Answer:
5.75%
Explanation:
The computation of the yield on a bond with three years to maturity is shown below:
Given that
Yield on a one-year bond is 3%
The expected yield on one-year bonds for the next two years is 5% and 4%
And, the liquidity premium is 1.75%
So, the yield on a bond with three years to maturity is
= (3% + 5% + 4%) ÷ 3 years + 1.75%
= 4% + 1.75%
= 5.75%
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Answer:
b) A decrease in ownership percentage from 25% to 15%
Explanation:
There is change in accounting method when the shareholding is 20% or more.
Under Consolidation there are two methods:
Equity method: This is used when the shareholding is 20% or more, and there is significant influence. Under this method all the assets and liabilities are accumulated in the consolidated balance sheet.
Proportional Consolidation method: This is generally used when the shareholding is merely shown as an investment, and the balances of assets and liabilities are not accumulated.
Thus, there is a change in method of accounting when the shareholding is more than 20%. This is in case b as change is from 25% to 15% and thus, it will change from equity method to proportional consolidation method.
Answer:
(i) and (iv)
Explanation:
The appreciable cost is the cost in which the assets can be depreciation over the useful life
And, the appreciable cost is come after deducting the salvage value from the acquisition cost
The formula to compute the depreciation expense using the straight-line method is shown below:
= (Original cost - salvage value) ÷ (useful life)
So it can be calculated after considering the first and four options
Answer:
The amount incurred by Charles division in the direct fixed cost is $20,250
Explanation:
The computation of the amount incurred in the direct fixed cost is shown below:
Direct fixed cost is
= Charled fixed cost - common fixed cost ÷ 2
= $170,700 - ($300,900) ÷ 2
= $170,700 - $150,450
= $20,250
hence, the amount incurred by Charles division in the direct fixed cost is $20,250
We simply applied the above formula so that the correct value could come
And, the same is to be considered
