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3 years ago

A customer buys $100,000 of a new issue 30 year U.S. Government bond at 80. At maturity, the customer will have:

Business

1 answer:

exis [7]3 years ago

3 0

Answer: No capital gain or loss

Explanation:

The bonds were bought at discount but will be redeemed at par. This does not mean that there will be a capital gain because the discount will simply be added back to the value of the bond overtime.

When the bond then gets to maturity, the discount would simply have been added back because the bond is to be redeemed at par. Because the bond was always going to be redeemed at par, the difference in price is not considered a capital gain.

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You have 40 years left until retirement and want to retire with $5 million. Your salary is paid annually, and you will receive $

Marat540 [252]

Answer:

16.67%

Explanation:

Calculation to determine what percentage of your salary must you save each year

First step is to calculate the Annual savings

Annual savings=$5 million*[(10%-3%)/(1+0.1)^40-(1+0.03)^40]

Annual savings=$5 million*0.07/(1.1^40-1.03^40)

Annual savings=$8333.88

Now let determine the percentage of the salary you must save each year

Proportion of savings=$8333.88/$50,000

Proportion of savings=0.1667*100

Proportion of savings=16.67%

Therefore the percentage of your salary that you must save each year is 16.67%

5 0

3 years ago

Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufactur

otez555 [7]

Answer:

D. outsourcing

Explanation:

Outsourcing -

It is the method in a business to hire people from any other company in order to perform a particular task , is known as outsourcing .

The practice of outsourcing have the objective , in order to increase the efficiency of the company or to accomplish any goal with in a very short period of time .

Hence , from the question ,

The Aluminium company Alumplus , outsource people from out side its company to produce the products .

8 0

3 years ago

Adams Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales

vagabundo [1.1K]

Answer:

Expected contribution as per sales mix = $37*0.60 + $50*0.40

= $22.20 + $20

= $42.20 per unit

Total number of products in total at break even point = Total fixed cost / Contribution per unit

= $227,880 / $42.20 per unit

= 5,400 units

How many units each of Super and Supreme must Adams sell to break even?

<u>According to sales mix:</u>

Super = 5,400 * 60% = 3,240 units

Supreme = 5,400 * 40% = 2,160 units.

3 0

3 years ago

A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13,

Anit [1.1K]

Answer:

Incremental income for Sale as scrap is $36,400 and Rework is $46,200

Explanation:

Sale as scrap Rework

Sales of reworked units (13000*8.2) $106,000

Sales of scrap units (13000*2.8) $36,400

Cost to rework units (13000*4.6) ($59,800)

Opportunity cost of not making new units

Incremental income (loss) $36,400 $46,200

6 0

3 years ago

A company issues $16200000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The

bekas [8.4K]

Answer:

The amount of interest expense which will be recognized in 2020 is $949,681.45.

Explanation:

The following are given in the question:

Bond value = $16200000

Bond interest rate = 5.8%

Proceed from bond = $15825541

Yield rate = 6%

The amount of interest expense which will be recognized in 2020 can now be calculated as follows:

Interest expense for January 1, 2020 to June 30, 2020 = Proceed from bond * Yield rate * (6 / 12) = $15825541 * 6% * (6 / 12) = $474,766.23

Discount amortized during first 6 months = Interest expense for January 1, 2020 to June 30, 2020 - (Bond value * Bond interest rate * (6 / 12)) = $474,766.23 - ($16200000 * 5.8% * (6 / 12)) = $474,766.23 - 469,800 = $4,966.23

Interest expense for July 1, 2020 to December 31, 2020 = (Proceed from bond + Discount amortized during first 6 months) * Yield rate * (6 / 12) = ($15825541 + $4,966.23) * 6% * (6 / 12) = $474,915.22

Interest expense to be recognized in 2020 = Interest expense for January 1, 2020 to June 30, 2020 + Interest expense for July 1, 2020 to December 31, 2020 = $474,766.23 + $474,915.22 = $949,681.45

Therefore, the amount of interest expense which will be recognized in 2020 is $949,681.45.

3 0

3 years ago