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torisob [31]
3 years ago
7

Roadside Markets has a 6.75 percent coupon bond outstanding that matures in 10.5 years. The bond pays interest semiannually. Wha

t is the market price per bond if the face value is $1,000 and the yield to maturity is 7.2 percent
Business
2 answers:
Alexandra [31]3 years ago
4 0

Answer:

$967.24

Explanation:

In order to determine the price of the bond we must determine its present value:

  • future value = $1,000
  • discount rate = 7.2% / 2 = 3.6%
  • n = 10.5 years x 2 = 21 periods
  • 20 cash flows of $67.50 / 2 = $33.75
  • 1 final cash flow of $1,033.75

I like to use an excel spreadsheet because it generally is more exact that annuity tables, so I'll use the NPV function:

=NPV(3.6%, 33.75 ⇔ 20 times ... 1033.75) = $967.24

The current market price of the bond sis $967.24

NemiM [27]3 years ago
3 0

Answer:

Explanation:

Answer:

The market price per bond is $967.24

Explanation:

Data Given;

present  value  = $1,000

Yield to maturity = 7.2%

number of years (t) = 10.5

semiannual (n) = 2

The present value is calculated using an excel sheet.

The manual calculation is given as

PV = Fv/(1+i/n)^nt

where i is the interest rate, t is the number of years and n is the period of interest

Subsituting into the formula, we have

PV = 1000/(1+0.072/2)^2*10.5

     = 1000/1.0338

       = $967.24

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Explanation:

In order to calculate the variable cost per unit sold we would have to use the following formula:

Total variable cost per unit=(Direct materials+Direct labor+Variable manufacturing overheads+Sales commissions+Variable adminsitrative expenses)

Therefore,Total variable cost per unit=$7.10+$4.00+$2.00+$1.25+$0.50

Total variable cost per unit=$14.85

The variable cost per unit sold is closest to $14.85

6 0
3 years ago
To evaluate the size of the federal budget deficit or surplus over time, it would be best to look at the?
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6 0
1 year ago
The ______ perspective views cultural systems by examining various components (natural environment, history, economics, etc.). A
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Holistic perspective

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Monica has $500 to spend and wants to buy either a new snowboard or a new laptop. both the snowboard and the laptop cost around
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The LaPann Corporation has obtained the following sales forecast data: July August September October Cash sales $ 80,000 $ 70,00
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Answer:

1. 166,000

2. 188,000

Explanation:

The budgeted accounts receivable balance on September 30  and Budgeted cash receipts for october n be calculated as follows

July

Opening                          -

Credit sales                 240,000

Collection

20% of July                 48,000

Closing                      192,000

August

Opening                       192,000

Credit sales                 220,000

Total                             412,000

Collection

20% of August             44,000

70% of July                  168,000

Total receipts              208,000

Closing                         200,000

September

Opening                         200,000

Credit sales                    180,000

Total                               380,000

Collection

20% of september          36,000

70% of august                  154,000

10% of july                        24,000

Total receipts                  214,000

Closing                             166,000

October

Opening                         166,000

Credit sales                   200,000

Total                               366,000

Collection

20% of October               40,000

70% of september           126,000

10% of august                   22,000

Total receipt                     188,000

Closing                             178,000

8 0
3 years ago
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