Answer:
I will be willing to pay $1,106 for a vanguard bond.
Explanation:
Coupon payment = Par value x Coupon rate
Coupon payment = $1,000 x 8%
Coupon payment = = $80
Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond =$80 x [ ( 1 - ( 1 + 7% )^-20 ) / 7% ] + [ $1,000 / ( 1 + 7% )^20 ]
Price of the Bond = $80 x [ ( 1 - ( 1.07 )^-20 ) / 0.07 ] + [ $1,000 / ( 1.07 )^20 ]
Price of the Bond = $848 + $258
Price of the Bond = $1,106
Answer:
The correct option is (D)
Explanation:
Using the accumulated cash flow sign test,
- This investment is a non-simple investment.
This is because the net cash flow changes sign (to positive and back to negative) more than once, during the study period.
- There are at most 3 i* values. That is values for Internal Rate of Return. This is owing to the multiple change in sign during the period.
The correct answer is option D - Non simple investment with at most 3 values for internal rate of return (i*)
Answer:
Life cycle analogy method
Explanation:
Life cycle analogy method A qualitative forecasting technique that attempts to identify the time frames and demand levels for the introduction, growth, maturity, and decline life cycle stages of a new product
Answer:
The correct answer is $220,500.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the net operating cash flow by using following formula:
Net operating cash flow = Net income - ( Ending - Beginning Inventory) - ( Beginning - ending in AP)
By putting the value, we get
= $226,000 - ( $49,000 - $48,000 ) - ( $39,000 - $34,500)
= $226,000 - $1,000 - $4,500
= $220,500
Answer:a The corporation can make a public issue of shares to obtain capital to make the purchase. ( B) The accountant will open a temporary account called the business purchase account and the vendor account to record the purchase
Explanation:
a. When a corporation want to purchase a existing business ,the purchase price may be paid either totally in cash or partly in cash and partly in shares or in some cases totally in shares. The method of payment is arranged between the corporation and the existing business. If the company makes a public issue of shares to raise funds for the purpose of acquisition of the business. A statement in the prospectus to issue the shares that the vendor will be paid either totally or partly in shares boost the investors confidence in the business because they see it as a sign that the vendor has faith in the future prospect of the business under the new ownership. The shares allotted as consideration for the purchase becomes part of the issued capital of the company.
b. The temporary account and the vendor account would include the following
1.Dr the business purchase account
Cr the vendor account
With the agreed purchase price,and the allotment of shares or debenture as part of the purchase price
2. Dr the asset, including Goodwill if any to their respective account,
Cr the total value of asset taken over in one amount to the business purchase account
3. Dr the total value of liabilities taken over in one amount to the business purchase account
Cr the liabilities to their respective account
4. Dr vendor account
Cr the corporation capital account both with the purchase price when paid
