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3 years ago

If current market interest rates rise, what will happen to the value of outstanding bonds?

Business

1 answer:

Flauer [41]3 years ago

3 0

Answer:

The correct answer is 4. If current market interest rates rise, the value of outstanding bonds will fall.

Explanation:

The economics of financial investment of bonds indicates that if the value of the interest rate rises, said rise implies a virtual increase in the risk of the bond, that is, it pays more interest because it is more risky to invest in it.

Therefore, in the event of an interest increase, the price of the bonds will fall. On the contrary, a lower interest rate infers a greater security of the financial asset, with which the lower the interest rate, the higher the value of the bond.

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Wright Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs. The carrying va

Nady [450]

Answer:

the total amount owed to general unsecured creditors is $71,000

Explanation:

The computation of the total amount owed to general unsecured creditors is shown below:

= Account payable + wages payable + taxes payable + interest on note payable + interest on bond payable

= $40,000 + $6,000 + $12,000 + $5,000 + $8,000

= $71,000

hence, the total amount owed to general unsecured creditors is $71,000

The same is to be considered

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2 years ago

What are two things you need to maintain if you assist a person with banking and bill paying?

Anton [14]

Answer:

transaction record and a reconciliation of the transactions

An adequate bank balance and a budget.

Legal guardianship of the person and power of attorney

Your documentation as payee for the person you support and the bankbook

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3 years ago

On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had

erma4kov [3.2K]

Answer:

$378,756

Explanation;

The net present value of land will be =$450,000/1.09^2=$378,756

The land will be recorded in net present value of land by discounting the cost of land with interest rate of buying from the bank.

4 0

2 years ago

Sunland Company compiled the following financial information as of December 31, 2017: Service revenue $842000 Common stock 17700

posledela

Answer:

555,000

Explanation:

Sunlad assets on December 31 2017 can be calculated as follows

= equipment + cash + supplies + account receivables

= 229,000 + 203,000 + 33,000+ 90,000

= 555,000

Hence Sunland total assets in December 31 2017 is 555,000

7 0

3 years ago

Read 2 more answers

Cox Electric makes electronic components and has estimated the following for a new design of one of its products:

vfiekz [6]

Answer:

a) attached below

b) P( profit ) = TR(q) - TC(q)

c) attached below

d) -$5000 ( loss )

Explanation:

Given data:

Fixed Cost = $10,000

Material cost per unit = $0.15

Labor cost per unit = $0.10

Revenue per unit = $0.65

a) Influence diagram to calculate profit

attached below

b) derive a mathematical model for calculating profit.

VC = variable cost per unit , LC = per unit labor cost , MC = per unit marginal cost, TC = Total cost of manufacturing , FC = Fixed cost, q = quantity, TR = Total revenue, R = revenue per unit

VC = LC + MC

TC (q) = FC + ( VC * q )

TR (q) = R * q

P( profit ) = TR(q) - TC(q) ------------ ( 1 )

c) attached below

d) If Cox Electrics makes 12,000 units of the new product

The resulting profit = -$5000

q = 12

P = TR ( q ) - TC ( q )

= ( R * q ) - ( Fc + ( Vc * q ) )

= ( 0.65 * 12000 ) - ( 10,000 + ( 0.25 * 12000 )

= -$5200

3 0

3 years ago