<span>The coupon rate of the sunshine mining bonds is 7.29%. Coupon rate is figured by dividing the par value ($1302.50) by the annual interest (yield). If the face value of the bond was only given as well as the annual interest, the coupon rate of the bond would be 9.5%.</span>
Answer:
Explanation:
Given that :
Project A will produce annual cash flows of $42,000 at the beginning of each year for eight years.
Project B will produce cash flows of $48,000 at the end of each year for seven years.
Return rate = 12% = 0.12
a) Which project should the company select and why?
To determine the project which the company should select; let find the PV of cash flow:
For project A; PV of cash flows at the beginning of the each year is determined with the use of the expression:
PV = $233,677.77
For project B , the PV of cash flows at the end of the each year is determined with the use of the expression:
PV = $219,060.31
Hence, the company should select project A due to the fact that the cashflow is higher.
b) Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year?
Given that : the new interest rate = 14%;
then :
PV of cahflow for project A is:
PV = $222,108.80
PV cashflow for project B is:
PV = $ 234656.04
Here, PV of Cash flow is greater in project B, As such it is best for the company to select Project B
Answer:
multifactor productivity = 8.3%
Explanation:
given data
Total cost for chemicals = $10
Total cost of labor = $40
Total cost of misc = $5
use of chemical = 50%
solution
first we get here total initial cost that is
total initial cost = 10 + 40 + 5
total initial cost = $55
and
Increase in cost of chemical is = 10 + (0.5) × (10)
Increase in cost of chemical = 15
so Total increase in cost will be
Total increase in cost = $15 + $40 + $5
Total increase in cost = 60
so
increase in cost % = × 100
increase in cost % = × 100
increase in cost % = 91.67 %
so
change in multifactor productivity is = 100% - 91.7%
multifactor productivity = 8.3%
The answer is marginal revenue (MR) curve above $22.
Explanation:
Jim and Lisa Groomers will maximize its accounting profit when taking it to 0 its economic profits when marginal revenue = marginal costs.
Economic profits are not the same as accounting profits because they include the opportunity costs of investing the money somewhere else. That is whythe long run firm is not able to make economic profits since as they exist, new competitors will enter the market. But in the case of the shoert run, the firms are able to make economic profit, but by doing so, they cannot maximize their accounting profit.
Economic profit = account profit = Opportunity profit
Opportunity cost are extra costs or benefitslost from choosing one activity or investment over another one.
Ans is c.ii and iii
The conversion ratio is established when the bond is issued, and is: par value divided by the conversion price. In this case, the conversion price is set at $40 per share, so the conversion ratio is $1,000 par / $40 conversion price = 25:1 (25 shares per bond). If the bond moves to a 10 point premium over par, its new price will be 110, or $1,100 per bond. For the common stock to be valued at parity to the bond, the price per share must be $1,100 / 25 shares per bond = $44 per share parity price.