1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Zigmanuir [339]
4 years ago
10

You are considering buying a 10-year, $1,000 par value bond issued by IBM. The coupon rate is 8% annually, with interest being p

aid semiannually. If you expect to earn a 10% rate of return on this bond, what is the maximum price you should be willing to pay for this IBM bond?
Business
1 answer:
ehidna [41]4 years ago
4 0

Answer:

The maximum price we should be willing to pay for this IBM bond is $ 877.

Explanation:

The price of bond can be determine by discounting all future cashlows we will get from bond in form of interest payment or redemption amount using expected rate of return.

The detail calculation is given below.

Price = 1000 * Discount factor + annuity factor * 80

Price = 1000 * 0.386 + 80 * 6.145     = 878

Discount factor = (1+10%)^-10 = 0.386

Annuity factor = (1 - (1+10%)^-10)/10% = 6.145

You might be interested in
Kier Company issued $700,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 4-year term to mat
mezya [45]

Answer: Interest expense = $45500

Cash outflow = $45500

Explanation:

Based on the information that were given in the question, the amounts of interest expense and cash flows from operating activities, that will be reported in the financial statements for the year ending December 31, Year 1 will be calculated thus:

Interest expense = $700,000 × 6.50%

= $700,000 × 0.065

= $45500

The interest expense of $45500 will be reported on December 31, Year 1 in the income statement and will also be reported in the cash outflow as well. Therefore,

Interest expense = $45500

Cash outflow = $45500

5 0
3 years ago
Why is the all seeing eye on the dollar bill?
S_A_V [24]
It's a symbol of showing an eye often surrounded by rays of light or a glory and usually enclosed by a triangle. It represents the eye of God watching over humanity. Hope this helps.
5 0
3 years ago
Operations management is the set of activities that creates value in the form of goods and services by transforming true or fals
Basile [38]

Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. - True.

Operations management (OM) is the administration of enterprise practices to create the very best level of efficiency viable inside an business enterprise. it's far concerned with converting materials and exertions into items and offerings as effectively as viable to maximize the income of an business enterprise.

What are the three kinds of operations management?

Operations management consists of three ranges: strategic, tactical, and operational

What are the key factors of Operations management?

The important thing elements of Operations management are; Product choice and layout: The proper sort of products and accurate designs of the goods are crucial for the achievement of an agency. A wrong choice of the product and/or negative design of the products can render the employer's operation useless and non-competitive.

What do you examine in operations management?

Blanketed in operations management is the whole thing involved in turning raw materials into deliverable service or product. this may include designing manufacturing structures, employee schooling, centers planning, deliver chain control, stock control, product layout, best control and much more.

Learn more about Operations management here:- brainly.com/question/1382997

#SPJ4

8 0
2 years ago
Joe Henry's machine shop uses 2,500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles
bixtya [17]

Answer:

a. 339 brackets

b. 169.5 and $296.63

c. 12 and $300

d. $596.63

e. 4 days

f. 40 brackets

Explanation:

Economic Order Quantity is the Order size that minimizes holding costs and ordering cost of inventory.

Economic Order Quantity = √ 2 × Annual Demand × Ordering Cost / (Holding Cost per unit)

                                           = √(2 × 4,000 × $25.00) / $1.75

                                           = 339 brackets

Average Inventory = Economic Order Quantity ÷ 2

                               = 339 ÷ 2

                               = 169.5

Annual inventory holding cost = Average Inventory × Holding Cost per unit per year

                                                  = 169.5 × $1.75

                                                  = $296.63

Orders to make each year = Total Annual Demand ÷ Economic Order Quantity

                                            = 4,000 ÷ 339 brackets

                                            = 11.7994 or 12

Annual order cost = Number of Orders × Cost per Order

                              = 12 × $25.00

                              = $300

Total Annual Cost = Annual inventory holding cost +  Annual order cost

                              = $296.63 + $300

                              = $596.63

Reorder point (ROP) = Lead time × usage per day

                                  = 4 × ( 2,500 / 250)

                                  = 40 brackets

6 0
3 years ago
What is the standard deviation of a portfolio of two stocks given the following data: Stock A has a standard deviation of 18%. S
Lerok [7]

Answer:

Stock B has a standard deviation of 14%. The portfolio contains 40% of stock A, and the correlation coefficient between the two stocks is -.23. A) 9.7% B)

Explanation:

Stock B has a standard deviation of 14%. The portfolio contains 40% of stock A, the portfolio contains 60% of stock B, and the correlation coefficient between the two stocks is -.23. A. 9.7% B. 12.2% C. 14% ... The standard deviation of return on investment A is .10, while the standard deviation of return on investment B is .05.

5 0
3 years ago
Other questions:
  • A ____ is an amount of money. Usually, has a specific purpose and is stored in one place, such as a bank account.
    11·1 answer
  • On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6%
    12·1 answer
  • The three general types of media schedules are
    8·1 answer
  • In which career or job role in business information management do you need to create and manage project plans, and also coordina
    5·1 answer
  • A company completes 21,000 units this month and has ending goods in process inventory of 3,000 units which are estimated to be 4
    9·1 answer
  • Grey owns the surface rights for High Desert Ranch, which includes a house, a bunkhouse, and two barns. Industrial Mining Inc. o
    5·1 answer
  • When determining the cost of a manufactured good under an operation-costing system, a company would:
    10·1 answer
  • The total factory overhead for Bardot Marine Company is budgeted for the year at $1,760,850, divided into four activities: fabri
    8·1 answer
  • You are the vice president of engineering for a large company. For the last several years the company has experienced lower sale
    14·1 answer
  • 1. If Merchandise Inventory decreases from the beginning to the end of the fiscal period, the adjusting entry includes a debit t
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!