Answer:
A a discount
Explanation:
the bond yield 8.2% at par as this is the certificate coupon payment
we should remember the basic of how to determinate a rate is:
As the return are fixed the only way to alter the rate of return is by changing the cost (market price of the bond)
The YTM is 9.7% This means the bond is acquire with a discount to make it yield higher.
Answer:
The journal entry which is to be recorded for the dishonored note is shown below:
Explanation:
The journal entry which is to be recorded for the dishonored note is as follows:
Accounts Receivable A/c..............................Dr $2,075
Notes Receivable A/c...................................Cr $2,000
Interest Revenue A/c......................................Cr $75
Being the note which is received got dishonored
As the note got dishonored so the accounts receivable account will be debited against the notes receivable account and the account of interest revenue is also credited.
Working Note:
Interest revenue = Amount of notes receivable × Rate × Months / Total number of months
= $2,000 ×5% × 9/12
= $75
Answer:
$36.8 million
Explanation:
The computation of the free cash flow is shown below:
= EBIT × (1 -Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - net capital Expenditure.
= $56 million × ( 1 - 0.30) + $5.6 million - $2.7 million - $5.3 million
= $39.20 million + $5.6 million - $2.7 million - $5.3 million
= $36.8 million
All other information which is given is not relevant. Hence, ignored it
Answer:
interest expense for the first semiannual interest period and subsequent: 3,965.3 dollars
Explanation:
face value 94,000
proceeds 91,947
discount 2,053
under straight-line method the discount amortization will be equally distributed among the payment
2,053 / 10 payment dates = 205.3
Then, we have to add the cash outlay in favor of the bondholders:
94,000 face value x 8% coupon rate / 2 payment per year = 3,760
Total interest expense: 3,760 + 205.3 = 3,965.3
Answer:
The Fixed-Order-Quantity method depends on when to order a fixed amount. The order will be placed when the inventory level reaches the reorder point. E.g. a new order is placed every time inventory level is below 100 units.
The Fixed-Order-Interval works differently, since the inventory level is checked every certain amount of time, and an order is made when the level is below an specific reorder point. E.g. inventory is checked every 2 weeks.
The main difference between both systems is that FOQ continuously checks the inventory level, while FOI checks the inventory level following a schedule. The FOQ should result in a more stable inventory level and number of orders.
The FOI requires a larger safety stock because the risk of selling more than expected always exists. E.g. you check inventory every 2 weeks, and you last checked a Tuesday. If suddenly a client places a large order on Wednesday, you are at risk of a stockout for 13 days.
