Lawrence has set a personal goal of being president of LMN Corp. by the time he is 30. He has determined that nothing will stand
1 answer:
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The value of the second $1,000 payment is worth $ 952.38
The net present value is given by the expression as shown below:
Plugging the values in the above expression,
Future value =$1,000
r=0.05
n=1
The value of the second $1,000 payment is worth $ 952.38
<h3>What Is Net Present Value (NPV)?</h3>Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project. NPV is the result of calculations used to find today’s value of a future stream of payments.
Net Present Value (NPV) Formula:
where:
=Net cash inflow-outflows during a single period
i =Discount rate or return that could be earned in alternative investments.
t=Number of timer periods
Learn more about NPV on:
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Answer:
Portfolio Beta = 1.2815
Explanation:
given data
market value = $3,000,000
portfolio beta = 1.6
sells = 25
times index = $10
currently trading = 15379
to find out
anticipates that this hedge will reduce the portfolio beta to
solution
we get number of contract to sell is here
number of contract to sell = Portfolio Beta × ......................1
put here value we get
25 = Portfolio Beta ×
solve it we get
Portfolio Beta = 1.2815
Answer and Explanation:
The Journal entry is shown below:-
1. Cash Dr, $15,000,000
To Bonds payable $15,000,000
(Being issue of bonds is recorded)
2. Interest expense on bonds Dr, $675,000
To cash $675,000 ($15,000,000 × 9% × 6 ÷ 12)
(Being payment of interest is recorded)
3. Bonds payable Dr, $15,000,000
To Gain on redemption of bonds $600,000
To Cash ($15,000,000 × 0.96) $14,400,000
(Being redemption on bonds is recorded)
