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Temka [501]
3 years ago
14

A company wishes to raise $27 million by issuing 15-year semi-annual coupon bonds with face value of $1,000 and coupon rate of 6

.60 percent. The bonds will have a yield to maturity of 7.70 percent. Determine the minimum number of these bonds the company needs to issue to raise the desired amount of money.
Business
1 answer:
Evgen [1.6K]3 years ago
3 0

Answer:

We first need to find out the present value of each $1,000 bond and then we can figure out how many of these bonds we require to raise $27 million

The n of payments is 15*2 because semi annual payments for 15 years so our N will be 30

The YTM is 7.70/2 because of semi annual payments = 3.85

The Face value is of 1,000 so FV= 1,000

The payments our 1000*0.066=66 divided by 2 because semi annual payments so PMT= 33

We will put these values in a financial calculator to compute the PV of a $1000 bond.

PV= 903

So now we know that the company can get $903 for each $1,000 bond as the bonds present value is 903.

Now in order to find out how many bonds need to be issued to raise 27 million we will divide 27 million by 903, as 903 is the amount we can raise by issuing a single bond.

27,000,000/903=29,900.3 so 29,901

The company will have to issue 29,901 bonds of face value $1,000 to raise $27 million

Explanation:

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Bad White [126]

Answer:

9 in Aynor and 31 in Spartanburg

Explanation:

we need to build the following:

    A              B           C

           units    COST

Aynor          9           =93 + 80*B2 + POWER(B2;2)*7

Spartanburg 31           =147 + 20*B2 + POWER(B2;2)*3

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5 0
3 years ago
How do you account for financial losses in order to maintain quality customer service, for example, a restaurant that gives a fr
IgorC [24]

Answer: These costs will be classified as sales discounts

Explanation: Sales discounts are discounts given to customers for buying a company's products or special offer given to customers that are regular and loyal to a company's brand. Discounts are also given to attract new customers to a company's product.

Discounts are accounted for under the operational expenses head and are recorded as part of the company's operational expenses.

The effect of discounts are that it reduces the company's net profit but the positive effect is that it can increase the total sales of the company.

4 0
3 years ago
wist Corp. has a current accounts receivable balance of $330,800. Credit sales for the year just ended were $3,804,200. a. What
Alex17521 [72]

Answer:

Receivables turnover = 11.50 times

Days' sales in receivables = 31.74 days

Average collection period = 31.74 days

Explanation:

<u>Receivables Turnover Ratio</u>

Receivables turnover = Credit Sales / Receivables

                                    = $3,804,200 / $330,800

                                     = 11.50 times

Receivables turnover ratio measures how many times a company's receivables are converted to cash in a period. A high receivables turnover ratio can indicate that a company’s collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly.

<u>Days' sales in Receivables/ Average Collection Period</u>

Days' sales in receivables = 365 days / Receivables turnover

                                            = 365 / 11.50

                                            = 31.74 days

On average, credit customers took 31.74 days to pay off their accounts.

The days' sales in receivable ratio which is also known as the average collection period tells you the number of days it took on average to collect the company's accounts receivable during the past year.

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As the owner of La Boulangerie Bakery in Baton Rouge, Louisiana, you have a devoted clientele savoring your delicacies. Your sal
Mice21 [21]

Answer:

La Boulangerie Bakery,

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25th April, 2021

Dear esteemed customers,

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As you can bear witness to, there has been a drastic increase in the cost of doing business in our industry with the notable changes being in the wheat used in producing our confectioneries, the sugar as well as the rising cost of transportation to various customers' locations.

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I do hope you would understand our challenges as a company and bear with us regarding to this delivery charge introduction.

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Explanation:

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