Answer:
HPR = 0.371%
Explanation:
we must first determine the price of the bond in 1 year:
present value of face value = $1,000 / (1 + 6.25%)⁶ = $695.07
present value of coupon payments = $52.50 x 4.87894 (PV annuity factor, 6.25%, 6 periods) = $256.14
market price in 1 year = $951.21
since you bought the bond at face value (market value = YTM), the the holding period return is:
HPR = [(ending price - actual price) + dividends received] / actual price
HPR = [($951.21 - $1,000) + $52.50] / $1,000 = $3.71 / $1,000 = 0.371%
Answer:
The correct answer is B. Help offset changes in GDP.
Explanation:
In addition to the discretionary fiscal policies, through which the authorities actively decide to adjust spending or income in response to changes in the economic cycle, the variations that occur in these items must be taken into account without the need for governments Make new decisions. In the latter case, the changes respond to the role of automatic stabilizers.
Automatic stabilizers are those items of public budgets that are automatically altered, hence their denomination, as a result of changes in the level of economic activity. On the income side, it is worth pointing out the main stabilizers are the taxes that tax corporate profits, the income of workers or the consumption of goods and services; On the expense side, unemployment benefits, which support the income of families in times of increased unemployment, are one of the most relevant stabilizers.
Answer:
$9,600,000
Explanation:
The computation of the projected operating cash flow is given below:
= EBIT × (1 - tax rate) + depreciation expense
where
EBIT should be
= $20,000,000 - $8,000,000 - $6,000,000
= $6,000,000
Now the operating cash flow should be
= $6,000,000 × (1 - 0.40) + $6,000,000
= $3,600,000 + $6,000,000
= $9,600,000
Answer:
Price variance will be $4512.5 ( Unfavorable )
Explanation:
We have given standard material cost per yard = $2
Actual material cost per yard = $2.10
Standard yards per unit = 4.5
And actual yards per unit = 4.75
Units of production = 9500
Total number of actual quantity used = 9500×4.75 = 45125
So direct material price variance = ( standard price - actual price ) × actual quantity used = ( $2 - $2.1 ) × 45125 = -$4512.5
So price variance will be $4512.5 ( Unfavorable )
