Answer:
Price at issuance is $1,000 for both bonds.
Price of the 5 year bond after the market rate increased to 7.4% is:
PV of face value = $1,000 / (1 + 3.7%)⁸ = $747.77
PV of coupon payments = $27.50 x 6.81694 (PV annuity factor, 3.7%, 8 periods) = $187.47
Market price = $935.24
this bond's price decreased by 64.76/1,000 = 0.06476 = 6.48%
Price of the 10 year bond after the market rate increased to 7.4% is:
PV of face value = $1,000 / (1 + 3.7%)¹⁸ = $519.97
PV of coupon payments = $27.50 x 12.97365 (PV annuity factor, 3.7%, 18 periods) = $356.78
Market price = $876.75
this bond's price decreased by 123.25/1,000 = 0.12325 = 12.33%
Answer:
32.44 days
Explanation:
The computation of the average collection period is shown below:
But before that we have to determine the account receivable turnover ratio
So, the account receivable turnover ratio is
= (net sales) ÷ (average of account receivables)
= $25,875 ÷ ($2,400 + $2,200) ÷ 2
= $25,875 ÷ $2,300
= 11.25 times
Now the average collection period is
= Total no of days in a year ÷ account receivable turnover ratio
= 365 ÷ 11.25
= 32.44 days
We assume that the no of days that should be considered is 365 days
Answer:
See below
Explanation:
Raw materials purchased is computed as;
Raw material purchase = Ending inventory + required for production - beginning inventory
= 50,000 + ((80,000 + 770,000 - 30,000) × 3) - 60,000
= 50,000 + 2,460,000 - 60,000
= 2,450,000 grams
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Answer:
$32.14 per share
Explanation:
The computation of the current value of the single share is shown below:
= Current year dividend ÷ (Required rate of return - growth rate)
where,
Current year dividend is $2.25 per share
Required rate of return is 10%
And, the growth rate is 3%
So by placing these items, the current value is
= $2.25 ÷ (10% - 3%)
= $32.14 per share
