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otez555 [7]
3 years ago
13

Consolidated Enterprises issues $1 million face value, five-year bonds with a coupon rate of 6.0 percent. At the time of issuanc

e, the market interest rate is 5.0 percent. Using the effective interest rate method of amortization, the carrying value after one year will be closest to:
Business
1 answer:
valentinak56 [21]3 years ago
8 0

Answer:

$1,035,459.51

Explanation:

First we must determine the issuing value:

  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $1,060,000

using an excel spreadsheet to calculate the bond's price with a discount value of 5%:

the bonds were sold at $1,043,294.77

the effective interest expense = bond's price x market interest = $1,043,294.77  x 5% = $52,164.74

bond's value = bond's price - (coupon payment - effective interest) = $1,043,294.77 - ($60,000 - $52,164.74) = $1,035,459.51

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Answer:C. Simultaneous production and consumption.

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Heterogenity which refers to different qualities in firms will lead to different products. Time perishable capacity which means idle time during low patronage will still allowed products differences, Abilities to limit the discretionary input of personnel will not debar product differences and Customer provides significant input into the process will allowed products differences.

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3 years ago
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2 years ago
If net operating income is $83,000, average operating assets are $415,000, and the minimum required rate of return is 13%, what
tester [92]

Answer:

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Explanation:

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Here

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This should be the answer and the options provided are wrong

6 0
3 years ago
A consumer downloads 4 movies and 3 apps per week. Suppose the price is $4 per movie and $4 per app, and the marginal utility th
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Answer:

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