Answer:
R = 7% x $1,000 = $70
Po= R/2(1-(1+Kd/m)-nm/Kd/m + FV/(1+Kd/m)nm
Po = 70/2(1-(1+0.0682/2)-13.5x2/0.0682/2 + 1,000/(1+0.0682/2)13.5x2
Po = 35(1-(1+0.0341)-27/0.0341 + 1000/(1+0.0341)27
Po = 35(17.4663) + 1,000/2.4728
Po = $611.3205 + $404.40
Po = $1,015.72
The correct answer is C
Explanation:
The current price of a bond is equal to present value of coupon plus the present value of face value of the bond. The bond pays semi-annual interest, thus, we will divide the coupon by 2 and then determine the present value. The bond yield will also be divided by 2.
Po = Current price of the bond, R = Coupon, Kd = Bond yield, FV = Face value, n = Bond maturity and m = No of times coupon is paid in a year
Answer:
Explanation:
Attached is a workbook with a schedule of Projected annual cashflow for Snow Inc.. The annual cashflow entries are projected using a rate of 8%. For instance, in the first year, our cashflows are not subject to any projection. But in the second year, the annual revenue of $1400000 is projected using the required rate of return.
Revenue (second year) = 1400000[1+0.08]^1
= 1400000 × 1.08
Revenue = $1,512,000
This technique was used to project the value for all cashflow elements for the rest of the years in consideration.
Answer:
B. Keynesian
Explanation:
Keynesian economics or theory believes that government can boost the economy and stimulate or increase demand, in times of economic downturn, by increasing spending and lowering taxes.
This increase in government activities will create jobs and reduce unemployment and lead to more spending and investment, by individuals and businesses, in the economy.
Answer:
$34,000
Explanation:
Accounting profit = Total revenue - Explicit costs
i.e Total revenue = $50,000
Explicit costs = $12,000 + $1,000 + $3,000 = $16,000
Therefore; $50,000 - $16,000 = $34,000.
Answer:
a. 41.6 million
b. 42.28 million
Explanation:
A) GIven
forecast in june = Sjune = 42 million
Checks recived in june = Xjune = 40 million
Smoothing constant = a = 0.2
So for july
Sjuly = a*Xjune + (1-a)*Sjune
=0.2*40 + (1-0.2)*42 million
=8+33.6 = 41.6 million
B) forecast in july = Sjuly = 41.6 million
Checks recived in july = Xjuly = 45 million
Smoothing constant = a = 0.2
So for August
Saugust = a*Xjuly + (1-a)*Sjuly
=0.2*45 + (1-0.2)*41.6 million
=9+33.28 = 42.28 million
<em>Note: This uses an exponential smoothing to forecast the results, but from the number of checks recived we see that it increases linearly. So we need a linear forecasting method .</em>
