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PilotLPTM [1.2K]
3 years ago
8

Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles,

whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with three years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $1,051,447.12 $876,205.93 $744,775.04 $552,009.74
Business
1 answer:
garik1379 [7]3 years ago
3 0

Answer:

$876,205.93

Explanation:

Calculation for the value of the Treasury note

FV= 1,000,000

N=3*2

N=6

PMT=3%*1,000,000/2

PMT=30,000/2

PMT= 15,000

I/Y=7.7/2

I/Y= 3.85

Using financial calculator to find the present value of the treasury note

Present Value = $876,205.93

Therefore the present value of the treasury note will be $876,205.93

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Why is cash flow important to government entities? How does an administrator plan for cash flow? What tools are available for th
vodka [1.7K]

Answer:

Cash flow is important to government entities because:

As with non-government entities, cash flow is important to government organizations because it is required for the operations of any organization regardless of whether they are government-owned or not, for-profit or not.

The measurable difference in the cash balance of any organization from one period to the next is referred to as Cashflow. No business or entity can continue operations if they keep taking out or spending more cash than they can make.

An administrator can plan for cash flow using a Cash Flow Planner.

This can take the form of a simple excel spread sheet  with one column showing on one side all the monies that one is expecting to come in (Account Receivables) and an adjacent column showing all the monies one is expecting to pay out (Account payables).

At the bottom of the excel, you can show the bank balance.

There are specialised apps that help perform this function. An example would be Quickbooks, Planware, Cash Flow Planner, etc.

Cheers!

6 0
3 years ago
Alice earned $12 per hour. What equation shows the relationship between her
LenaWriter [7]

<em><u>The equation shows the relationship between her  weekly salary (w), hours per week (h), and rate per hour (r) is:</u></em>

w = h \times r

<em><u>Solution:</u></em>

Given that,

Alice earned $12 per hour

1 hour = $ 12

<em><u>Find the number of hours in 1 week</u></em>

1 day = 24 hours

1 week = 7 days

Therefore,

1 week = 7 x 24 = 168 hours

Let "h" be the hours per week

let "r" be the rate per hour

Let "w" be the rate per hour

From given,

r = $ 12

h = 168 hours

weekly salary = hours per week x rate per hour

w = h \times r

w = 168 \times 12\\\\w = 2016

Thus, she earns $ 2016 for 1 week

5 0
3 years ago
Read 2 more answers
If employees are bonded a. it means that they are not allowed to handle cash b. they have worked for the company for at least 10
Ierofanga [76]

Answer:

c. they have been insured against misappropriation of assets.

Explanation:

A company bonds its employees to protect itself against theft by its workers.  Being bonded means securing the money available to customers if a claim is made against the company. Bonding offers compensation to a business should a loss arise through employee's actions.

The law requires companies that handle cash and cash equivalents such as stocks certificates to bond their employees. A company may choose from the various types of bond insurance in the market. For example, employers may use the fidelity bond to protect against employee theft.

6 0
3 years ago
What is the name for the common currency of Europe?
Alika [10]
The euro is the common currency across Europe.
7 0
3 years ago
Read 2 more answers
Shaan and Anita currently insure their cars with separate companies, paying $650 and $575 a year. If they insure both cars with
icang [17]

Answer:

$1615

Explanation:

($575 + 650) 0.10 = $122.50

Find the future value of $122.50

Future value can be calculated using a financial calculator:

$122.50 = PMT

10 = N

6% = I/Y

Press compute then FV

Fv = $1615

I hope my answer helps you

3 0
3 years ago
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