A company borrowed cash from the bank and signed a 6-year note at 7% annual interest. The present value for an annuity (series o
1 answer:
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Answer:
Direct Material Price Variance = $300 Favorable
Explanation:
Direct Material Price Variance = (Standard Price - Actual Price) Actual Quantity
Standard Price = $4 per pound
Actual Price = =
Since the actual price is less than the standard price the variance will be favorable as the amount paid for actual use is less then the estimated standard cost.
Thus, direct material price variance = ($4 - $3.8) 1,500
= $300 Favorable
Answer:
2.11%
YTM 0.089142162
YTC 0.068070103
Difference: 0.021072059 = 0.0211 = 2.11%
Explanation:
To calculate each rate we must solve for a rate at which the future coupon payment and maturity (or call value) equals the market price:
This is solve for excel and goal seek tool
It could also be solve with a financial calculator
YTC:
Coupon payment: $ 120
time 5 yeaars
rate 0.068070103 (solved with excel)
PV $494.5766
Maturity: $ 1,050 (call price)
time 5.00
rate 0.068070103
PV 755.42
PV c $494.5766
PV m $755.4235
Total $1,250.0002
YTM:
Cuopon payment: $ 120
time 15 years
rate 0.089142162 (solved with excel)
PV $972.2006
Maturity $ 1,000.00
time 15 years
rate 0.089142162 (solved with excel)
PV 277.80
PV c $972.2006
PV m $277.7995
Total $1,250.0001