Morin company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The mark
et requires an interest rate of 6.1% on these bonds. What is the bond's price? a. $1, 024.74 b. $1, 147.71 c. $1, 116.97 d. $1, 280.93 e. $1, 096.47
1 answer:
Answer:
a. $1,024.74
Explanation:
In this question, we use the present value formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Future value or par value = $1,000
Rate of interest = 6.1%
NPER = 8 years
PMT = $65
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the answer would be $1,024.74
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Answer:
Gross Profit = $5,172
Explanation:
For the information provided,
Manufacturing overhead at an activity level of 10,000 machine hours = $400,000
Thus, overhead per hour = $400,000/10,000 = $40 per hour
Direct material = $1,000
Direct labor cost = $1,500
Total manufacturing cost allotted = $40 23 = $920
Total direct cost = $1,000 + $1,500 + $920 = $3,420
Sales revenue = $716 12 = $8,592
Gross profit = Sales - Cost = $8,592 - $3,420 = $5,172