Answer:
Bond Price = $1212.895577 rounded off to $1212.90
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.08 = 80
Total periods (n) = 20
r or YTM = 0.06125
The formula to calculate the price of the bonds today is attached.
Bond Price = 80 * [( 1 - (1+0.06125)^-20) / 0.06125] + 1000 / (1+0.06125)^20
Bond Price = $1212.895577 rounded off to $1212.90
Answer:
20 is the socially optimal number
Explanation:
In this question, we are asked to calculate the socially optimal number of clean streets given the marginal cost of cleaning them.
To solve this problem, we employ a mathematical approach as follows:
Market demand = Sum of Individual demand
Magaret demand = p = (50-Q)/2 = 25-0.5Q
Thomas demand = P = 40-Q
Market demand = 25-0.5Q + 40-Q = 65-1.5Q
MC = 35
Socially optimal number = MC = Market demand
35 = 65-1.5Q
30 = 1.5Q
Q = 20
Answer:
The law of diminishing marginal utility.
Explanation:
Marginal utility is basically satisfaction derived from consuming an extra unit of product. According to the law of diminishing marginal utility as consumption increases the marginal utility derived from each additional unit decreases.
So when we consume 1 chips marginal utility is high, then as more is consumed we still get some positive utility out of it but at a decreasing rate now. At some point this utility equals zero after which it starts declining as more chips are consumed because it is not providing any satisfaction now. Therefore the chips should be consumed only up to the point where the marginal utility equal zero.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $27,000 and will increase sales by $88,000.
Effect on income= Increase on income - variable costs - fixed costs
Effect on income= 88,000 - (0.35*88,000) - 27,000= $30,200
Answer:
The maturity value of the note is <u>$132,000</u>
Explanation:
A Loan note is a promissory note that is signed to make a promise of an amount of Loan taken by someone that to be returned after a specific time with interest value at a defined in the loan note.
The maturity value of the loan note can be calculated as follow
Face value = $120,000
Interest rate = 10%
Time period = 1 years
Use following formula to calculate the maturity value of the loan note.
Maturity value = Face value x ( 1 + interest rate )^ numbers of years
Placing values in the formula
Maturity value = $120,000 x ( 1 + 10% )^1
Maturity value = $132,000
