Answer:
Cash payments:
March $30,300
April $51,660
May $58,490
Explanation:
The following costs amounting to $9,000 should be deducted from the projected expenses per month
A. Insurance costs (it had been prepaid in February)
B. Depreciation (it doesn't involve any cash movement)
C. Property tax (it won't be due for payment until June)
This leaves each month expense as shown in the attached schedule. And based on the 70 : 30 rule, the table reflects the full payment structure.
Answer:
$62,267.91
Explanation:
first we must calculate the interest rate = 10% + 6% + (10% x 6%) = 16.6%
now we can use the present value formula:
present value = future value / (1 + rate)ⁿ
present values for:
- cash flow year 0 = $17,100
- cash flow year 3 = $46,500/1.166³ = $29,333.06
- cash flow year 4 = $12,300/1.166⁴ = $6,654.43
- cash flow year 7 = $26,900/1.166⁷ = $9,180.42
total present value = $62,267.91
Answer:
The price of the bond is closest $101.36
Explanation:
It is noteworthy that a rational investor pays for a bond today the cash flows derivable from the bonds in future discounted to today's terms.
The future cash flows comprise of the yearly coupon interest of $5.5(5.5% *$100) for 3 years as well as the repayment of the principal $100 at the end of year 3.
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 5% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading $ 101.36 present value today.
