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dedylja [7]
3 years ago
14

Union Local School District has bonds outstanding with a coupon rate of 3.4 percent paid semiannually and 19 years to maturity.

The yield to maturity on these bonds is 3.6 percent and the bonds have a par value of $5,000. What is the price of the bonds? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price $

Business
1 answer:
Talja [164]3 years ago
8 0

Answer:

PV = $4,863.24

Explanation:

Computation of the given data are as follows:

Face value = $5,000

YTM = 3.6%

YTM (Semiannual) (Rate) = 3.6% ÷ 2 = 1.8%

Coupon rate = 3.4%

Coupon rate semiannual = 3.4% ÷ 2 = 1.7%

Coupon payment ( Pmt) = 1.7% × $5,000 = $85

Time period (semiannual) (Nper) = 19 × 2 = 38

By putting the value in the financial calculator, we will get the present value.

Attachment is attached below.

PV = $4,863.24

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Harmony Company sells handminusknit scarves. Each scarf sells for $ 45. The company pays $ 70 to rent vending space for one day.
choli [55]

Answer:

2.12, rounded up to 3

Explanation:

To solve the equation, we first need to set up an equation.

Let x represent the number of scarves. We want one side of the equation to be the amount earned and the other to be the cost

45x is how much they earn since each scarf is $45

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5 0
3 years ago
oe Smith, age 75, from Vienna, IL has the winning Powerball lottery numbers which will pay out $13 million at the beginning of e
shutvik [7]

Answer:

The IRR is 5%. Rate of return would be 12.5% assuming a discount rate of 4%

Explanation:

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The question requires us to calculate the return that is the variable 'r'. For this you need to have the present value today so that you can then use the equation to solve for 'r'. However, the only information we have is the time period and the cash flow. We are given $200mn as the initial outlay. So, we can at least use this to calculate the internal rate of return (IRR) which is simply the rate of return (or the value of 'r') at which the present value of each of the 13 Mn to be received over the next 30 years is equal to the initial outlay (i.e 200mn). In short, IRR is the rate of return at which the net present value (NPV) is equal to zero. In our example, and using the formula for each of the cash flow from years 1 to 30, the IRR is computated at 5%. So if the discount rate that the company uses is less than 5%, the company would be better of with Joe accepting the offer because any discount rate below 5% would result in the present value of the cash flows to be in excess of $200Mn.

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