Coupon payments... That's your answer!
Answer:
Explanation:
Adams division:
Net income - 605000
Minimum acceptable income = [Total capital employed*Rate of return] = 4000000*0.08=320000
Residual income= NI-Minimum acceptable income=605000-320000=285000
Jefferson division:
Net income - 315000
Minimum acceptable income = [Total capital employed*Rate of return] = 3250000*0.08=260000
Residual income= NI-Minimum acceptable income= 315000-260000= 55000
Answer:
B.
Explanation:
Types of Innovation:
-Dynamically Continuous
. Dramatic improvement over an existing state-of-the- art solution
, lwer risk as market demands are better understood
.
-Continuous Innovation
. Incremental change, step at a time, and low risk as focus is on slight changes to product or process
.
-Imitation
. Copying/adapting from another firm
. May not be necessarily the same, level of risk depends on the speed of the market demand.
-Discontinuous Innovation. Breakthrough, high risk and misreading the market
.
Needed to break with the past, buid architecture around a set of simple rules.
Continuous innovations represent the bulk of new products, and are best described as a modification to an existing product.
This type of innovation is often enough to set a brand apart from the competition. New flavors, bigger (or smaller) package sizes, or easy to open child-proof caps, as shown in the Aleve ad, are some examples.
Answer:
Long-term fixed-rate plan-$220,320.00
Short-term variable-rate plan-$224,280.00
The long-term fixed-rate plan is less costly as it has a lower interest expense
Explanation:
Total interest under the first plan=principal amount*interest rate*3 years
principal amount is $720,000
interest rate is 10.20%
total interest expense=$720,000*10.20%*3=$220,320.00
Interest expense under second plan=($720,000*8.50%)+($720,000*12.90%)+($720,000*9.75%)=$224,280.00
Answer:
Yield to maturity 10.87%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Coupon payment = $1,000 x 10% = $100
Selling price = P = $928
Number of payment = n = 15 year
The coupon rate can be calculated using following formula
Yield to maturity = [ $100 + ( $1,000 - $928 ) / 15 ] / [ ( $1,000 + $928 ) / 2 ]
Yield to maturity = $104.8 / $964
Yield to maturity = 0.1087 = 10.87%