Answer:
The correct answer is $479,500.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the total revenue by using following formula:
Total revenue = Net sale + Dividend revenue + Rent revenue
Where, Net sales = Sales revenue - Sales return
= $445,000 - $34,000 = $411,000
By putting the value in the formula, we get
Total revenue = $411,000 + $10,500 + $58,000
= $479,500
1) Answer: When the required return is equal to the coupon rate, the bond value is equal to the par value,
2) if the required return is less than the coupon rate the bond will sell at a premium.
Explanation:
1) The reason for this that the required return is the market or investors required rate of return for a particular bond, when the required rate and coupon rate are equal it means that the investor is getting the return he wants in coupon payments, therefore the investor will be willing to buy the bond on par value, as he is getting his required return in the form of coupon payments.
2) When the required return is less than the coupon rate the investor is getting more in coupons than he required from the bond so the bonds price will be higher than par so that the return from the coupons become equal to the required rate of return. Thats why when a bonds required return is less than the coupon it sells on a premium.
A higher interest rate is one economic mechanism by which government borrowing can crowd out private investment. This is further explained below.
<h3>What is the economic mechanism?</h3>
Generally, A mechanism is a mathematical representation of the organizations that govern and coordinate economic activity.
In conclusion, Increasing the interest rate is one of the ways in which the government may stifle private sector investment. This will be detailed in further detail in the following paragraphs.
Read more about the economic mechanism
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Answer:
The value of the project today is $75,866
Explanation:
Net present value is the Net value all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.
Years 1 2 3
Cash Flows $32200 $41800 $22,900
Discount Factor 14% 0.8772 0.7695 0.6750
Present Values $28,245.61 $32,163.74 $15,456.85
Net present value = $75,866.20
Municipal bonds are debt obligations issued by states, cities, counties and other governmental entities.
