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serg [7]
3 years ago
14

An investment firm recommends that a client invest in bonds rated​ AAA, A, and B. The average yield on AAA bonds is 4​%, on A bo

nds 5​%, and on B bonds 8​%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following​ conditions? A. The total investment is ​$28 comma 000​, and the investor wants an annual return of ​$1 comma 460 on the three investments. B. The values in part A are changed to ​$38 comma 000 and ​$1 comma 990​, respectively.
Business
1 answer:
Sophie [7]3 years ago
3 0

Answer:

let A = AAA bonds that yield 4%

let a = A bonds that yield 5%

let B = B bonds that yield 8%

A = 2B

A)

A + a + B = 28,000 (replace A with 2B)

0.04A + 0.05a + 0.08B = 1,460 (replace A with 2B)

2B + a + B = a + 3B = 28,000 ⇒ a = 28,000 - 3B

0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,460 (replace a with 28,000 - 3B)

0.05(28,000 - 3B) + 0.16B = 1,400 - 0.15B + 0.16B =1,460

1,400 + 0.01B = 1,460

0.01B = 1,460 - 1,400 = 60

B = 60 / 0.01 = $6,000

A = $12,000

a = $28,000 - $6,000 - $12,000 = $10,000

AAA bonds = $12,000

A  bonds = $10,000

B bonds = $6,000

B)

A + a + B = 38,000 (replace A with 2B)

0.04A + 0.05a + 0.08B = 1,990 (replace A with 2B)

2B + a + B = a + 3B = 38,000 ⇒ a = 38,000 - 3B

0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,990 (replace a with 28,000 - 3B)

0.05(38,000 - 3B) + 0.16B = 1,900 - 0.15B + 0.16B =1,990

1,900 + 0.01B = 1,990

0.01B = 1,990 - 1,900 = 90

B = 90 / 0.01 = $9,000

A = $18,000

a = $38,000 - $9,000 - $18,000 = $11,000

AAA bonds = $18,000

A  bonds = $11,000

B bonds = $9,000

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Answer and Explanation:

The Journal entry is shown below:-

1. No Journal entry is required

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(Being repayment of advance of water utility fund is recorded)

5. Operating expenses Dr, $296,960

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(Being issue of supplied is recorded)

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(Being the charge of supplies is recorded)

6. Operating expenses of sale and services Dr, $49,400

($15,000 + $16,900 + $17,500)

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            To Accounts payable $58,400

(Being operating expenses is recorded)

7. Cash Dr, $350,000

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          To Due from others $350,000

(Being cash received from general fund is recorded)

8. Accounts Dr,$365,000

          To Cash  $365,000

(Being the payment of accounts payable is recorded)

9. Operating expenses cost of depreciation Dr, $14,600

          To Accumulated Dep - Building $10,000

           To Accumulated Dep - Equipment $4,600

(Being depreciation expenses is recorded)

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          To operating expenses cost of depreciation $14,600

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3 years ago
Which of these statements is true?
DIA [1.3K]
C it’s a good chance
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3 years ago
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Fashion, Inc. had a Retained Earnings balance of $16,000 at December 31, 2021. The company had an average income of $6,500 over
avanturin [10]

Answer:

Total amount of dividends paid over the last three years is $20500

Explanation:

The net income of the company is either retained in the company or paid out as dividends. To calculate the value of the ending retained earnings, we use the following formula,

Ending balance = Beginning balance + Net Income - Dividends

We first need to calculate the total net income for the 3 year period. The total net income for the 3 year period is, 3 * 6500 = $19500

Plugging in the available values for the ending and beginning balance of retained earnings and net income, we can calculate the value of total dividends paid for the three year period.

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4 0
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Mobray Corp. is experiencing rapid growth. Dividends are expected to grow at 24 percent per year during the next three years, 14
White raven [17]

Answer:

$1.25

Explanation:

dividend growth:

year               growth rate        dividends

1                          24%                  Div₁ = 1.24Div₀

2                         24%                  Div₂ = 1.24²Div₀ = 1.5376Div₀

3                         24%                  Div₃ = 1.24³Div₀ = 1.906624Div₀

4                          14%                  Div₄ = 1.906624Div₀ x 1.14 = 2.17355136Div₀

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$86 = 85.48154Div₀

Div₀ = $86 / 85.48154 = $1.006065

Div₁ = 1.24 x $1.006065 = $1.2475 ≈ $1.25

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Answer:

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