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Lera25 [3.4K]
3 years ago
5

Suppose a $1,000 bond pays $40 per year in interest. Instructions: In part a, round your response to one decimal place. In part

b, round your response to two decimal places. a. What is the contractual interest rate ("coupon rate") on the bond? 4 % b. If market interest rates rise to 5 percent, what price will the bond sell for? $
Business
1 answer:
Lubov Fominskaja [6]3 years ago
5 0

Answer:

The correct answer for option (a) is 4% and for option (b) is $800.

Explanation:

According to the scenario, the computation for the given data are as follows:

Face value = $1,000

Annual interest = $40

Interest rate = 5%

(a). We can calculate the contractual interest rate by using following formula:

Contractual interest rate = Annual interest ÷ Face value

= $40 ÷ $1000

= 0.04 or 4.0%

(b). we can calculate the price of bonds by using following formula:

Price of bonds = Annual interest ÷ Market interest rate

= $40 ÷ 5%

= $800.00

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lianna [129]

Answer:

The list is follows:

a. Inflation has been abound​ 2.5% for some time. Village Realtors is considering measuring its land values in​ inflation-adjusted amounts - Stable-monetary-unit assumption

b. You get an especially good buy on a laptop​, paying only $ 300$300 when it normally costs $ 800. What is your accounting value for this laptop? - Historical cost principle

c. Burger King​, the restaurant​ chain, sold a store location to McDonald. How can Burger King determine the sale price of the store long dash—by a professional​ appraisal, Burger King​'s original​ cost, or the amount actually received from the​ sale? - Historical cost principle

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6 0
3 years ago
Wilma, Betty, and Fred are partners who share income and losses in a 5:3:2 ratio. Wilma decides to retire from the partnership w
Hoochie [10]

Answer:

<u>debited</u>

Explanation:

Partnership refers to a mutual agreement wherein two or more individuals agree carry out a business and to share profits and losses in a specified ratio or as per the clauses of the partnership deed.

When partners retire, the balances standing to the credit of their capital accounts needs to be settled or paid off.

As per the given information, Wilma is paid $45000 in cash. The journal entry in this case would be:

Wilma's Capital A/C                                    Dr.  $45000

    To Cash A/C                                                                $45000

For the remaining balance, Wilma shall be paid in cash as follows,

Wilma's Capital A/C                                    Dr. $5000

     To Cash A/c                                                            $5000

(Being settlement of a retiring partner's capital account being recorded)

3 0
3 years ago
( Help please suck on this question !! )
nalin [4]

Answer:A

Explanation:

Because as long as a bank does have customers over the next few years then they have to tackle customers engagement.

4 0
3 years ago
Prepare a narrated PowerPoint presentation that will highlight the following items.
vladimir2022 [97]

Answer:

I don't know

Explanation:

Prepare a narrated PowerPoint presentation that will highlight the following items.

a. Your calculations for the amount of property, plant, and equipment and the annual depreciation for the project

b. Your calculations that convert the project's EBIT to free cash flow for the 12 years of the project.

c. The following capital budgeting results for the project:

1. Net present value

2. Internal rate of return

3. Discounted payback period.

6 0
3 years ago
On April 23, Mrs. Y purchased a taxi business from Mr. M for a $60,000 lump-sum price. The business consisted of a two-year-old
vladimir2022 [97]

Answer:

Follows are the solution to the given points:

Explanation:

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She could also use Section 179 to decrease her taxable money to \$17,890 (\$36,890 - \$19,000) but include her deduction.

Her taxable annual income is \$15,840 (\$17,890 - \$2,050).

In point b:

They must allocate \$19,000 for the taxi and\$41,000 for their licenses, the customer list as well as the business by interacting with people register. Its cost of the material could be depreciated for 180 months, starting in April.

(\frac{41,000}{180}) \times 9\ \ months = \$2,050  is her amortization deduction.

The taxable income here = \$0 (from \  \$17,100 -\$19,000) = -1,900.

Section 179 could be requested if another income is earned on the tax return (such as W-2 wages).

As all Section 179 is unpaid with other earned income, it is carried forward into the next year.

3 0
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