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pishuonlain [190]
2 years ago
15

You bought one of Great White Shark Repellant Co.'s 8 percent coupon bonds one year ago for $810. These bonds make annual paymen

ts and mature 14 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 11 percent. If the inflation rate was 3.4 percent over the past year, what was your total real return on investment?
Business
1 answer:
Gennadij [26K]2 years ago
8 0

Answer:

real rate of return = 4.77%

Explanation:

you purchased the bond at $810 with 14 years to maturity

now, 1 year later the bond's price is:

  • PV of coupon payment = $1,000 / 1.11¹³ = $257.51
  • PV of coupon payments = $80 x 6.7499 (PV annuity factor, 11%, 13 periods) = $539.99

market value = $797.50

total nominal returns = $80 (coupon payment) + ($797.50 - $810) = $67.50

the real rate of return = {[1 + ($67.50/$810)] / (1 + 3.4%)} - 1 = 4.77%

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After graduating from college, Yunis, age 22, started working for his parent's real estate business as an unpaid assistant. He w
True [87]

Answer:

Part of the labor force and employed

Explanation:

After graduating from college, Yunis, age 22, started working for his parent's real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units . In the Current Population Survey, Yunis is considered part of the labor force and employed. Although Yunis is not getting anything in return and he is working 25 hours a week but he still will be considered as the part of the labor force and employed because he is working in his own business and the money generated with his services will be coming to his own family, therefore, he will be considered as an employed man.

3 0
3 years ago
David has purchased an investment that he expects to produce an annual cash flow of​ $3,000 for five years. He requires an​ 8% r
Inessa05 [86]

Answer:

Explanation:

In order to find the highest amount david can pay or in other words the present value of the investment we would have to discount the cash flows

3000/1.08+3000/1.08^2+3000/1.08^3+3000/1.08^4+3000/1.08^5=11,978

8 0
3 years ago
HELP ME PLEASE************
ratelena [41]

Answer:

The 1st one because I would want the product to be okay for me to use and not under pay for something that will harm me.

Explanation:

It is just plain facts!!!

6 0
3 years ago
Read 2 more answers
3. An investor shorts 100 shares when the share price is $20 and closes out the position six months later when the share price i
solniwko [45]

Answer:

$160

Explanation:

Calculation to determine How much does the investor gain or lose

Investor gain =[($20-$18.2)*100 Shares]- ($0.2*100 shares)

Investor gain=($1.8*100 shares)-($0.2*100 shares)

Investor gain=$180-$20

Investor gain=$160

Therefore The amount that the investor gain is $160

7 0
3 years ago
Waterway Industries purchased a depreciable asset for $837300 on January 1, 2018. The estimated salvage value is $84000, and the
murzikaleks [220]

Answer:

$222,100

Explanation:

Cost = $837,300

Residual value = $84,000  

Useful life = 9 years  

Now,  

Annual straight line depreciation = \frac{Cost-Residual Value}{Useful life}  

Annual straight line depreciation = \frac{837,300 - 84,000}{9}  

Annual straight line depreciation = \frac{753,300}{9}  

Annual straight line depreciation = $83,700

Accumulated depreciation for three years i.e., 2018, 2019 and 2020 would be:

Accumulated depreciation = 3 × $83,700

Accumulated depreciation = $251,100

Book value (at the end of year 2020) = Cost - Accumulated depreciation  

Book value (at the end of year 2020) = $837,300 - $251,100

Book value (at the end of year 2020) = $586,200

Revised useful life = 5 years

No. years asset has been used = 3 years

Remaining useful life = 2 years

Revised salvage value = $142,000

Therefore, depreciation expense for the remaining three year would be:

Revised depreciation expense = \frac{Book value at the end of 2020 - Revised residual Value}{Remaining useful life}  

Revised depreciation expense = \frac{586,200 - 142,000}{2}  

Revised depreciation expense = \frac{444,200}{2}

Revised depreciation expense = $222,100

5 0
3 years ago
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