Answer: B. $1,500
Explanation:
Cost of using Alpha Avenue
= 5,000 + (200 * 30 people)
= $11,000
Cost of using Beta Blvd.
= 8,000 + (150 * 30 people)
= $12,500
Cost savings = 12,500 - 11,000
= $1,500
Broke Benjamin Co. has a bond outstanding that makes semiannual payments with a coupon rate of 6.4 percent. The bond sells for $
1,066.57 and matures in 22 years. The par value is $1,000. What is the YTM of the bond?
1 answer:
Answer:
5.86%
Explanation:
In this question, we use the RATE formula i.e to be shown in the spreadsheet below:
Given that,
Present value = $1066.57
Future value or Face value = $1,000
PMT = 1,000 × 6.4% ÷ 2 = $32
NPER = 22 years × 2 = 44 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
The yield to maturity is
= 2.93% × 2
= 5.86%
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Answer
The answer and procedures of the exercise are attached in a the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Answer:
PV of 1st option = $185,015.50
PV of 2nd option = $192,683.78
Explanation:
Computing the present value of the monthly payments, we use the formula
Where PV = present value of the monthly payments
A = monthly salary
r = monthly interest rate = 6%/12 = 0.5% = 0.005
n = number of months = 24 months
PV of the 1st option, $8,200 monthly for the next 2 year
= $185,015.50.
PV of the 2ns option, $6,900 monthly + $37,000 signing bonus
= $155,683.78 + $37,000 = $192,683.78.