Answer:
5.14%
Explanation:
Determining the pretax cost of debt is the first to do prior to ascertaining after tax cost of debt.
Pretax cost of debt can be computed using the rate formula in excel.
=rate(nper,pmt,-pv,fv)
nper is the number of times the bond would coupon interest,hence paying coupon every six months for 20 years means 40 coupon payments
pmt is the semiannual coupon bondholders would received from the bond i.e $1000*7.25%*6/12=$36.25
pv is the current market price at $875
fv is the face value of $1000
=rate(40,36.25,-875,1000)=4.28% semiannually
=4.28%
*2=8.56% annually
after tax cost of debt=8.56%*(1-t),where t is the tax rate of 40% or 0.40
after tax cost of debt=8.56%*(1-0.4)=5.14%
Answer:
Annual Rate=7.35%
Explanation:
Calculation for the annual interest rate must they earn to reach their goal
Number of years =27
PV =280,000
FV =1,900,000
Using this formula
Annual Rate=(FV/PV)^(1/n)-1
Let plug in the formula
Annual Rate=(1,900,000/280,000)^(1/27)-1
Annual Rate=6.7857^(1/27)-1
Annual Rate=1.07349-1
Annual Rate=0.0735
Annual Rate=7.35%
Therefore the annual interest rate must they earn to reach their goal will be 7.35%
Answer:
The first two solutions are attached in the excel document.
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation:
Solution 3:
Amount at which purchase on February 1 be recorded if the net method were used = $9,100*90%*97% = $7,944
Answer:Philo should sell.
Explanation:
If price falls $2, the final price would be $8. So Philo's income will be:
40 acre x 100 bushel x $8 = $32.000
And costs will be:
Planting cost = $20.000
Harvesting cost = $10.000
Total cost = $30.000
$32.000 - $30.000 = $2.000
So Philo's earning will be $2.000
Answer: The parliament is likely to allocate £ 1,23,93,800.62
We arrive at the answer as follows:
Amount allocated by President Obama $100,000,000
Amount England wants to contribute 20% of President Obama's allocation
Amount England wants to contribute in USD =
Exchange Rate $1. 61371/1 pound sterling
We can read the problem as if $1.61371 is equal to 1 pound sterling, how many pound sterlings are equal to $2,00,00,000?
Let number of pound sterlings be x
So, 
