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Sergeu [11.5K]
3 years ago
13

Bill Mitselfik has purchased a bond that was issued by Acme Chemical. This bond has a face value of $1,000 and pays a dividend o

f 8% per year, compounded semi-annually. Bill bought the bond three years ago at face value and there are seven years remaining until the bond matures. Bill wishes to sell it now for a price that will result in Bill earning an annual yield of 10% compounded semi-annually. What price does Bill need to sell the bond for to earn his desired return

Business
1 answer:
kramer3 years ago
7 0

Answer:

$1,068.02

Explanation:

For computing the selling price of the bond we need to use the Future value formula or function i.e to be shown in the attachment below:

Given that,  

Present value = $1,000

Rate of interest = 10% ÷ 2 = 5%

NPER = 3 years × 2 = 6 years

PMT = $1,000 × 8% ÷ 2 = $40

The formula is shown below:

= FV(Rate;NPER;PMT;-PV;type)

The present value comes in negative

So, after applying the above formula, the selling price of the bond is $1,068.02

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Answer:

a.Geographic and political barriers are irrelevant to the company's business decisions.

Explanation:

It has established its global operations and a good reputation as a global food manufacturer.

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3 years ago
Which of the following statements is TRUE of payback​ period? A. If the payback period is greater than the maximum acceptable pa
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Answer:B. If the payback period is less than the maximum acceptable payback​ period, accept the project.

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The payback period measures if a capital investment is profitable.

The payback period measures how long it takes to recover the amount invested in a capital project. It calculates how long it takes for the cash flows generated from a capital project to be equal to the cost.

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If the company has a maximum acceptable payback period of 4 years, then the company would take on the project because its payback period is less than the maximum acceptable payback period.

7 0
3 years ago
Why private limited companies in malaysia does not get listed in the stock exchange?​
lbvjy [14]

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3 years ago
Hardin Company received $120,000 in cash and a used computer with a fair value of $360,000 from Page Corporation for Hardin Comp
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Answer:

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Explanation:

The computation of the gain on the exchange is shown below:

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For computing the gain we simply added the fair value and deduct the undepreciated cost of an existing computer in the cash received amount so that the accurate amount can come.  

All other information which is given is not relevant. Hence, ignored it

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