1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AveGali [126]
3 years ago
10

A $1,000 six-year bond has an 8 percent coupon, is selling at par, and contracts to make annual payments of interest. The durati

on of this bond is 4.99 years. What will be the new price if interest rates increase to 8.5 percent
Business
1 answer:
Dovator [93]3 years ago
3 0

Answer:

$976.90 will be the new price if interest rates increase to 8.5 percent.

Explanation:

YTM = 8%

Change in interest rate = (8.5% - 8%) = 0.5%  <em>(Increase of 0.5% )</em>

%Change In Price of Bond = -Duration/(1+YTM) X Change in Rate

                                            = -4.99/(1+0.08) X 0.5%

                                            = -2.310%

There will be a decrease of 2.310% in Bond Price

New Bond Price = 1000 - (1000 X 2.310%)

                           = 1000 - 23.10

                           = $976.90

You might be interested in
Define a “core capability.” What are the core capabilities of Amazon, Google, and Walmart? List some new markets to which these
Misha Larkins [42]
1. A company's core capability is defined as the strategic advantages or the principal strengths of that company, including the combination of technical skills and pooled knowledge which allow the company to be competitive in the market place. The core capacities of a company allow it to do better in the market place than its competitors.

2.The core capabilities of Google, Walmart and Amazon include: excellent work culture, buying power, supply chain management, excellent use of information technology to support business, logistical superiority and international growth.

3. There are new market to which these companies could creatively apply their core capabilities. For example, Amazon can start offering assistance to researchers to write their scientific journals and to help them market it. Walmart can carve out a new market for itself by allowing customers to leave a list of what is needed every month. Walmart will then be supplying these to the people on a regular monthly basis. Google can expand its business to remote countries of the world, where internet access is not known yet by facilitating such in those areas. Google can also offer to help people search for what they need for payment.
6 0
3 years ago
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $225,51
Kryger [21]

Answer:

The inventory would be increased by $55,283 and the profit has been decreased by the same amount.

Explanation:

The reason is that the closing inventory has been increased by the difference of the correct and incorrect amount which is:

Closing inventory difference = $225,513 - $170,230 = $55,283

This will increase the closing inventory in the balance sheet and the increase in the closing inventory will decrease the cost of goods sold. The lower the cost of goods sold the greater is the profit.

6 0
3 years ago
Operation X feeds into Operation Y. X has an effective capacity of 55 units per hour. Operation Y has effective capstracity of 5
finlep [7]

Answer:

A) Overcoming

Explanation:

In this production process the fact that operation Y can only process 50 units per hour while the preceding operation (X) can process 55 units per hour will result in a queue and a capacity constraint.

If operation Y's effective capacity is increased to match operation X's, then the constraint has been overcome.

7 0
3 years ago
Blossom Company purchased a machine with a list price of $168000. They were given a 10% discount by the manufacturer. They paid
mixer [17]

Answer:

$11,870

Explanation:

Given:

List price = $168,000

Discount = 10%

Shipping cost = $1,000

Sales tax = $6,500

Salvage value = $40,000

Useful life = 10 years

Now,

Purchasing price = List price - Discount

Purchasing price = $168,000 - [10% × $168,000]

Purchasing price = $168,000 - $16,800

Purchasing price = $151,200

Costs that are directly related to the purchase of asset are capitalized.

Thus,

Cost = Purchasing price + Shipping costs + Sales tax

Cost = $151,200 + $1,000 + $6,500

Cost = $158,700

Now,  

Annual straight line depreciation = \frac{Cost-Residual Value}{Useful life}  

Annual straight line depreciation = \frac{158,700 - 40,000}{10}  

Annual straight line depreciation = \frac{118,700}{10}  

Annual straight line depreciation = $11,870

8 0
3 years ago
What percentage of businesses in America are home businesses?
Sladkaya [172]

Answer:

c

Explanation:

most are home businesses you can write off many things on taxes and have less overhead (bills and rent )

6 0
3 years ago
Other questions:
  • Assume you are participating in your employer's direct deposit program. On payday, the employer deposits your ________ into you
    10·1 answer
  • For the year ended December 31, 2015, Lopez Company has implemented an employee bonus program equal to 3% of Lopez’s net income,
    7·1 answer
  • How do I say sorry to Brainly when I said something bad
    15·2 answers
  • A firm using a polycentric staffing policy will: Group of answer choices a. be less likely to suffer from cultural myopia. b. se
    10·1 answer
  • As a result of the rising interest rates in this example, Businesses choose to reduce their Investment Spending by $_________ bi
    5·1 answer
  • Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,0
    12·1 answer
  • OSHA standards appear in the ___________ and are then broken down into ____________.
    8·1 answer
  • A proportion of membership of a group?
    10·1 answer
  • Estelle is a recent accounting graduate, and while she likes the idea raised by her fellow graduate Fernando to set up business
    8·1 answer
  • True or False: Restaurants rarely adjust the amount they purchase of items
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!