Explanation:
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If the bond's valuation is lower than the market price, you should buy it because the bond is undervalued. Additionally, the bond is overvalued and should be sold if the market price is lower than the bond price.
<h3>What is the formula for YTM?</h3>
The total rate of return that a bondholder anticipates earning if the bond is held until maturity is referred to as YTM in the context of bonds. A single Bond's YTM formula is as follows:[Annual Interest plus [(FV-Price)/Maturity]] / [(FV + Price)/2] is the yield to maturity.
<h3>What is the acronym YTM?</h3>
yield to maturity (YTM) is an estimate of a portfolio's return. It accepts that the purchaser of the security will hold it until its development date, and will reinvest each premium installment at a similar financing cost. As a result, the coupon rate is taken into account when calculating yield to maturity. The redemption yield is another name for YTM.
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Answer:
1. The act of reducing taxes by deliberately understating income or overstating deductions is called ______
Tax evasion
2. Leaving the tip earnings out of her income on her tax returns is
Tax evasion
Explanation:
Tax evasion is deliberate reduction of gross income either by excluding, understating, omitting income, or overstating deductions. It is not legal. Tax avoidance is managing taxable income by effective tax planning (e.g. through investments, insurance, etc.) so that less tax is paid. It is legal and allowed.
Answer: A target price for farm crops is an example of price floor because it’s fixed ahead of harvests with the interest of farmers in mind.
Explanation: A quick definition of both concepts would be of help. A price floor is usually fixed by government legislation and it ensures that the price of a commodity or service does not fall below a certain minimum. In the case of farm crops, a floor price makes sure that the farmers are guaranteed a level of profit in case there is poor harvest for any reason whatsoever. The price floor must be fixed above the equilibrium price for this to be effective.
A target price is an expectation of the future price of commodities or services, and hence prices are fixed ahead of the harvest in the case of farm crops. This is so because as explained earlier, future conditions might change and become unfavorable, therefore making the current market price unprofitable for farmers. If for example, a sack of potatoes currently sells for $30, the government may fix the price floor ahead of the harvest season at $45 per sack. This implies that after harvesting farmers can still sell at $30. However if the harvest turns out to be bad perhaps due to natural disasters, pests or fungal attacks, etc, then the farmers can go ahead and sell at $45 and possibly higher. No farmer is allowed to sell below $45 (since that is the ‘floor’). That way, farmers would still have some profit guaranteed and would be encouraged to remain in the farming business.
Answer:
Target cost per unit= $2.64
Explanation:
The target cost is arrived at by subtracting the a desired profit margin from a competitive selling price.
The target cost per unit =
((selling price × qty) - (cost of capital(%) × initial cost))/No of units
=( (3× 1,000,000) - (18%×2,000,000) )/ 1,000,000
= 2.64
Target cost per unit= $2.64