Answer:
Difference in difference estimate = 50 - 5% = 45 %
Explanation:
a) Data and Calculations:
Market A Market B
Sales 240 410
Sales rise 360 430
Rise difference 120 20
Percentage of rise 50% 5%
120/240 x 100 = 50%
20/41 x 100 = 4.878% or 5%
Therefore, the Difference in difference estimate = 50 - 5% = 45 %
One can then say that the free warranties in market A brought about a difference in difference of 45% in Market A when compared to the no warranties in Market B. This can be seen from the presented data. Sales in A rose from 240 units to 360 units, an increase of 120 units or 50%. Sales in market B only rose from 410 to 430, an increase of 20 units or 5%. This difference in difference estimator shows the effect of the free warranty on market A and market B. This means that the firm could do better by introducing the free warranties for its product in market B, all things being equal.
Employee A:
40 X 9.5 = $380
Employee B:
38 X 8.25 = $313.50
Employee C:
39 X 7.75 = $302.25
Total:
380 + 313.5 + 302.25 =$995.75
Answer:
The new price of the bond is $928.94
Explanation:
Initially the bond's price is equal to its par value which means the coupon rate on bond and the market interest rates are the same i.e. 6%.
Th bond's price is calculated as the sum of the present value of the annuity of interest payments by the bond and the present value of the face value of the bond that will be received at maturity. The discount rate used to calculate the present values is the market interest rate.
As the bond is a semiannual bond, we will use the semi annual coupon payment, the semi annual percentage of the annual rate of interest on market and the number of semi annual periods outstanding.
Semi annual coupon payment = 1000 * 0.06 * 6/12 = $30
Number of semiannual periods till maturity = 10 * 2 = 20 periods
New market interest rate = 6 + 1 = 7% annual
New semi annual market interest rate = 7% / 2 = 3.5%
Price of bond = 30 * [ (1 - (1+0.035)^-20) / 0.035 ] + 1000 / (1+0.035)^20
Price of bond = $928.938 rounded off to $928.94
We used the present value of annuity ordinary formula for preset value of interest payments and the normal present value of principal formula for the face value.
Answer:
It will report 225,000
Explanation:
In the cash flow statment we focus on the cash received or used during the year. This is regardless of the gain or loss. When it was adquire the cash flow show use of cash for 75,000. Now, the land is sold. The company receive 225,000 cash. This amount is posted in the cash flow statement, as cash generated for investing activities.
<u>Resuming:</u>
On cash flow, you have to follow the money, not the gain or loss. If there is no cash receipt or disbursement, then you will not post anything.