You did not post the complete question so I will write only the missing components below that is needed to answer the question and some important definitions.
Definitions:
PVIFA - present value interest factor of annuity
= number of regular intervals per year at which time the borrowed amount is to be paid back
= annual interest rate
= number of years to payoff the debt
We need to find the interest rate that equates the price we paid for the bond with the cash flows we received. The cash flows we received were $100 each year for two years and the price of the bond when we sold it. Also, remember the YTM on the bond has declined by 1 percent.
Let us assume a par value of $1,000. we need to find the price of the bond in two years. The price of the bond in two years, at the new interest rate, will be:
$100(PVIFA8.42%,17) + $1,000(PVIF8.42%,17) = $1,139.69
Answer:
Therefore, the bond will sell for $
1,139.69 ± 0.1%
Answer:
Life cycle analogy method
Explanation:
Life cycle analogy method A qualitative forecasting technique that attempts to identify the time frames and demand levels for the introduction, growth, maturity, and decline life cycle stages of a new product
Answer:Raising the gas tax will likely encourage more non-highway related spending.
An increase in gas taxes will hurt middle-income Americans the most.
A gas tax hike will increase the price of consumer goods.
Tax hikes have a negative impact on economic growth.
Raising the gas tax will not solve the real problem.
Explanation:Lower gas price could add much as half a percentage point to the GDP growth in United States of America.
Answer:
Feb. 1
Common Stock $4,600 (debit)
Cash $4,600 (credit)
Jul. 15
Cash $3,120 (debit)
Common Stock $3,120 (credit)
Sept. 1
Cash $2,860 (debit)
Common Stock $2,860 (credit)
Explanation:
Feb. 1
Common Stock $4,600 (debit)
Cash $4,600 (credit)
200 shares × $23 = $4,600
Jul. 15
Cash $3,120 (debit)
Common Stock $3,120 (credit)
130 shares × $24 = $3,120
Sept. 1
Cash $2,860 (debit)
Common Stock $2,860 (credit)
130 shares × $22 = $2,860
Answer:
9.2%
Explanation:
expected return of the investment = potential return x chance of each return happening
Expected return of the investment:
- 20% chance of occurring x 30% potential return = 0.2 x 30% = 6%
- 50% chance of occurring x 10% potential return = 0.5 x 10% = 5%
- 30% chance of occurring x -6% potential return = 0.3 x -6% = -1.8%
- total expected return = 9.2%
