Answer: ARM A
Explanation:
The issuers of Adjustable-Rate Mortgage adjust its rate based on a certain index in the market, the purpose of which is to reflect the current cost being incurred by the issuer for loaning out money.
Both these mortgages are similar in everything except the index period. ARM A has a longer index period which means that it is expose to more forward rates and as the yield curve is generally upward trending(interest rates are higher in future), ARM A will be offered at a higher interest rate.
Answer:
a) safety stock = z-score x √lead time x standard deviation of demand
z-score for 99.9% = 3.29053
√lead time = √7 = 2.6458
standard deviation of demand = 3
safety stock = 3.29053 x 2.6458 x 3 = 26.12 ≈ 26 soaps
reorder point = lead time demand + safety stock = (7 x 16) + 26 = 138 soaps
EOQ = √[(2 x S x D) / H]
S = order cost = $10
D = annual demand = 16 x 365 = 5,840
H = $0.05
EOQ = √[(2 x $10 x 5,840) / $0.05] = 1,528.40 ≈ 1,528 soaps
b) total order costs per year = (5,840 / 1,528) x $10 = $38.22
total holding costs = (1,528 / 2) x $0.05 = $38.20
total annual ordering and holding costs = $76.42
Answer:
$156,058
Explanation:
Missing word <em>"PV of annuity due of $1: n = 20; i = 6% is 12.15812 *PV of ordinary annuity of $1: n = 20; i = 6% is 11.46992 **PV of $1: n = 20; i = 6% is 0.31180"</em>
<em />
n = 20, i = 6%
Periodic interest payments of the bonds = Face value of the bonds * Stated rate of interest * 6 months/12 months
= $140,000 * 14% * 6 months/12 months
= $9,800
Cash Flow Amount Table Value Present Value
Interest payments $9,800 11.46992 $112,405
Maturity Value $140,000 0.31180 <u>$43,653</u>
Issue Price of the bonds at January 1, 2021 <u>$156,058</u>
Answer:
Credit an equity account for $800
Explanation:
We assume that the accountant has debited an asset account for $1,500 and credited a liability account for $700 so we have to credit the equity account for $800 to balance the accounting equation
In every balance sheet, the accounting equation has used that means
Total assets = Total liabilities + Shareholder equity
In mathematically,
$1,500 = $700 + $800
$1,500 = $1,500
Balanced both sides of the balance sheet.
Answer: Both I and II
I. The assumed health care cost trend rate used to measure the expected cost of benefits covered by the plan. II. The accumulated post retirement benefit obligation.
Explanation:
Company must disclose the expected cost of benefits covered by their health care plan and also the accumulated post retirement benefit plan obligation.