Answer: 9.04%
Explanation:
1 year rate today = 5% = 0.05
2 years rate today = 7% = 0.07
Maturity of longer bond = 2
The ending return if the 2 years bond are bought will be thesame as the needed return on series of a year bond which will be 1.1449
The market's forecast for 1-year rates 1 year from now will be calculated as:
= 1.05(1+X) = 1.1449
1.05 + 1.05X = 1.1449
1.05X = 1.1449 - 1.05
1.05X = 0.0949
X = 0.0949/1.05
X = 0.090381
X = 9.04%
Answer:
Increase in income= $550,000
Explanation:
Giving the following information:
Variable costs per unit:
Manufacturing $60
If a special pricing order is accepted for 5,500 sails at a sales price of $ 160 per unit
Because there is no change in the fixed costs and there are no variable selling and administrative costs, the effect on income will be equal to the change in total contribution margin.
Total contribution margin= number of units* (selling price - unitary variable cost
Total contribution margin change= 5,500* (160 - 60)= $550,000
Increase in income= $550,000
<em>Here's the remaining part of the question</em><em>:</em>
<em>Please analyze and place each item in the appropriate financial statement to which it belongs;</em>
<em> Revenues, Long-term liabilities, Owner's equity, Insurance expense, Land, Patents, Costs of Goods Sold, Income tax, Advertising expense, Insurance expense, Net change in cash, Accounts Receivable</em>
<u>Explanation</u>:
1. Balance Sheet: Note that this financial statement usually shows the asset and liabilities of the firm's account for a particular period of time. These items are found:
- Owner's equity,
- Patents,
- Long-term liabilities
- Accounts Receivable
- Land
2. Income Statement: this financial statement is primarily focused on the revenues and expenses expenses of the firm. Items found includes;
- Revenue,
- Costs of Goods Sold,
- Advertising expense,
- Income tax,
3. Statement of cash flow
Answer:
<em>a. Housing prices are down. </em>
<em>c. Less demand means more options for buyers.</em>
<em> d. Less demand means less competition with other buyers.</em>
Explanation:
During a <em>recession</em> in the economy, the <em>aggregate demand</em> is on a lower side. This makes the housing prices lower. Lower prices due to lower demand, imply more options for the buyers. Lower demand indicates less competition with other buyers for a buyer.
Hence, all (a), (c) & (d) are the main solutions to the problem, that's why it's easier to get a mortgage.
