Answer:
useful life= 12 years
Explanation:
Giving the following information:
Purchase price= $140,000
Salvage value= $20,000
Annual depreciation= $10,000
<u>To calculate the useful life, we need to use the straight-line method formula:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
10,000= (140,00 - 20,000) / useful life
10,000useful life = 120,000
useful life= 120,000 / 10,000
useful life= 12 years
A Forward transaction in the foreign exchange market requires delivery of foreign exchange at some future date.
A forward contract, or simply a forward, is a sort of derivative instrument in finance. It is a non-standard contract between two parties to buy or sell an asset at a specific future time at a price agreed upon at the time of the contract's conclusion.
A forward transaction is when two people or other entities bind themselves to carry out a trade in the future rather than right now. Futures deals differ from spot trading due to the timing of the transactions.
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Well, outstanding debt is debt you owe to a creditor or multiple creditors. Outstanding debt can be on a credit card, loan or student loan. ... If the amount you owe is close to your credit limit that is likely to have a negative effect on your score.
Answer:
C) ABC 5% and DEF 5.7%
Explanation:
Data provided in the question:
Purchasing Cost of Stock ABC purchased = $40 per share
Purchasing Cost of Stock DEF purchased = $35 per share
Time = 6 months
Selling price of share of ABC = $42 per share
Selling price of DEF share = $36
Dividend paid to the DEF = $0.5 each quarter i.e $0.5 twice in 6 months
Thus,
Total dividend paid to DEF = $0.5 × 2
= $1
Now,
For ABC
Total return = Selling price - Purchasing Cost
= $42 - $40
= $2 per share
thus,
Holding period return = [ Total return ÷ Purchasing cost ] × 100%
= [ $2 ÷ $40 ] × 100%
= 5%
For DEF
Total return = Selling price + Dividend received - Purchasing Cost
= $36 + $1 - $35
= $2 per share
thus,
Holding period return = [ Total return ÷ Purchasing cost ] × 100%
= [ $2 ÷ $35 ] × 100%
= 5.7%
Hence,
option C) ABC 5% and DEF 5.7%.
Answer:
2129 futures contracts to be sold
Explanation:
Asset worth = $310 million
Asset duration = 12 years
liabilities = $248 million
Liabilities duration = 5 years
T-bond futures contracts = 104-20 (30nds)
% of assets = 310 / 248 =
<u>Determine how many futures contracts Village Bank will sell to fully hedge the balance </u>
Number of Contracts = -[Assets * (Asset Duration – (Liabilities Duration * % of Assets) / (Duration * Contract Value)]
= - [ 310 * ( 12 - ( 5 * (310/248)) / ( 8 * ( 104 + ( 20/30)) ]
= - [ 310 * ( 12 - 6.25 ) / ( 8 * 104.6667 ) ]
= - [ 310 * 5.75 / 837.3336 ]
= - 2.12878 * 1000
= 2128.78 ≈ 2129 ( number of futures contracts to be sold )