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kondor19780726 [428]
3 years ago
5

Suppose that a 6.250% semi-annual coupon paying bond is priced at 105.500 per 100 of par value. The tenor of the bond is 13 year

s. What is the yield to maturity?

Business
1 answer:
zaharov [31]3 years ago
8 0

Answer:

5.70%

Explanation:

In this question, we applied the RATE formula that is shown on the attachment below:

Provided that,  

Present value = $1,000 × 105% = $1,050

Assuming figure - Future value or Face value = $1,000  

PMT = 1,000 × 6.250% ÷ 2 = $31.25

NPER = 13 years × 2 = 26 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the yield to maturity is 5.70%

We assume the semi annual basis is followed so we half the interest rate and the coupon rate and doubles the time period

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When Alex, the marketing manager of Hartwell Inc., realized that his plan to increase sales levels was not producing the results
nadya68 [22]

Answer:A

Explanation:

Planning

7 0
3 years ago
The Quorum Company has a prospective 6-year project that requires initial fixed assets costing $962,000, annual fixed costs of $
diamong [38]

Answer:

5375

Explanation:

Given that:

Initial Fixed assets costing = $962000

Annual fixed costs = $403400

Variable cost per unit = $123.60

Sales price per unit = $249.00

Discount rate = 14%

Tax rate = 21%

The contribution per unit = Sales price - Variable cost

= $(249.00 - 123.60)

= $125.40

The present value break-even point(BEP) is the region of sales level where the net present value (NPV) equals zero.

Assuming that the sales level = p

i.e.

NPV = PV(of inflows - of outflows)

Inflows = (p * contribution per unit - annual fixed cost)( 1- tax rate) + depreciation * tax rate

= (p * 125.4 - 403400) ( 1 - 0.21) + depreciation * tax rate

where;

depreciation = initial fixed assest cost/ lifetime of the project

= (125.4p - 403400)*0.79 + (962000/6)*0.21

= (125.4p - 403400)*0.79 + (160333.33)*0.21

= (125.4p - 403400)*0.79 + 33670

Now, the PV of the inflows =PV factor(6 years, 14%) * inflows

= inflows * \dfrac{( 1-(1.14)^{-6})}{0.14}

= inflows * 3.8887

Replacing the value for inflows, we have:

=((125.4p - 403400)*0.79 + 33670)* 3.8887

The PV of the outflows = Initial Fixed asset cost = $962000

∴

Equating both together using:

PV(of inflows - of outflows) = 0

((125.4p - 403400)*0.79 + 33670)* 3.8887 - 962000 = 0

((125.4p - 403400)*0.79 + 33670)* 3.8887 =  962000

(99.066p - 318686 + 33670) * 3.8887 =  962000

(99.066p - 285016) * 3.8887 =  962000

385.24p - 1108341.72 = 962000

385.24p= 962000 + 1108341.72

385.24p= 2070341.72

p = 2070341.72 / 385.24

p ≅ 5375

6 0
2 years ago
Procter & Gamble determined that its Thermacare Heat Wrap was underperforming and lacked a desired level of growth potential
Kamila [148]

Answer:

Decline

Explanation:

there are four stages of product life cycle

1. introduction

2. growth

3. maturity

4.  decline

In decline stage growth declines as a result of decrease in demand. The best decision at this stage is to divest the asset. Since Thermacare heat wrap was under performing it must be in decline stage and divestment of the brand was done by Procter and Gamble

3 0
3 years ago
Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers. The Hinge Division produces
Luden [163]

Answer:

Minimum transfer price = $21

Explanation:

<em>Transfer price is the price at which goods are exchange between branches or divisions of the same group</em>

<em>Where  a division is operating at the less than the existing capacity, to optimist the group profit, the minimum transfer price should be set as follows</em>

Minimum transfer price = Variable cost

Note that the fixed of $12 per unit (i.e 33-21) is irrelevant for this purpose, whether or not Hinges produces, it will be incurred either way.

It is worthy of note that there is no opportunity cost associated with any transfer to the Doors division because Hinges is currently having excess capacity.

Therefore, any offering price equal to or above the variable cost of $21 would be acceptable and optimize the group profit.

Hence, the minimum transfer price = $21

3 0
3 years ago
The first of two major components of developing a marketing strategy is to _______. a. select a target market b. determine a seg
Brrunno [24]

Answer:The first of two major components of developing a marketing strategy is to<u> select a target market.</u>

<u>Explanation:</u> After determining business products and services the business needs to identify the target market. Identifying the target market is the major step in developing a marketing strategy.

Steps to select a target market

  1. Target market is actually those customers whom we want to sell our products.Concentrating on target market will make it easier to sell our products.
  2. Customers can be targeted on the basis of age,gender,income,occupation,educational level.
  3. Look at the competition that exist .Identify those areas that have been overlooked by our competitors.
  4. If business is already existing than identify those products and services which are bought by current customers and the benefits that they are getting from it.
  5. Finally target those customers who actually need your products and services.

5 0
3 years ago
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