Answer:
$4,238.05
Explanation:
The computation of the present value is shown below:
Years Cash flows Discount factor @7% Present value
1 $850.00 0.9345794393 $794.39
2 $1,190.00 0.8734387283 $1,039.39
3 $1,450.00 0.8162978769 $1,183.63
4 $1,600.00 0.762895212 $1,220.63
Total present value $4,238.05
The total quantity of demand for all finished products and services generated in an economy is measured as aggregate demand. Hence option C is correct.
<h3>What is aggregate demand ? </h3>
The total amount of money spent on those goods and services at a particular price level and time is known as aggregate demand.
A macroeconomic concept known as "aggregate demand" refers to the total demand for products and services during a specific time period at any given price level.
Since the two indicators are calculated in the same way, aggregate demand is equal to GDP over the long run. Aggregate demand is the desire or demand for those products, whereas GDP is the total amount of goods and services produced in an economy.
Learn more about aggregate demand here
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Answer:
The value of the bond which is the current price is $ 830.16
Explanation:
It is very vital to note that a rational investor values a bond today based on the cash flows payable by the bonds in future discounted to today's terms.
The future cash flows comprise of the yearly coupon interest of $60(6% *$1000) for 10 years as well as the repayment of the principal $1000 at the end of year 10
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity,r is 8.6% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading to $ 830.16 present value today.
It is expected that the bond would be issued at discount as yield to maturity is higher than annual interest.
Ending capital for the month = The month's beginning capital + Additional capital inflow for the month - additional capital outflow for the month
For example: if had $500 at the beginning of a month, you got a dividend of $100 during the month and also spend $50 on entertainment during the month, the ending capital would be 500 + 100 -50 = $550
Answer:
Option (A) is correct.
Explanation:
Return on investment = (operating profit ÷ Invested capital) × 100
= ($171 million ÷ $610 million) × 100
= 0.28 × 100
= 28%
Residual income:
= operating profit - (Invested capital × Imputed interest rate)
= $171 - ($610 ×20%)
= $171 - $122
= $49 million
Therefore, Trailer’s return on investment (ROI) and residual income is 28% and $49 million, respectively.
