<span><span>Interest is...The amount owed for borrowing money.</span><span>Which payment type can help you stick to a budget?Debit cards</span><span>If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for?<span>Low APR</span></span></span>
Answer:
$955.37 per bond
Explanation:
Callable bonds are generally worth less than normal bonds since the call option decreases the value of the bondholder while increases the value of the issuer. Bonds will only be called if the interest rate falls below a certain level and calling them is cheaper (form the issuer's point of view) than keep paying high interest rates.
market price of callable bonds:
- PV of face value = $1,000 / (1 + 5%)¹⁰ = $613.91
- PV of coupon payments = $80 x 7.7217 (PV annuity factor, 5%, 10 periods) = $617.74
- Price of call option = [(1 + 5%)⁵ x $1,000] - $1,000 = $1,276.28 - $1,000 = $276.28
current market price of callable bonds = $613.91 + $617.74 - $276.28 = $955.37
Answer:
C
Explanation:
An increase in underdeveloped countries cannot be the reason why businesses would expand abroad because there wont be as much potential buyers in underdeveloped economies as they have very low capita income and most of the residents live in very poor conditions. But however other options are valid because favorable trade agreements and developed transportation and IT makes the international trade easy and beneficial to both the buyer and the seller. Moreover, when domestic markets matures, the rate of growth slows down and falls to zero. this is when the businesses want to emerge and find new markets abroad in order to benefit from the trade as in matured market there is less chance for businesses to grow and it becomes risky
Solution :
We know that the exchange takes place when the FMV receive is equal to the FMV given up.
Where the FMV = fair market value
The commercial substance means the future cash flows exchange.
The non monetary exchange refers to the cash which is less than 25% of the fair value exchange.
The journal entries for the Santana Corp. when the exchange lack the commercial substance are reported as :
Transaction Debit ($) Credit ($)
Asset(new) 11,000
Accumulated depreciation(old) 9,000
Asset (old) 28,000
Cash 2000
The journal entries for Delaware Corp. when the exchange lacks the commercial substance.
Transaction Debit ($) Credit ($)
Asset(new) 16,000
Accumulated depreciation (old) 10,000
Loss 2500
Assets (old) 28,000
