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Elis [28]
3 years ago
11

In November 2017, Treasury 4 1/2s of 2044 offered a semiannually compounded yield to maturity of 2.66%. Recognizing that coupons

are paid semiannually, calculate the bond's price. Assume face value is $1,000. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Alexxx [7]3 years ago
6 0

Answer:

The price of a bond is $492.24

Explanation:

F= face value of bond = $1000

T=time to maturity of bond = 2044-2017= 27 years

r=yield to maturity=2.66% semi-annulay=0.0266

Formula to calculate price= F/(1+r)∧T

we have = 1000/(1+.0266)∧27 = 1000/2.0315 = $492.24

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3 years ago
Can you think of some other capital budgeting situations in which negative cash flows during or at the end of the project's life
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Answer:

Multiple IRRs:

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Hurdle rate is the minimum required rate of return which businesses use as a benchmark to decide whether to invest in a project or not.

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Imagine that toward the end of the lifecycle of a project, a forecasted increase external costs such as Interest Rate, influenced by government policies translates to an erosion of the bottom line generated by the business in that year.

Period                                             0          1       3  3 4 5

Unconventional cash flows ($)-19,000 16,000 16,000 6,000 6,000 -52,000

The series is non-conventional cash-flow pattern, which has two sign changes. This is the range in which the net present value of the non-conventional cash flow series is positive. The multiple IRR problem poses a series problem to analysts because the decision is not obvious.  

Cheers!

5 0
3 years ago
The general journal is used to: a. post all accounting entries not posted in other individual journals. b. post all accounting e
hjlf

Answer: The general journal is used to post all accounting entries.

Explanation:

The general journal is the journal where all company transactions are recorded in. In other words, a general journal is the book of original entry where bookkeepers and accountants record business transactions according to the date the transactions take place.

It is the initial place where transactions are recorded, every page in the journal is divided into columns for dates, debit or credit records, serial numbers etc. Some companies keep specialized journals, such as sales journals or purchase journals, which records only a particular type of transactions. When a transaction has been recorded in the general journal, the amount is then posted to the appropriate accounts.

6 0
3 years ago
Read 2 more answers
In 2000, Michael purchased land for $100,000. Over the years, economic conditions deteriorated, and the value of the land declin
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Answer:

D) $41,000 loss.

Explanation:

3 0
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ABC Partnership has the following capital balances and profit and loss percentages. A (50%) $100,000 B (30%) $200,000 C (20%) $3
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Answer:

Answer:

$225,000

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40 x 0.25 = 10% interest from Goodwill

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Explanation:

8 0
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