I think the most appropriate answer would be C.
I hope it helped you!
Yes they was wrong because what FBI says goes
Answer:
$714,975
Explanation:
Data provided in the question:
Annual return = $150,000
Time, n = 6 years
Annual return, r = 7% = 0.07
Now,
Amount willing to pay for the project
= Present value of annual cash flows discounted at 7%
= $150,000 × [ (1 - (1 + r)⁻ⁿ ) ÷ r ]
= $150,000 × [ (1 - (1 + 0.07 )⁻⁶ ) ÷ 0.07 ]
= $150,000 × 4.7665
= $714,975
Deficit Financing. Wh ich means that government spends more money than it brings in and makes up the difference either by borrowing funds or minting more money. Deficit financing can happen for a lot of reason and not only due to war or social programs.
Answer:
The market price of a $1,000 face value bond is $944.
Explanation:
Market Value of Bond is calculated by following formula.
Coupon Payment = $1000 x 8% = $80
r = YTM = 8.66% = 0.0866
Face value = $1,000
n = number of periods = 16 yeasr
P = C [ (1 - ( 1 + r )^-n ) / r ] + [ F x ( 1 + r )^-n]
P = $80 [ (1 - ( 1 + 0.0866 )^-16 ) / 0.0866 ] + [ $1,000 x ( 1 + 0.0866 )^-16]
P = $80 [ (1 - ( 1 + 0.0866 )^-16 ) / 0.0866 ] + [ $1,000 x ( 1 + 0.0866 )^-16]
P = $679.19 + $264.78
P = $943.97
