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tigry1 [53]
3 years ago
10

A month ago, you bought a one-year bond with a value of $100 that pays a fixed interest rate of 5 percent per year. The interest

rate of the economy was also 5 percent. Today you read in the newspaper that the interest rate in the economy increased to 6 percent. You are holding a bond that is:
Business
1 answer:
My name is Ann [436]3 years ago
3 0

Answer:

less desirable to other investors

Explanation:

<u>Given</u>: Current fixed coupon rate 5%

           Market rate of interest 5%

           New Market Rate of Interest 6%

Value of a bond is inversely related to economy interest rate or the yield to maturity (YTM). Value of a bond is expressed by the following equation:

B_{0}\ = \frac{C}{(1\ +\ YTM)^{1} }  \ +\ \frac{C}{(1\ +\ YTM)^{2} } \ +....+\ \frac{C}{(1\ +\ YTM)^{n} }\ +\ \frac{RV}{(1\ +\ YTM)^{n} }

wherein, C = Coupon rate of interest

         YTM = Market Rate of Interest or interest rate in the economy or investor's expectation

                n= Years to maturity

             RV = Redemption value

In the given case, C = YTM i.e par value bond. When ytm rises to 6%, the value of the bond shall fall making such a bond less attractive since it represents lower coupon payments than investor expectations.

Thus, now the bond would be less desirable to other investors.

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Michael's Machine Shop reports the following information for the quarter.
Mandarinka [93]

Answer:

a. $26

b. $23

c. $34

d. $29

e. $21

f.  $11

g. $14

h. $11

Explanation:

a. Variable cost per unit.

Variable cost per unit = Variable Manufacturing Costs + Variable Non - Manufacturing Costs

                                    = $12 + $9 + $2 + $3

                                    = $26

b. Variable production cost per unit.

Variable production cost per unit = Variable Manufacturing Cost

                                                       = $12 + $9 + $2

                                                       = $23

c. Full cost per unit.

Full cost per unit = Manufacturing and Non - Manufacturing (Variable and Fixed)

                            = $12 + $9 + $2 + $3 + $47,500/23,750 units + $142,500/23,750 units

                            = $12 + $9 + $2 + $3 + $2 + $6

                            = $34

d. Full absorption cost per unit.

Full absorption cost per unit = Variable Manufacturing Costs + Fixed Manufacturing Costs

                                                = $12 + $9 + $2 + $6

                                                = $29

e. Prime cost per unit.

Prime cost per unit = Direct Manufacturing Costs'

                                = $12 + $ 9

                                = $ 21

f. Conversion cost per unit.

Conversion cost per unit = Direct Labor Costs + Overheads Costs

                                         = $9 + $2

                                         = $11

g. Contribution margin per unit.

Contribution margin per unit = Sales - Variable Costs

                                                = $ 40 - $26

                                                = $ 14

h. Gross margin per unit.

Gross margin per unit = Sales - Full absorption cost per unit

                                     = $40 - $29

                                     = $11

3 0
3 years ago
Allison invested $23,000 in an account paying an interest rate of 6.7% compounded annually. Assuming no deposits or withdrawals
Vadim26 [7]

Answer:

18 years

Explanation:

Given that;

P= $23,000

A= $76,300

r= 6.7%

From

A = P(1 + r/100)^n

76,300 = 23,000 (1 + 0.067)^n

3.3 = (1.067)^n

Taking logarithm of both sides

log 3.3 = log (1.067)^n

log 3.3 = nlog(1.067)

n= log 3.3/log 1.067

n= 0.5185/0.0282

n= 18 years ( to the nearest year)

8 0
3 years ago
If houston company billed a client for $18,000 of consulting work completed , the accounts receivable asset increases by $18,000
Pavlova-9 [17]
The answer is

Revenues increases by 18000
7 0
3 years ago
Swifty Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product i
Bumek [7]

Answer:

See below

Explanation:

Assembled product

Cost = $24 + $20 = $44

Selling price = $69

Profit = $69 - $44 = $25

Unassembled product

Cost = $24

Selling price = $56

Profit = $56 - $24 = $32

Therefore, Swifty corporation should sell before assembly, the company will be better off by $7

5 0
2 years ago
As a contemporary manager, your employees will perceive that their opinions are more valued if: you provide settings where emplo
erma4kov [3.2K]

Answer:

 you provide settings where employees have the opportunity to converse with all levels of management.

Explanation:

In simple words, employees feel motivated and values when they fell involved in the decisions inside the organisation, as these decisions affects them too.

    Generally, the core decisions in any organisation are taken by top managers but they too are dependent on lower level managers for the data they receive. Hence, a network should be set for employees so they can give their suggestions to  all levels of managers.

6 0
3 years ago
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