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Mariana [72]
3 years ago
6

Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization sch

edule from issuance until maturity:
Date Cash Effective Decrease in Outstanding
interest interest balance balance
1/1/2021 $207,020
6/30/2021 $7,000 $6,211 $789 206,230
12/31/2021 7,000 6,187 813 205,417
6/30/2022 7,000 6,163 837 204,580
12/31/2022 7,000 6,137 863 203,717
6/30/2023 7,000 6,112 888 202,829
12/31/2023 7,000 6,085 915 201,913
6/30/2024 7,000 6,057 943 200,971
12/31/2024 7,000 6,029 971 200,000
What is the annual stated interest rate on the bonds?
a. 3.5%
b. 6%
c. 7%
d. none of the above
Business
1 answer:
Kobotan [32]3 years ago
6 0

Answer:

c. 7%

Explanation:

According to the given scenario, the computation of the annual stated interest rate on the bonds is shown below:-

Sated interest Rate = Cash interest ÷ Face Value of the bond × 2

= $7,000÷ $200,000 × 2

= 7%

Therefore for computing the annual stated interest rate on the bonds we simply applied the above formula. hence the correct option is c

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Choose the correct statement regarding the structure of the plasma membrane. Multiple Choice
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Explanation:

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3 years ago
Select the correct answer from each drop-down menu. What is the basis for the calculation of interest payable by various financi
arlik [135]

Answer:

The interest payable is calculated based on the principal, interest rate, number of years of the loan or of the deposit.

Explanation:

Financial institutions is a company or a firm that deals with financial and monetary activities such as; loans, deposits, investments and currency exchange. Most financial transactions especially loans and savings usually have an interest rate that is set by the financial institution. The amount of interest can be paid by the borrower in a case where an individual takes a loan from the financial institution. Interest can also be paid by the financial institution in a case where the individual or group opens a savings account with the financial institution. In both cases, the interest rate is set by the financial institution. The amount of interest payable can be determined using the formula below;

A=PRT

where;

A=amount of interest payable

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R=interest rate

T=number of years

The interest payable is calculated based on the principal, interest rate, number of years of the loan or of the deposit.

3 0
4 years ago
At a large department store, the number of years of employment for a cashier is a normally distributed variable with a mean of 5
Yakvenalex [24]

Answer:

0.0084

Explanation:

For this probability problem, we will have to make use of the normal probability distribution table.

to use the table, we will have to compute a certain value

z = (x- mean) /Standard deviation

z = \frac{(10 - 5.7)}{1.8} = 2.39

Probability he has worked in the store for over 10 years can be obtained by taking the z value of 2.39 to the normal probability distribution table to read off the values.

<em>To do this, on the  "z" column, we scan down the value 2.3. we then trace that row until we reach the value under the ".09" column. </em>

This gives us 0.99916

Thus we have P (Z < 2.39) = 0.9916

We subtract the value obtained from the table from 1 to get the probability required.

1 - 0.9916 = 0.0084

The Probability that the employee has worked at the store for over 10 years = 0.0084

4 0
3 years ago
Calculate the EBIT for a firm with $4 million total revenues, $3.5 million cost of goods sold, $500,000 depreciation expense, an
Vitek1552 [10]

Answer:

$0

Explanation:

Given that,

Total revenues = $4,000,000

Cost of goods sold = $3,500,000

Depreciation expense = $500,000

Interest expense = $120,000

Earnings before interest and taxes (EBIT):

= Total revenues - Cost of goods sold - Depreciation expense

= $4,000,000 - $3,500,000 - $500,000

= $0

Therefore, the EBIT for a firm is $0.

8 0
3 years ago
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