When a customer purchases a product but is not yet ready for delivery, this is referred to as?

Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.50 percent, a par value of $1,000 pe

katrin [286]

Answer:

2.9652%

Explanation:

to determine the cost of debt we must use the FMV of the bonds plus the YTM:

first bond:

FMV = 1.09 x $1,000 = $1,090 x 3,600 bonds = $3,924,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {17.5 + [(1000 - 1090)/16]} / [(1000 + 1090)/2] = (17.5 - 5.625) / 1045 = 1.136% x 2 = 2.27% annual

second bond:

FMV = 0.95 x $2,000 = $1,900 x 3,950 bonds = $7,505,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {59.4 + [(2000 - 1900)/42]} / [(2000 + 1900)/2] = (59.4 + 2.38) / 1950 = 3.168% x 2 = 6.34% annual

total debt = $3,924,000 + $7,505,000 = $11,429,000

weighted average after tax cost of debt:

{($3,924,000/$11,429,000 x 2.27%) + ($7,505,000/$11,429,000 x 6.34%)} x (1 - 0.40) = (0.779% + 4.163%) x 0.6 = 4.942% x 0.6 = 2.9652%

6 0

4 years ago

Carlos opens a dry cleaning store during the year. He invests $30,000 of his own money and borrows $60,000 from a local bank. He

kvv77 [185]

Answer:

$30,000

$6,000

Explanation:

Carlos risk = $30,000

Carlos risk of $30,000 is the amount of funds which he had invested in the course of his business which is why Carlos is not considered at-risk for the nonrecourse loan reason been that carlos is not found liable because the loan was not used in the business which makes him to have a risk of $30,000.

$24,000 loss that occured will reduces Carlos’ amount at-risk to $6,000

($30,000 - $24,000)

=$6,000

5 0

3 years ago

A profit-maximizing firm will not employ an additional unit of a resource if the marginal product of that unit is greater than t

Lubov Fominskaja [6]

Answer:

The Answer is A) True

Explanation:

The marginal cost of production and marginal revenue are economic measures used to determine the amount of output and the price per unit of a product that will maximize profits. A rational company always seeks to optimize its profit, and the relationship between marginal revenue and the marginal cost of production helps to find the point at which this occurs. The point at which marginal revenue equals marginal cost maximizes a company's profit.

Cheers!

4 0

3 years ago

World Grocer sells high-quality products and grocery items that are unique to its highly populated area; in addition, it offers

Rzqust [24]

Answer:

<u>Focused-differentiation.</u>

Explanation:

A focused differentiation strategy is a strategy used by organizations to reach a group of customers through the marketing of differentiated products and services that provide added benefits to the consumer.

This strategy is characterized by the combination of the business strategies developed by <em>Porter</em>, which are:

Cost leadership
Differentiation and
Focus.

The greatest benefits added to this strategy are the increase in consumer loyalty, since offering targeted and differentiated services guarantees the improvement of service, quality and increase of the company's reputation.

There is also the possibility of increasing profits, due to the sale of differentiated and exclusive products, which may have a higher purchase and sale value.

8 0

3 years ago

Spice asks Meyers about how a fixed-income manager would position his portfolio to capitalize on expectations of increasing inte

Artist 52 [7]

Answer:

a. Shorten his portfolio duration

Explanation:

The best action to take in order to capitalize on expectations of increasing interest rates would be to shorten his portfolio duration. This is because an increase in the interest rate causes his portfolio value to decrease, yet if the duration of his portfolio is shortened then the change/decrease in value will be lesser than if done otherwise.

4 0

3 years ago