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miskamm [114]
3 years ago
9

Gabriele Enterprises has bonds on the market making annual payments, with eleven years to maturity, a par value of $1,000, and s

elling for $958. At this price, the bonds yield 6.4 percent. What must the coupon rate be on the bonds
Business
1 answer:
Angelina_Jolie [31]3 years ago
7 0

Coupon rate on the bonds can be calculated in the following way.

Explanation:

To find the coupon rate of the bond. All we need to do is to set up the bond pricing equation and solve for the coupon payment as follows:

 

P = $958 = C(PVIFA₆.₄₀%,11) + $1,000(PVIF₆.₄₀%,11)

 

Solving for the coupon payment, we get:

C = $58.57

 

The coupon payment is the coupon rate times par value. Using this relationship, we get:

Coupon rate = $58.57/$1,000

Coupon rate = .0586, or 5.86%

 

Calculator Solution:

Enter                 11              6.40          ±$958                             $1000

                         N               l/Y              PV                  PMT         FV

                                                                                   $58.57

Coupon rate = $58.57/$1,000

Coupon rate = .0586, or 5.86%

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The Sedgwick Company estimates sales of a new product at 5,000 units and $3.00 per unit. Management feels the sales quantity is
Soloha48 [4]

Answer:

B) $12,825

Explanation:

In order to calculate the worst case scenario of sales first we need to calculate the worst case for sales of units.

The Company estimates that 5,000 units will be sold with a 10 percent plus-or-minus range. So, let calculate the worst case for the sale of units, in this case being 90% of the 5,000 unit estimate. Calculate 90% of 5,000, and this gives us 4,500 units as the worst case scenario.

To calculate the the worst case scenario for price, lets use the $3.00 per unit estimated by the Company, and apply the same concept, however, taking into account that sales price has a 5 percent plus-or minus range. So we caclulate %95 of $3.00, and this gives us $2.85 as our worst case scenario for price.

Now, we take our worst case scenario for amount of units and price:

4,500 units x $2.85 = $12,825

$12,825 is the total dollar amount for the worst case scenario of this product.

5 0
3 years ago
Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $
Sergio039 [100]

Answer:

Option (A) is correct.

Explanation:

Given that,

Implicit costs per week = $200,000

Average explicit cost per banana = $0.25 per banana

Per week bananas sold = 1 million

Explicit cost = Average explicit cost per banana × No. of banana sold

                    = $0.25 × 1,000,000

                    = $250,000

Total revenue = No. of banana sold × Selling price of each banana

                        = 1,000,000 × $0.50

                        = $500,000

Accounting profit = Total revenue - Explicit cost

                             = $500,000 - $250,000

                             = $250,000

Economic profit:

= Total revenue - Explicit cost - Implicit costs

= $500,000 - $250,000 - $200,000

= $50,000

5 0
3 years ago
An economic contraction caused by a shift in aggregate demand causes prices to a. rise in the short run, and rise even more in t
raketka [301]

Answer:

c. fall in the short run, and fall even more in the long run.

Explanation:

The aggregate demand shifts to the left in recession or contractions, in consequence the level of prices falls. For this analysis we consider the shor-run supply curve with a positive slop.

As we know, the economy in the long run tends to equilibrium, where the the production level is fixed and equal to the potential of production of the economy. The initial reduction of prices incentives the consumption in the long run, stabilizing with the long run quantites in a minor level of prices.

In the attached image you can observe the process described previously.

3 0
3 years ago
Compton Company expects the following total sales: Month Sales March $ 20,000 April $ 10,000 May $ 34,000 June $ 15,000 The comp
Shalnov [3]

Answer:

The accounts receivable balance on May 31 is $17850

Explanation:

First we need to determine the amount of credit sales for the month of May. The credit sales for May will be 70% of the total sales for May. Thus, the credit sales for May are,

Credit sales- May = 34000 * 0.7   = $23800

The accounts receivable balance at the end of May will contain the amount due from credit sales that are made in May that are still not collected and will be collected in the next month as per the company's policy.

Accounts receivable at the end of May = 23800 * 0.75 = $17850

8 0
3 years ago
Assume an organization's current service level on order fill is as follows:
frosja888 [35]

Answer:

Answer for the question:

Assume an organization's current service level on order fill is as follows:

Current order fill 80%

Number of orders per year 5,000

Percent of unfilled orders back-ordered 70%

Percent of unfilled orders cancelled 30%

Back order costs per order $150

Lost pretax profit per cancelled order $12,500

a) What is the lost cash flow to the seller at this 80 percent service level?

b) What would be the resulting increase in cash flow if the seller improved order fill to 92 percent

c) If the seller invested $2 million to produce this increased service level, would the investment be justified financially?

d) What is the role of activity-based costing in customer relationship management? In customer segmentation?

is given in the attachment.

Explanation:

Download pdf
7 0
3 years ago
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