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blagie [28]
3 years ago
15

2. Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will

be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Business
1 answer:
Leto [7]3 years ago
8 0

Answer:

Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?

Explanation:

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g Let D1 represent the demand curve for premium seats to the Broadway hit Hamilton, and let S1 represent the supply curve for th
natali 33 [55]

Answer:

(a) $ 1200

(b) $ 702.5

Explanation:

In the demand and supply curve, the price of goods and services changes with respect to market conditions such as scarcity and consumers' needs. In the problem, if the producers charge about $497.50, the scalper will definitely charge a price higher than that of the producers, in this case, $1200. Thus, this is $702.5 (i.e. $1200 - $497.50) more than the producers' charge.

3 0
3 years ago
A manufacturer of printed circuit boards is considering purchasing a new surface mount technology component placement system. Tw
Darina [25.2K]

Answer:

R is a better alternative because it has a higher NPV than Q.

Explanation:

Machines                            Q                                  R

First costs                   $380,000                  $395,000

Net annual revenue $150,000 in year 1,      $152,500

                                  increasing by $500

                                   per year thereafter  

Salvage value               $4,000                             0

Life, years                           8                                 10

MACRS 7 year recovery:

year                    %                         Q                           R

1                      14.29%               54,302                  56,445.50

2                    24.49%               93,062                  96,735.50    

3                     17.49%               66,462                  69,085.50

4                     12.49%               47,462                  49,335.50

5                      8.93%               33,934                   35,273.50

6                      8.92%               33,896                  35,234.00

7                      8.93%               33,934                   35,273.50

8                      4.46%                16,948                    17,617.00

net cash flow

year                                    Q                           R

1                                     116,505.70                   118,880.93

2                                    130,396.70                  132,982.43    

3                                    121,411.70                     123,304.93

4                                    115,086.70                   116,392.43

5                                    110,676.90                    111,470.73

6                                    110,930.10                    111,456.90

7                                    111,326.90                     111,470.73

8                                    108,306.80                 105,290.95

9                                                                            99,125

10                                                                           99,125

Using a financial calculator, I calculated the NPV using a 12% discount rate:

  • Q's NPV = $200,636.15
  • R's NPV = $259,221.01

6 0
3 years ago
What is income elasticity onlyy
Lina20 [59]

Income elasticity of demand measures the receptiveness of the quantity demanded for a good or service to a change in income.

It's calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.

Explanation:

Hope this helps!!

8 0
3 years ago
Brandy’s Balloon Service currently sells 1,000 balloon bundles per month. The competition in the balloon industry continues to s
andreyandreev [35.5K]

Answer:

The answer is: 1,375 balloon bundles

Explanation:

We can calculate how many balloon bundles must be sold using the following formulas:

  • contribution margin per unit =  Selling price per unit – Variable cost per unit
  • Units = (Fixed costs + Target profit) / (contribution margin per unit)

Contribution margin per unit = $10 - $2 = $8

units = ($5,000 + $6,000) / $8 = $11,000 / $8 = 1,375 units

8 0
3 years ago
Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders?
myrzilka [38]

Answer:

The correct answer is d) Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries.

Explanation:

Option D. represents two situations that perfectly describe the interest that the shareholders pursue: the maximization of the profits of the company where they have their resources invested.

The shareholder, on the other hand, is also an investor, since he contributes capital with a view to obtaining a dividend.

Its investment is said to be in equities, given that there is no contract through which the shareholder will receive fixed fees in return for his investment. Their remuneration is through two ways:

  1. Dividend
  2. Increase in the price of the company. This is produced by its good progress and its ability to generate future benefits, as well as by the increase in assets through past benefits.
5 0
3 years ago
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