1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Yakvenalex [24]
3 years ago
8

The bond market requires a return of 7.5 percent on the 3-year bonds issued by Beck Co. The 7.5 percent is referred to as the: A

) coupon rate. B) face rate. C) call rate. D) yield to maturity. E) current yield.
Business
1 answer:
mr Goodwill [35]3 years ago
4 0

Answer:

The correct answer is letter "D": yield to maturity.

Explanation:

Yield to Maturity or YTM refers to the required market interest rate bonds posses. YTM represents the anticipated return investors could obtain in case they hold the bond until maturity. YTM is expressed as an annual rate and it is calculated using the following formula:

YTM = \sqrt[n]{\frac{Face Value}{Current Price}} - 1

where:

  • n = <em>number of years to maturity</em>
  • Face Value = <em>maturity value of the bond</em>
  • Current Price = <em>price of the bond today</em>
You might be interested in
Drake enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment m
nexus9112 [7]

Answer:

The answer is: be able to recover damages

Explanation:

In order for a Drake (the plaintiff) to be able to recover damages he must prove that he suffered an injury (economic injury in this case) by Eve's false claims.

Eve promised to multiply Drake's money and instead Drake lost money. The proof of injury would be the money lost by trading with Eve's false algorithm.

4 0
3 years ago
What are the four requirement of valid contract
timurjin [86]

Four requirements for a valid contract are an offer, acceptance by the other party of the offer, a mutual agreement or meeting of the minds of the contracting parties and a valid consideration.

3 0
3 years ago
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $940,000,
Tanya [424]

Answer:

a. Year 0 Net Cash Flows = $984,000

b. We have:

Year 1 net operating cash flows = $306,159

Year 2 net operating cash flows = $332,986

Year 3 net operating cash flows = $261,479

c. Additional Year 3- cash flow = $504,877

d. The machine should be purchased.

Explanation:

We start by first calculating the following:

Initial Investment = Base Price + Modification Cost = $940,000 + $25,000 = $965,000

Useful Life = 3 years

Depreciation in Year 1 = 0.3333 * $965,000 = $321,634.50

Depreciation in Year 2 = 0.4445 * $965,000 = $428,942.50

Depreciation in Year 3 = 0.1481 * $965,000 = $142,916.50

Book Value at the end of Year 3 = $965,000 - $321,634.50 - $428,942.50 - $142,916.50 = $71,506.50

After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) * Marginal tax rate = $624,000 – ($624,000 - $71,506.50) * 25% = $485,877

Initial Investment in NWC = $19,000

We can now proceed as follows:

a. What is the Year 0 net cash flow?

Year 0 Net Cash Flows = Initial Investment + Initial Investment in NWC = $965,000 + $19,000 = $984,000

b. What are the net operating cash flows in Years 1, 2, 3?

Year 1 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 1) = ($301,000 * (1 – 0.25)) + (0.25 * $321,634.50) = $306,159

Year 2 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 2) = ($301,000 * (1 – 0.25)) + (0.25 * $428,942.50) = $332,986

Year 3 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 3) = ($301,000 * (1 – 0.25)) + (0.25 * $142,916.50) = $261,479

c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?

Additional Year 3- cash flow = NWC recovered + After-tax Salvage Value = $19,000 + $485,877 = $504,877

d. If the project's cost of capital is 12%, should the machine be purchased?

This can be determined from the net present value (NPV) calculated as follows:

NPV = -$984,000 + ($306,159/1.12^1) + ($332,986/1.12^2) + ($261,479/1.12^3) + ($504,877/1.12^3) = $100,287.71

Since the NPV of the machine of $100,287.71 is positive, the machine should be purchased.

7 0
2 years ago
Why is it important to be held accountable for your actions?<br> 3 sentences
marissa [1.9K]
Accountability eliminates the time and effort you spend on distracting activities and other unproductive behavior. When you make people accountable for their actions, you're effectively teaching them to value their work. When done right, accountability can increase your team members' skills and confidence.
7 0
2 years ago
Faith went to the grocery store to buy apples. if each apple cost $0.78, and she spent a total of $4.68, how many apples did fai
nirvana33 [79]

Faith bought 6 apples at $.78 each. She paid $4.68 for the apples.


Given : $.78 price for each apple

$4.68 the amount Faith spent for the apples.


$4.68 / $.78 = 6

4 0
3 years ago
Other questions:
  • The human resource management discipline that covers all of the things that need to happen to get people interested in working f
    11·2 answers
  • Additional fees that are paid when finalizing a home purchase are also known as _____.
    10·2 answers
  • Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams est
    9·1 answer
  • Vessels Corporation's net income for the most recent year was $2,532,000. A total of 200,000 shares of common stock and 200,000
    14·1 answer
  • Tamarisk, Inc. sells merchandise on account for $7400 to Cheyenne Corp. with credit terms of 2/15, n/30. Cheyenne Corp. returns
    13·2 answers
  • Productivity at the Michigan branch of Brite Paper Manufacturing has decreased significantly over the last twelve months. Aiden,
    7·1 answer
  • An organization may convert from an old system to a new system by choosing to run both the old and new systems at the same time
    8·2 answers
  • A monthly fixed rate mortgage payment
    9·1 answer
  • Garage Magic, Inc., contracts for the sale of a certain number of garage door openers to Home &amp; Yard Hardware stores. Ian bu
    10·1 answer
  • Suppose sweden produces only tablets and smartphones. The resources that are used in the production of these two goods are not s
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!