Answer:
9.25 years
Explanation:
Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:
According to given data
Assuming the Face value of the bond is $1,000
Coupon payment = C = $1,000 x 6.3 = $63 annually = $31.5 semiannually
Current Yield = r = 8.49% / 2 = 4.245% semiannually
Market value = $767.50
Market Value of the Bond = $31.5 x [ ( 1 - ( 1 + 4.425% )^-n ) / 4.425% ] + [ $1,000 / ( 1 + 4.425% )^n ]
Market Value of the Bond = $31.5 x [ ( 1 - ( 1 + 4.425% )^-n ) / 4.425% ] + [ $1,000 / ( 1 + 4.425% )^n ]
n = 18.53 / 2
n = 9.25 years
Answer:
7.5 years
Explanation:
Payback is the period a project takes to recover its initial capital outflow.
The formula for calculating the payback period = Initial investments divide by net cash flow per period.
Payback Period = Initial Investments/ Net Cash Flow per Period
Payback period = $450,000/ $60,000
Payback period =7.5 years
Answer and Explanation:
The computation is shown below:
a. Real interest rate is
= Nominal interest rate - inflation rate
= 1% - 3%
= -2%
2. The number of years is
We have to use the rule of 70 for doubling the investment
= 70 ÷ annual interest rate
= 70 ÷ 1.75%
= 40 years
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
Judgment will be for Larson. Although a decision by the majority of the partners in a partnership will control in matters concerning the ordinary operations of the firm business, such a decision is not binding if it contravenes the partnership agreement. In this case, the agreement provided that the partners would share profits equally. The decision by Rundles and Kreiger is therefore not effective, since is not based on the unanimous consent of all partners.
the correct answer to this problem is a.
