Answer:
a. 4 years
b. 19 years
c. 19 years
d. 25 years
Explanation:
The number of years, n is calculated for each future value as follows :
a. $1,360
Pv = - $1,000
Pmt = $ 0
P/y = 1
r = 8 %
Fv = $1,360
n = ?
Using a Financial Calculator, the number of years, n is 3.9953 or 4 years
b. $2,720
Pv = - $1,000
Pmt = $ 0
P/y = 1
r = 8 %
Fv = $2,720
n = ?
Using a Financial Calculator, the number of years, n is 13.00 or 13 years
c. $4,316
Pv = - $1,000
Pmt = $ 0
P/y = 1
r = 8 %
Fv = $4,316
n = ?
Using a Financial Calculator, the number of years, n is 19.00 or 19 years
d. $6,848
Pv = - $1,000
Pmt = $ 0
P/y = 1
r = 8 %
Fv = $6,848
n = ?
Using a Financial Calculator, the number of years, n is 24.9991 or 25 years
Answer:
5.14%
Explanation:
Determining the pretax cost of debt is the first to do prior to ascertaining after tax cost of debt.
Pretax cost of debt can be computed using the rate formula in excel.
=rate(nper,pmt,-pv,fv)
nper is the number of times the bond would coupon interest,hence paying coupon every six months for 20 years means 40 coupon payments
pmt is the semiannual coupon bondholders would received from the bond i.e $1000*7.25%*6/12=$36.25
pv is the current market price at $875
fv is the face value of $1000
=rate(40,36.25,-875,1000)=4.28% semiannually
=4.28%
*2=8.56% annually
after tax cost of debt=8.56%*(1-t),where t is the tax rate of 40% or 0.40
after tax cost of debt=8.56%*(1-0.4)=5.14%
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A <u>time-share</u> operates like an exclusive-use site but it is leased in conjunction with a business partner or sister organization.
Explanation:
- Time-share is one of the shared-use resumption strategy.
- It is the leased site shared with organizations to provide assistance in case of disasters.
- More than one organization may use the site simultaneously.