Answer:
$79,208.48
Explanation:
The computation of the current price of the bond is shown below:-
<u>Number of Cash flow PV annuity factor Discounted cash </u>
<u>years flow</u>
1 -10 years $1,000 8.3166 $8,316.6
10 years $100,000 0.7089188 $70,891.88
Current price of the bond $79,208.48
Refer to the PV annuity factor so that we get to know the discounting factor value.
Answer:
Karns Company
Perpetual inventory system
1) Merchandise Inventory $174,000 Dr.
Account Payable $ 174,000 Cr
Karns Company purchased merchandise on account from Bailey Office Suppliers for $ 174.000, with terms of 2/10, n/30
2) Account Payable $ 6,800 Dr.
Merchandise Inventory $ 6,800 Cr.
Karns returned some merchandise and paid S1S6.800 as payment in full
Answer: Covered Call
When a person holds a stock and writes (sells) calls on the same stock, the strategy is known as a covered call.
A person can opt for this strategy if he has a neutral view on the stock, but wants to generate an income stream by receiving premiums by writing the call option.
The risk involved in this strategy occurs when the stock price moves above the strike price. In this scenario, the covered call writer has to deliver the shares when the call is exercised. He doesn’t benefit from an increase in price.
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