Let p be the price of the bond.
Annual coupons payment = 85
Par value (future value) is $1000.
So with a yield-to-maturity of 10% in three years,
p(1+10%) = 1000+3*85
solve for p
p=(1000+3*85)/1.10=1140.91
Note: since the coupon payment is not reinvested in the bond, the value is not compounded. Thus there is additional benefit if the payments are reinvested elsewhere. In other words, the yield-to-maturity actually under-estimates the potential yield.
Answer: E) May depend on some future event occurring. It is not a characteristic of known liabilities.
Explanation: Unknown or uncertain liabilities are those whose existence depends on the occurrence of a future event.
Known liabilities <u>are definitely determinable and measurable.</u>
<u />
Answer:
a. $29,496
b. $21,996
Explanation:
a. The Computation of budgeted marketing expense for the fourth quarter is shown below:-
Sales units 2,640
(2400 × 110%)
Variable marketing expenses per unit sold $0.15
Total Variable marketing expenses $396
Fixed Marketing expenses $18,000
Salaries ($6,000 × 3)
Depreciation ($2,500 × 3) $7,500
Insurance ($1,200 × 3) $3,600
Total Fixed marketing expenses $29,100
Budgeted marketing expense
for the fourth quarter $29,496
b. Estimated cash payment for marketing expenses for the fourth quarter = Budgeted marketing expense for the fourth quarter - Depreciation
= $29,496 - $$7500
= $21,996
<span>The term applied to the periodic expiration of a plant asset's cost over its life in a balanced and orderly way is depreciation. It is not process for valuation nor is process that results in gathering of cash. Land expenses are not subject to depreciation.</span>
Answer:
Installing equipment, designing systems, gathering information