1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Fiesta28 [93]
3 years ago
8

Navarro, Inc., plans to issue new zero coupon bonds with a par value of $1,000 to fund a new project. The bonds will have a YTM

of 5.31 percent and mature in 30 years. If we assume semiannual compounding, at what price will the bonds sell?
Business
1 answer:
frutty [35]3 years ago
4 0

Answer:

The bond will sell at $4831.43

Explanation:

Given C = 0, FV = $1000, YTM= 5.31%, n =30 years

BV= ?

BV for a zero coupon bond is = F / (1+r)^-n*t

So we are told there is semi annual compounding

have to calculate

n = 30*2 = 60 periods

r = 5.31/2 = 2.66%

BV = 1000/(1+0.0266)^-60

      =$4831.43

You might be interested in
When choosing between mutually exclusive projects, what is the best method to use?
KIM [24]

Answer:

Option C. The highest NPV is always the best option.

Explanation:

The reason is that IRR assumes that the reinvestment rate is also at IRR which is not a realistic assumption. The Net Present Value resolves this as it assumes that the reinvestment rate is cost of capital and hence is more better than IRR to appraise the project.

The decision rule in the Net present value method is that the project which has higher positive Net present value is regarded as best project among two mutually exclusive projects.

7 0
3 years ago
In a market economy, which of the following is NOT an accepted role of government?
SOVA2 [1]

Answer:

providing for national defense

Explanation:

yes

6 0
2 years ago
A firm’s liquidity level decreases when:_______.
katovenus [111]

Answer:

b) inventory is sold on credit.

Explanation:

Liquidity is defined as the a business to use its current assets to settle it's current liabilities.

This is calculated by using the working capital ratio.

Working capital ratio = Current assets ÷ Current liabilities.

Cash and inventory contribute to a business' liquidity.

When inventory is sold on credit, it does not result in immediate increase in cash as payment is in the future. So there is a reduction in the current asset of the company.

A reduction in the numerator of the working capital ratio results in lower value of the ratio (lower liquidity)

5 0
3 years ago
How physical asset valuation (PAV) and research and
stellarik [79]

Answer:

We'll take this one after the other.

A. First Physical Asset Valuation (PAV) refers to the act of writing up or writing down the carrying value of an organisations assets in its balance sheet.

In simple terms, it refers to increasing upwards or downwards the value of an organisations asset in its balance sheet.

When assets are written down, the following are likely to occur:

Critical changes to an organization’s business model or strategy, such as termination of the business and  loss of a regulatory licence;

A significant reduction in the cash flow or bottom line of the business;

when the long term growth rates, interest rates or other financial factors such as prices or value of currencies, upon which a business valuation based decline, this impacts the valuation of an asset negatively.

   

B. Research and  Development (R&D)

R&D refers to all the studies, scientific investigations and experiments carried out to enable the discovery and creation of a new or innovative product or service that is more efficient and effective.  

       

The reason there is a risk associated with R&D is that there are usually many elements of uncertainty.  

The ideas being tested are usually novel and have not been tried before.  

Some of the risks associated with R&D are:

the possibility that the new product will fail in the market;

a new product or service that is does not work

the possibility of cost creep. That is a situation where the cost of the R&D outweighs the potential profit from the product or service.

Cheers!

6 0
3 years ago
Question 4 of 10
Delvig [45]
THE ANSWER IS D………………..
6 0
2 years ago
Other questions:
  • A graduate student wants to examine the effect of print media versus televised media on individuals' position on several social
    15·1 answer
  • Whose work predicted that mass could be converted into energy and vice versa?
    10·2 answers
  • Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annu
    10·1 answer
  • Columbus Company owns 25% of Zanesville Inc. and accounts for the investment using the equity method. During the year, Zanesvill
    9·1 answer
  • Which of the following listings correctly describes the order in which the four types of budgets must be prepared?
    14·1 answer
  • Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $185,000, expenses of $103,700, The company paid $1
    5·1 answer
  • The field of economics is most concerned with studying:
    8·1 answer
  • Customer groups represent different segments if: ___________.a. Their needs require different products/services or different pri
    9·1 answer
  • What does economic problem mean?
    7·1 answer
  • Describe a presentation or a briefing you have conducted recently. how did you adapt it to your public? how did your auditors re
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!