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aleksandrvk [35]
2 years ago
13

Ben owns investment A and 1 bond B. The total value of his holdings is $2,800. Bond B has a coupon rate of 8.80 percent, par val

ue of $1000, YTM of 9.40 percent, 14 years until maturity, and semi-annual coupons with the next coupon due in 6 months. Investment A is expected to pay annual cash flows to Ben of X per year forever with the first annual cash flow expected in 1 year from today. The expected return for investment A is 7.91 percent. What is X, the fixed annual cash flow that will be paid forever by investment A?
Business
1 answer:
NeTakaya2 years ago
6 0

Answer:

Bond B

PV= ?

FV=$1000

YTM = 9.40/2=4.70

N=14*2= 28

PMT= 8.8%*1000/2=44

Put values in financial calculator

PV=$953.8

Price of Investment A= 2800-953.8=1846.2

Investment A = Perpetuity, formula for perpetuity is Present Value= Cash Flow/Interest Rate

1846.2=Cash flow/0.0791

Cash Flow= 1846.2 *0.0791

=$146.03

Explanation:

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Granfield Company is considering... Granfield Company is considering eliminating its backpack division, which reported an operat
torisob [31]

Answer:

$275,700 Decrease

Explanation:

Calculation to determine what The impact on Granfield's operating income for eliminating this business segment would be:

Using this formula

Impact on Operating income=Saving in Relevant fixed cost -Loss of Contribution Margin of backpack division

Let plug in the morning

Impact on Operating income=($530,000*40%)-($965,700-$478,000)

Impact on Operating income=$212,000-$487,700

Impact on Operating income=$275,700

Decrease in net Operating income

Therefore The impact on Granfield's operating income for eliminating this business segment would be:$275,700 Decrease

7 0
3 years ago
How does a payroll accountant use the information in the General Ledger? (You may select more than one answer. The account balan
son4ous [18]

Answer: General Leger account balances aggregate data to determine payroll costs .

The account balances form the basis for accounting reports.

Explanation: a General ledger is defined as the central accounting record of a company or organization consisting of the accounts that support the value items shown in the major financial statements.

The general ledger provides information of accounting reports which in turn is used to balance aggregate data to determine payroll costs .

4 0
3 years ago
Lisa is choosing between three alternatives:
Y_Kistochka [10]

Opportunity cost is something you gave up to do the other thing you want to do. This is basically the loss of potential gain you can have on a certain alternative because of choosing the other alternative. In this problem, the opportunity cost of writing the term paper is $140 dollars. This can be break-down as follows: 

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<span>b. $80 opportunity cost she has given up for not going out with a friend</span>

7 0
3 years ago
Read 2 more answers
Determine which of the following bags of chips of comparable quality has the lowest per-unit cost and, thus, is the best buy.A.
Leto [7]

Answer:

B. Brand B, 10 oz. bag for $3.90

Explanation:

The lowest per unit cost of different brands can be calculated using the following formula

Cost per oz=Cost per bag/number of oz in that bag

Brand A Cost per oz=3.60/8=$0.45

Brand B Cost per oz=3.90/10=$0.39

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So the answer is B. Brand B, 10 oz. bag for $3.90

5 0
2 years ago
Arundel Company disclosed the following information for its recent calendar year. Income Statement Data Selected Year-End Balanc
NemiM [27]

Answer:

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net loss                                                                                   -$16,000

Adjustment made:

Add : Depreciation expense $14,600

Add: Decrease in accounts receivable $24,000  

Add: Increase in salaries payable $18,000

Less: Decrease in accrued liabilities -$8,000

Total of Adjustments $48,600

Net Cash flow from Operating activities                                $32,600

4 0
3 years ago
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