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Mkey [24]
3 years ago
12

A bond that pays interest annually yielded 7.25 percent last year. The inflation rate for the same period was 5.50 percent. What

was the actual real rate of return on this bond for last year?
Business
1 answer:
kvasek [131]3 years ago
5 0

Answer:

Actual real rate of return = 1.658768 (Approx)

Explanation:

Given:

Nominal rate of return = 7.25% = 7.25 / 100 = 0.0725

Inflation rate = 5.50% = 5.50 / 100 = 0.055

Actual real rate of return = ?

Computation of actual real rate of return :

Actual real rate of return = [(1+Nominal rate of return)/(1+Inflation rate)] - 1

Actual real rate of return = [(1+0.0725)/(1+0.055)] - 1

Actual real rate of return = [(1.0725)/(1.055)] - 1

Actual real rate of return = [1.01658768] - 1

Actual real rate of return = 0.01658768

Actual real rate of return = 1.658768 (Approx)

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Increased pressure for conformity to the various communities causes. Speical interest groups such as PETA or various Climate change special interest groups might call out a company for not doing enough to combat their adverse impact and might result in BAD publicity. So companies give into their corporate social responsibilites.

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Sheffield Realty Corporation purchased a tract of unimproved land for $115,500. This land was improved and subdivided into build
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4 0
3 years ago
A brewery produced regular beer and a low carb "light beer". Steady Customers of the brewery buy 10 units of regular beer and 15
Svet_ta [14]

Answer:

                                                Regular     Low Carb      Total

a) Units to be produced               20              22             42

(to minimize total production cost)

b) Total production costs    $704,000   $1,150,000   $1,854,000

Explanation:

a) Data and Calculations:

                                                Regular     Low Carb

Monthly customers demand         10              15

Ratio of customers demand        40%           60%

Cost per unit                           $32,000      $50,000

Revenue per unit                    120,000      300,000

Contribution per unit            $88,000    $250,000

Total required revenue = $9,000,000

With 20 additional units of beer, total units produced = 45 (25 + 20)

To minimize production costs and generate a total revenue of $9,000,000, more of the units that cost less should be produced.  Units should be produced according to the following ratio:

                                                   Regular       Low Carb       Total

New Production and Sales units  20                   22             42

                                         

Total production cost =       $640,000         $1,100,000         $1,740,000

                                       ($32,000 * 20)       ($50,000 * 22)

Total revenue =               $2,400,000        $6,600,000     $9,000,000

                                      ($120,000 * 20)      ($300,000 * 22)

To achieve a minimum revenue of $9,500,000,

New production units                  22                   23                  45

Total production cost =     $704,000         $1,150,000        $1,854,000

Total revenue =                2,640,000         6,900,000         9,540,000

3 0
3 years ago
Advanced Enterprises reports year−end information from 2019 as​ follows: Sales​ (160,250 units) ​$969,000 Cost of goods sold ​(6
Ilya [14]

Answer:

Cost of goods sold = $576,900

Explanation:

The budgeted cost of goods sold will be the sales volume in 2020 multiplied by cost per unit .

Sales volume in year 2020= (100-10)% ×  sales figure for 2019

                                            = 90% × 160,250=  144,225  

Cost of goods sold per unit =  cost of goods sold in 2019/Sales units in 2019

                                              = 641,000/160250=$4

Cost of goods sold =  $4× 144,225 =  $576,900

Cost of goods sold = $576,900

3 0
3 years ago
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