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krok68 [10]
3 years ago
6

A 10-year $1,000 bond pays a nominal rate of 9% compounded semi-annually. If the market interest rate is 12% compounded annually

and the general inflation rate is 6% per year, find the actual-and constant-dollar amounts (in time-0 dollars) of the 15th interest payment on the bond.
Business
1 answer:
skelet666 [1.2K]3 years ago
3 0

Answer:

a) actual dollar = $60

b) Constant dollar of the 15th payment = $38.710

Explanation:

Facts from the question:

The Face value of the bond = $1,000

Nominal Interest rate = 12% and it compounded annually

General inflation rate = 6%

The question: Determine the 15th interest payment on the bond.

Step 1: The coupon for the amount of semi annual payment is as follows:

Coupon= (Interest rate/ Number of compounding times in a year) x face value of the bond

= (0.12/2) x 1000

= $60 -= Actual dollar amount

Step 2: Determine the 15th payment and this will represent the middle of the 8th year or (7 1/2) year.

To calculate this=

Constant dollar amount of the 15th interest payment

= Actual dollar amount (above) / (1 + inflation rate)∧n

where n= the number of years = 7.5 years

= $60 / (1 + 0.06) ∧7.5

= $60/1.55

= $38.710

This means the constant dollar amount on that 15th payment = $38.710

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Answer:

The answer is D

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Return on Investment (ROI) is a ratio

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The numerator must be profit while the denominator must be related to cost of Investment.

In all of the options, it is only option D that has revenue(sales) as the numerator which makes it automatically wrong.

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andreev551 [17]

Answer:

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= (0.50 × 30) + (0.20 × 46) + (0.30 × 22)

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8 0
3 years ago
Hull Company’s record of transactions concerning part X for the month of April was as follows.
olga55 [171]

Answer:1. $7720  

2. $7945

3. $7758

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Total cost of Sales   = Total number of units Sold * Total Cost of inventory sold    

                                  = 100units*$5+ 300units*$5.30+ 200units*$5.35 + 450units*$5.60

                                   =$7720

Total units sold=1450  we started from first inventory which was the balance of inventory of 100 units downwards up to the 1450th unit sold that was purchased on the 26th of April by the company.

2. Last in first out method is where the last bought inventory is sold first.

Total cost of sales= Total number of units sold * Total cost of units sold =200units$*5.80+ 600units*$5.60+ 200units*$5.35+300units*$5.30+150units*$5.1

=$7945

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3. Average Cost = (Sum of all costs/Total number of costs)* total units sold

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4 0
3 years ago
ou are the loan department supervisor for the Pacific National Bank. The following installment loan is being paid off early, and
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Answer:

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Base on the scenario been described in the question, we can use the following method to solve the problem

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4 0
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If your firm is operating in the negatively sloped portion of a long-run average total cost curve, then your production exhibits
Zolol [24]

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In this question the firm is operating in the negative sloped portion of the long-run average total cost curve, which shows that it has a "Decreasing returns to scale " .

8 0
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