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adell [148]
3 years ago
9

There are zero coupon bonds outstanding that have a YTM of 5.97 percent and mature in 19 years. The bonds have a par value of $1

0,000. If we assume semiannual compounding, what is the price of the bonds
Business
1 answer:
Fed [463]3 years ago
8 0

Answer:

market price = $1,104.20

Explanation:

yield to maturity of zero coupon bonds = (face value / market price)¹/ⁿ - 1

  • YTM = 5.97%
  • n = 19 x 2 = 38
  • face value = $10,000

(face value / market price)¹/ⁿ = YTM + 1

face value / market price = (YTM + 1)ⁿ

market price = face value / (YTM + 1)ⁿ

market price = $10,000 / 1.0597³⁸ = $10,000 / 9.0563 = $1,104.20

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A customer has submitted a claim to have his cell phone replaced at no charge. However, the customer’s warranty expired 11 month
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Answer:

(I)

b. Use the reasons-before-refusal plan.

(II)

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b. Disclose all reasons for the refusal.

d. Provide alternatives that encourage the customer to continue business with you.

Explanation:

  • In the first case, the best strategy to adopt is that of presenting the "reasons-before-refusal" plan. This means that before conveying a negative message to the client, you explain the reasons of why this message necessarily has to be like that. By reading the reasons first, the customer will be more likely to agree with your assessment of the situation.
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3 years ago
a1. Lobo Company purchased equipment for $40,000 with a useful life of five years and no expected salvage value. Prepare the adj
Pavel [41]

Answer:

a1. Dr Depreciation Expense $8,000

Cr Accumulated Depreciation $8,000

a2. $24,000

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Dr Wages Expenses $440

Cr Wages payable $440

Explanation:

a1. Preparation of the adjusting entry for the first year using the straight-line depreciation method.

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Cr Accumulated Depreciation $8,000

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a2. Computation of the book value at the end of the second year of the equipment's life.

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Second step is to calculate the Second year Book value

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Second year Book value=$16,000

Now let compute the book value at the end of the second year of the equipment's life.

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Book value at the end of the second year=$24,000

Therefore the Book value at the end of the second year will be $24,000

b1. Preparation of the adjusting entry on December 31

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Cr Wages payable $440

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