Answer:
The answer is "6".
Explanation:
In the given question the response is 6 because the new rate is the lower of the index + margin (in that case 5 + 3 = 8) whenever the interest rate changes as well as the current rate + cap (in that instance the value 4 + 2 = 6). Its rate of interest would also be 6 percent after the very first adjustment.
Answer: E- create annual taxable income to individual bondholders
Explanation: Zero coupon bonds are bonds that are sold or bought by investors lower than the face value of the bond. they are long term bonds that do not generate interest throughout the life of the bonds.
These bond are usually issued by the US Treasury, Corporations, Local and state Government.
Bond owners can only make money on bond as the price in the market fluctuates against the face value. No payment is made on these bonds until maturity which is a long time say 10 to 15 years.
On these bond investors may have to pay income taxes on the interest that accrue on the bond yearly.
Answer:
$700
Explanation:
The computation of the average dividend amount paid is as follows:
Total net income for first four years is
= $6,000 + $4,000 + $7,000 - $3,000
= $14,000
And, the ending retained earning balance after 4 years is $11,200
So, the dividend payment would be
= $14,000 - $11,200
= $2,800
For per year it would be
= $2,800 ÷ 4 years
= $700
Answer:
3.37 years
Explanation:
Calculation to determine what The payback period of the project is closest to
First step is to calculate the Net Cash inflow for the year
Net Cash inflow for the year =$114,000-$31,000
Net Cash inflow for the year =83,000
Now let calculate the Payback period
Using this formula
Payback period=investment/Net Cash inflow for the year
Let plug in the formula
Payback period=$280,000/83,000
Payback period=3.37 years
Therefore The payback period of the project is closest to 3.37 years
