Answer:
At Yield to maturity = 11%
Price = $1,000
Explanation:
As for the provided information we have:
Par value = $1,000
Interest each year = $1,000 
11% = $110
Effective interest rate semiannually = 11%/2 = 5.5% = 0.055
Since it is paid semiannually, interest for each single payment = $110 0.5 = $55 for each payment.
Time = 8 years, again for this since payments are semi annual, effective duration = 16
Price of the bond = 
Here, C = Coupon payment = $55
i = 0.055
n = Time period = 16
M = Maturity value = Par value = $1,000
Therefore, if yield to maturity = 11% then,
P = 
= $1,000
Answer:
Present value is nothing but how much future sum of money worth today. It is one of the important concepts in finance and it is a basis for stock pricing, bond pricing, financial modeling, banking, and insurance, etc. Present value provides us with an estimated amount to be spent today to have an investment worth a certain amount of money at a specific point in the future. Present value is also called a discounted value. It is an indicator for investors that whatever money he will receive today can earn a return in the future. With the help of present value, method investors calculate the present value of a firm’s expected cash flow to decide if a stock is worth to invest today or not.
The formula for calculating PV is shown below
PV = CF/ (1+r)n
Here ‘CF’ is future cash flow, ‘r’ is a discounted rate of return and ‘n’ is the number of periods or year.
Example
Let’s say that you have been promised by someone that he will give you 10,000.00 Rs 5 year from today and interest rate is 8% so no we want to know what the present value of 10,000.00 Rs which you will receive in future so,
PV = 10,000/ (1+0.08)5
PV = 6805.83 (To the nearest Decimal)
So present-day value of Rs 10,000.00 is Rs 6805.83
Explanation:
Answer: add this flight because marginal revenue exceeds marginal costs.
Explanation:
Since the total cost of the flight would be $1,100, of which $800 are fixed costs already incurred, then the variable cost in this case will be )$1100 - $800) = $300.
Since the expected revenues from the flight are $600, thus implies that the total revenue exceeds total variable cost and therefore Dash should add the flight because total revenue is more than total variable cost and the marginal revenue exceeds marginal costs.
b. The optional pricing strategy (O.P.)
More about optional pricing:
When a company uses optional product pricing, it sets a base product at a lower cost and additional, optional products at a higher price to make up for any losses. Optional products are not required for the base product to function, but they typically improve the customer experience.
The two key components of optional product pricing:
- A base product is the main draw for the customer or the reason they are purchasing. It meets the needs of the customer and does not require the optional product to function.
- A complimentary product(s): A product that a customer who purchased the base product is likely to purchase in order to improve their experience with the base product.
Learn more about pricing here:
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