The answer would be True.
Answer:
The effect on Morgantown's overall profit is $140,000 decrease in Morgantown's profits
Explanation:
In order to calculate the effect on Morgantown's overall profit we would have to make the following calculations:
Contribution margin per unit for Lock Division = Selling price – Variable costs = $40 - $22 = $18
Contribution lost by lock division if Cabinet division buys from outside = $18 * 10,000 = $180,000
Cost per unit saved by Cabinet division = $40 - $36 = $4
Total cost saved by cabinet division = $4 * 10,000 = $40,000
Net decrease in profit = Contribution lost – Cost saved = $180,000 - $40,000 = $140,000
Therefore, the effect on Morgantown's overall profit is $140,000 decrease in Morgantown's profits.
Answer:
8.60%
Explanation:
Face value of the bond = $1000
Years = 10 years (12-2). Semiannual number of periods = 20 (10*2)
Semiannual coupon rate = 9.2%/2 = 0.046
Semiannual coupon payment amount = 0.046*1000 = 46
Present value = 1000*104% = $1040
<em>Value of YTM can be derived using Ms excel </em>
Yield to maturity = YTM (No of periods, Payments, Present value, Face value) * 2
Yield to maturity = YTM (20, 46, 1040, 1000) * 2
Yield to maturity = 4.30% * 2
Yield to maturity = 8.60%