70,824,063.03
Explanation:
It is noteworthy that a rational would-be investor would pay for a bond a price that reflects the cash flows receivable from the bonds in future discounted to today's terms.
The future cash flows comprise of the semi-annual coupon interest of $4 million(10%/2 *$80 million) for 20 periods as well as the repayment of the principal $80 million at the end of period 20
Since coupon is paid every six months, the coupon would be twenty times over the life of the bond(paid twice a year for 10 years)
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 12% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading $ 70,824,063.03 present value today.
When were talking about the Federal Money Reserve we can eliminate B)sell securities on the open market. Because they don't do that when they want to increase money supply. C and D will be eliminated because they don't help in this way either. So the correct answer is A)reduce the discount rate
Answer:
b. building 28,000
notes payable 28,000
Explanation:
jaye company purchased a new building by signing a note for $28,000. the entry to record the transaction is:
a. building 28,000
cash 28,000
b. building 28,000
notes payable 28,000
c. note payable 28,000
cash 28,000
d. cash 28,000
note payable 28,000
Jaye's company is signing a note of 28,000 and purchasing a building of 28,000
The entry to record Jaye company's transaction is building 28,000, notes payable 28,000
The transaction will not be recorded in
Building:28,000, cash:28,000.
Note payable:28,00, cash:28,000
Cash:28,000, note payable:28,000
Therefore the correct answer is
b. building 28,000
notes payable 28,000
Answer:
to sell a security quickly, at a low transaction cost, and at a price close to its fair market value.
Explanation:
Marketability can be described as a measure of the rate at which a particular product will be purchased by potential customers. Marketability helps to evaluate the value of the product in the market.
Marketability helps marketing managers to determine if customers will be willing to purchase their products in the market. It helps them to know at what price a particular product can be sold to maximise profit. The quality of a product determined how well It will appeal to potential customers.
