Answer: -$100
Explanation:
Value of forward contract = Selling price - Forward price on bond
Forward price = Present value of cashflows + Present value of bond
Periodic rate = 7%/ 2 = 3.5% per semi annum
= 8% / 2 = 4%
3.5% will be used to discount the payment 6 months from now as that is the 6 month rate. The rest will be 4%.
= (80 / (1 + 3.5%) ) + ( 80 / ( 1 + 4%)²) + (940 / ( 1 +4%)²)
= $1,020.342
= $1,020
Value of forward contract = 920 - 1,020
= -$100
Answer:
Tax carried forward to consumer $2
Effective tax on the producers $ 1
TRUE
As the nominal tax is always subject to elasticity in demand and supply which generates an effective tax burden on each party.
Explanation:
<em><u>Before-tax:</u></em>
Quantity 25
Price $7
<em><u>After-tax:</u></em>
Quantity 18
Price $8
The producer receives $5 (thus there has been a tax of $3)
The tax-burden (who actually pay the tax)
is based on the elasticity of the demand and supply of the market.
When demand is more inelastic the tax burden goes into the consumer more than producers.
When supply is more inelastic the tax burden goes into the producer more than consumers.
Answer:
Dr. Right of use asset $58,000; Cr. Lease liability $58,000
Explanation:
Journal entry
Date General Journal Debit Credit
Right of use of asset $58,000
Lease Liability $58,000
(Entry to record the initial transaction)
Answer:
Current yield = 0.04850444624 or 4.850444624% rounded off to 4.85%
Explanation:
The current yield is the yield of a bond provided by its interest or coupon payments as a percentage of its current price. The formula to calculate current yield is as follows,
Current Yield = Interest payment per year / Current price of the bond
As the bond is a semi annual bond, assuming that the par value is 100, the semi annual and annual interest or coupon payment will be,
Semi annual coupon = 100 * 0.048 * 6/12 = $2.4
Annual coupon payment = 2.4 * 2 = 4.8
Current Yield = 4.8 / 98.96
Current yield = 0.04850444624 or 4.850444624% rounded off to 4.85%
The marginal cost is how much must be added from the ninth to the tenth gallons. For the 9 gallons and car wash, she would have paid ($2/gallon)*(9 gallons) + ($1.50/car wash) = $19.50
For the 10 gallons and car wash, she would pay ($2/gallon)*(10 gallons) + ($0/car wash) = $20.00
Therefore her marginal cost is $20.00 - $19.50 = $0.50