Answer:
After 25 days of lease, the purchase cost will be the same as the lease cost.
Explanation:
a) Data and Calculations:
Initial investment (purchase) cost = $11,000
Lease cost = $10,000 ($500 * 20)
Difference in purchase and lease cost = $1,000 ($11,000 - $10,000)
Daily lease cost after the first 20 days = $200
Additional number of days for purchase cost to equal lease cost = $1,000/$200 = 5 days
b) One can infer from the above that it will benefit the company more to purchase the set of servers by making the initial investment of $11,000 than leasing the servers.
Answer:
True
Explanation:
Routinized response behavior is the decision making process used by consumers when they buy frequently purchased, low cost items that require very little search and decision effort.
Convenience goods are low cost goods that are purchased frequently with very little search and decision effort, e.g. candy, cold drinks, etc.
Answer:
The bond price is $ 926.24 today
The bond price in six months is $ 936.81
Explanation:
Find detailed calculation in the attached spreadsheet.
Answer:
b) implies that security prices properly reflect information available to investors and that active traders will find it difficult to outperform a buy-and-hold strategy.
Explanation:
The efficient market hypothesis states that the price of assets in the market reflects all information that is available. This means that it is impossible to gain unfair advantage over others in the market as a result of privileged information about a transaction.
In this scenario a buy and hold strategy will be most effective because investors can buy assets and hold them for a long time regardless of short term fluctuations. Sale is made at a optimal time.
Active traders will be subject to short term fluctuations and will most likely not perform like the buy and hold traders
Answer:
The bonds were issued at $87,590,959
Explanation:
The bonds will be issued at the present value of the coupon and maturity discounted by the market rate
C 6,000,000.000 ( 100 million x 6%)
time 30 (2051 - 2021)
market rate 7% = 7/100 = 0.07
PV $74,454,247.1010
PV of the maturity
Maturity 100,000,000.00
time 30.00
rate 0.07
PV 13,136,711.72
Total current value of the bonds:
PV coupon $ 74,454,247.1010
PV maturity $<u> 13,136, 711.7155 </u>
Total $87,590,958.8165