"_____ is a mechanism for gathering information about performance deficiencies after they occur."

You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall St

goblinko [34]

Answer:

a. 1.40%

b. 8.25%

Explanation:

a. Calculation to determine the inflation premium

Using this formula

Expected IP = i - RIR

Let plug in the formula

Expected IP = 2.15% - 0.75%

Expected IP= 1.40%

Therefore the inflation premium is 1.40%

b. Calculation to determine the fair interest rate on Moore Corporation 30-year bond

Using this formula

Fair interest rate=Default risk premium +Liquidity risk premium+Maturity risk premium +T-bills are currently earning

Let Plug in the formula

Fair interest rate=2.05%+ 1.40%+ 2.65% + 2.15%

Fair interest rate= 8.25%

Therefore the fair interest rate on Moore Corporation 30-year bond is 8.25%

6 0

3 years ago

DS Unlimited has the following transactions during August. August 6 Purchases 78 handheld game devices on account from GameGirl,

borishaifa [10]

Answer:

August 6

DR Inventory $18,720

CR Accounts Payable $18,720

(To record purchase of goods for sale)

= 76 devices * $240

= $18,720

August 7

DR Inventory $440

CR Cash $440

(To record shipping costs of Inventory)

August 10

DR Accounts Payable $1,920

CR Inventory $1,920

(To record Purchase returns)

August 14

DR Accounts Payable $16,800

CR Inventory $168

CR Cash $16,632

(To record payment of purchases)

Working

Accounts Payable = Purchases - Returns

= 18,720 - 1,920

= $16,800

Inventory

Goods were purchased terms 1/10 meaning a 1% discount is goods paid for in 10 days.

= 1% * 16,800

= $168

August 23

DR Accounts Receivable $15,080

CR Sales Revenue $15,080

(To record sales of goods on account)

Sales Revenue = 58 devices * 260

= $15,080

August 23

DR Cost of Goods Sold $14,145.37

CR Inventory $14,145.37

(To record cost of Goods sold)

4 0

3 years ago

What ethical issues are faced by public managers who deal with contractors and with regulations of private-sector activities

tino4ka555 [31]

Answer:

Some of these ethical issues are

1. Wages or incentives

2. Discrimination among employees

3. Issues on health and safety of employees

4. And other internal issues that may come up in the company or organization.

Explanation:

While dealing with contractors, a public manager is likely to have the issues above with contractors so he has to learn to tolerate and must also not show any form of discrimination against any employee or show any preferential treatment to any selected worker. He has to employ tact's when dealing with contractors as well as when he is dealing with his employees.

5 0

4 years ago

Walter reached age 70 1/2 in September of 2018. By what date is he required to begin taking the RMD from his traditional IRA?A.

harina [27]

Answer: A. December 31, 2018

Explanation: RMD also known as required minimum distribution is a withdrawal one has to take from his or her retirement plan once he or she attains the age of 70and a half years old.

According to IRAs, once a person attains the age of 70.5 which is six months after the person's 70th birthday, the individual is entitled to take his or her RMD by the 31st of December following his or her 70.5 birthday.

According to the above question, Walter is entitled to take his RMD on the 31st of Dec, 2018.

3 0

3 years ago

Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investm

sammy [17]

Answer:

1) Accounting rate of return is 8.2%

2) Payback period is 5.95 years

3) Net present value (NPV) is ($88,643.26)

4) Option B

Explanation:

Initial Investment = $720,000 , Useful life = 10 years , Salvage Value = $100,000

Annual Net Income generated = $59,040 , Cost of capital = 14%

Depreciation = ($720,000 - $100,000) ÷ 10 = $62,000

Annual Cash flows = $59,040 + $62,000 = $121,040

1) Accounting rate of return = (Annual Net Income ÷ Average Investment) × 100

= (59,040 ÷ 720,000) × 100

= 8.2%

2. Payback Period = Initial Investment ÷ Annual Cashflows

= 720,000 ÷ 121,040

= 5.95 years.

3. PV of cash flows = 121,040 × PVAF(14% for 10 years)

= 121,040 × 5.2161

= $631,356.74

Less: PV of cash outflow = $720,000

Net present value (NPV) = (88,643.26)

4. If IRR = Discount rate, then NPV = 0

If IRR < Discount Rate, Then NPV is negative

If IRR > Discount Rate, Then NPV is positive

Here NPV is negative, so IRR is less than discount rate i.e.14%

5 0

4 years ago