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3 years ago

Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you $6,400 per year for 5 years.

Business

1 answer:

Elanso [62]3 years ago

5 0

Answer:

Instructions are below.

Explanation:

Giving the following information:

Investment X offers to pay you $4,700 per year for 9 years

Investment Y offers to pay you $6,400 per year for 5 years.

Requirement 1:

First, we need to calculate the final value, using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual cash flow

Investment X:

FV= {4,700*[(1.08^9)-1]} / 0.08

FV= $58,691.52

Investment Y:

FV= {6,400*[(1.08^5)-1]} / 0.08

FV= $37,546.25

Now, the present value:

PV= FV/(1+i)^n

Investment X:

PV= 58,691.52/(1.08^9)

PV= $29,360.37

Investment Y:

PV= 37,546.25/(1.08^5)

PV= $25,553.35

Investment X provides the higher present value, therefore, it should be the one to choose.

Requirement 2:

First, we need to calculate the final value, using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual cash flow

Investment X:

FV= {4,700*[(1.20^9)-1]} / 0.20

FV= $97,754.84

Investment Y:

FV= {6,400*[(1.20^5)-1]} / 0.20

FV= $47,626.24

Now, the present value:

PV= FV/(1+i)^n

Investment X:

PV= 97,754.84/(1.20^9)

PV= $18,945.54

Investment Y:

PV= 47,626.24/(1.20^5)

PV= $19,139.92

Investment Y provides the higher present value, therefore, it should be the one to choose.

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Exchanged all of the securities for shares of preferred stock, which were not mandatorily redeemable. Market values at the date

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Answer:

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Date General Journal Entry Debit Credit

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3 years ago

When the interest rate is above the equilibrium level, a. the quantity of money that people want to hold is less than the quanti

kkurt [141]

Answer:

Explanation:

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Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should tak

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Answer:

Total Overhead Variance $156750 Favorable

Explanation:

Given Data

Byrd Company

Normal production capacity 100,000 units per year

Direct Labor Hours at normal capacity = 100,000

Total budgeted overhead at normal capacity is $1,100,000

Variable costs $400,000

Fixed costs$700,000

Actual Production 71,800 putters

Actual Direct Labor Hours 99,000

Actual Variable Overheads $ 197450

Actual Fixed Overhead Costs $ 734,800

Formulae And Calculations

Predetermined Variable Overhead Rate = Variable Costs / Direct Labor Hours

Predetermined Variable Overhead Rate = $400,000 / $100,000 = $ 4 per hour

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=$700,000 / $100,000 = $ 7 per hour

Applied Overhead = Applied Variable Costs + Applied Fixed Costs

= $ 4*99,000+ $ 7 *99,000= $ 396,000 + $ 693,000=

Applied Overhead =$ 1089,000

Total Overhead Variance = Actual Overhead - Overhead Applied

Total Overhead Variance =$ 197450+ $ 734,800-$ 1089,000

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3 years ago

What is the yield to maturity on a bond that pays annual coupon rate of 14%, has a par value of $1,000, matures in 10 years, and

max2010maxim [7]

Answer:

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Explanation:

The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond

The yield on the bond can be determined as follows using the formula below:

YM = C + F-P/n) ÷ 1/2 (F+P)

YM-Yield to maturity-

C- annual coupon

F- Face Value

P- Current Price

n- number of years

DATA

Coupon = coupon rate × Nominal value = 1,000 × 14%=140

Face Value = 1000

YM-?, C- 140, Face Value - 1,000, P-911 , n- 10

YM = (140 + (1000-911)/10) ÷ ( 1/2× (1000 + 911) )

YM = 0.156 × 100 = 15.6%

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Answer:

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