What determines how a change in prices will affect total revenue for a company?

A $ 5000 bond with a coupon rate of 6.7% paid semiannually has eight years to maturity and a yield to maturity of 7.8%. If int

prohojiy [21]

Answer:

As a result of an increase in the YTM, the price of the bond will fall $4677.19 from to $4593.67

Explanation:

The bonds are valued or priced based on the present value of annuity of interest payments and the present value of the principal. Based on the YTM of 7.8% the bonds are priced at,

coupon payment = 5000 * 0.067 *1/2 = $167.5

Semiannual YTM = 7.8 *0.5 = 3.9%

Semi annual periods to maturity = 8 * 2 = 16 periods

Old Price = 167.5 * [( 1 - (1 + 0.039)^-16 + 5000 / (1+0.039)^16

Old Price = $4677.19

New semiannual YTM = 8.1% / 2 = 4.05%

New Price = 167.5 * [( 1 - (1+0.0405)^-16) / 0.0405] + 5000 / 1.0405^16

New Price = $4593.67

7 0

2 years ago

Answer the question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government

SVEN [57.7K]

B.) Remain unchanged

4 0

3 years ago

Q 4.24: At the end of March, Paul’s Painting hired five temporary employees to work on a project that began on April 5 and ended

Nookie1986 [14]

Answer:

At the end of March, Paul’s Painting hired five temporary employees to work on a project that began on April 5 and ended on April 28. Paul’s received 100% of the total payment for the project on May 3. In this situation, both cash basis accounting and GAAP require that Paul’s recognize the employees’ total salary expense in April.

Explanation:

A collection of accounting rules and standards usually followed, for financial reporting is known as GAAP (generally accepted accounting principles) .

For businesses, GAAP needs accrual accounting.

Accrual accounting operates on the basis of matching both revenue and expenses. Revenues and the related expenses occur concurrently, though the cash transaction concerning thereto might happen in some other period.

In the situation given in the question, the revenue from the project is earned in April, subsequently, the salary expense related to that work should also be recognized in the same period due to an accrual basis.

7 0

3 years ago

Read 2 more answers

Listed below are the lengths (in inches) of each snake in the Clarmont Zoo’s reptile house

Elanso [62]

The mode is 50 the most frequent

6 0

2 years ago

Litton Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the b

Minchanka [31]

Answer:

Overapplied overhead= $7,575

Explanation:

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 1,250,000 / 40,000

Predetermined manufacturing overhead rate= $31.25 per machine hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 31.25*4,780

Allocated MOH= $149,375

Finally, the over/under allocation:

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 141,800 - 149,375

Overapplied overhead= $7,575

6 0

3 years ago