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tiny-mole [99]
3 years ago
13

Exodus Limousine Company has $1,000 par value bonds outstanding at 17 percent interest. The bonds will mature in 40 years. Use A

ppendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the percent yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)
Business
1 answer:
deff fn [24]3 years ago
5 0

Answer:

Consider the following calculation

Explanation:

Yield to maturity is not given here. So we assume that Yield to maturity is 10%.

Present value of interest payment :

PV = A*PVIFA (n= 40,i =10%)

= 170*9.7791

= 1662.45

Present value of principal payment at maturity

PV = FV*PVIF (n= 40,i =10%)

= 1000 * .0221

= 22.10

Current price of bond = 1662.45+22.10

= $ 1684.55

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Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. The beginning
harkovskaia [24]

Answer:

$87,000

Explanation:

Calculation of the conversion cost for November.

Conversion cost can be defined as the combination of both direct labor costs and manufacturing overhead costs that are vital to help convert raw materials into product.

Using this formula

Total Conversion cost = Direct labor cost + Manufacturing overhead cost

Hence,

Direct labor cost $25,000

Add Manufacturing overhead cost $62,000

Total Conversion cost $87,000

Therefore the conversion cost for November is $87,000

4 0
3 years ago
During her psychology test, Kelsey could not remember the meaning of the term MNEMONICS. Surprisingly, however, she accurately r
ehidna [41]

Answer:

A) automatic processing

Explanation:

We process data in two basic ways: controlled processing and automatic processing. Controlled processing is a conscious process where we are aware of what we are doing. On the other hand, automatic processing happens unintentionally and without requiring our attention.

5 0
3 years ago
1. A parent sells merchandise to its subsidiary at a markup of 20% on cost. In the current year, the subsidiary had $120,000 in
NARA [144]

Answer:

The subsidiary reports cost of goods sold at A. $660,000.

Explanation:

Cost of goods sold is the direct cost of producing or purchasing the goods sold by a business. The formula for cost of goods sold is as follows:

Cost of goods sold = Opening inventory + Purchases - Closing inventory

The subsidiary calculates its cost of goods sold as follows.

Opening inventory           $120,000

Add: Purchases                $720,000

Less: Closing inventory    ($180,000)

Cost of goods sold           $660,000

Therefore, the correct option is A. $660,000.

6 0
3 years ago
Which one of the following actions by a financial manager is most apt to create an agency problem? Increasing current profits wh
MrRissso [65]

Answer: Increasing current profits when doing so lowers the value of the company's equity.

Explanation:

The main purpose of a company is to increase the wealth of shareholders. In their capacity as stewards for the company, managers should be working therefore to achieve this goal.

When management neglects this goal and begins to seek an improvement in their welfare and wealth instead of the shareholder', this is an Agency problem.

If a Financial manager is increasing current profits even though doing so will lower the value of the company's equity, this can create an agency problem because the shareholders are suffering but the finance manager might get rewarded for increasing profits.

6 0
3 years ago
Digg Co. installs a manufacturing machine in its factory at the beginning of the year at a cost of $36,000. The machine's useful
Nastasia [14]

Answer:

Annual depreciation (year 1)= $1,400

Explanation:

Giving the following information:

Buying price= $36,000.

Useful units= 300,000 units of product.

Salvage value= $6,000

During its first year, the machine produces 14,000 units of product.

To calculate the depreciation expense for the first year under the units of production method, we need to use the following formula:

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= [(36,000 - 6,000)/300,000]*14,000

Annual depreciation= 0.1*14,000= $1,400

3 0
3 years ago
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