1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Crank
2 years ago
14

5. Suppose Hillard Manufacturing sold an issue of bonds with a 12-year maturity, a $1,000 par value, a 10% coupon rate, and semi

annual interest payments. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 5%. At what price would the bonds sell
Business
1 answer:
balandron [24]2 years ago
4 0

Answer:

Price of bonds = $1,389.73  

Explanation:

<em>The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV). </em>

Value of Bond = PV of interest + PV of RV

The value of bond for Hillard  can be worked out as follows:

Step 1  

<em>Calculate the PV of interest payments </em>

Semi annual interest payment

= 10% × 1,000 × 1/2 =50

PV of interest payment

A ×(1- (1+r)^(-n))/r

r- semi-annual yield = 5%/2 = 2.5%

n- 10× 2 = 20.

Note that the bonds now have 10 years to maturity because it was issued 2 years ago

PV on interest = 50 × (1-(1.025^(-20)/0.0425 = 779.45

Step 2

<em>PV of redemption Value </em>

PV = $1,000 × (1.025)^(-20) =   610.27

Step 3

<em>Price of bond </em>

=  779.45+  610.27 =  $1,389.73

Price of bonds = $1,389.73  

You might be interested in
A rectangular floor measures $a$ feet by $b$ feet, where $a$ and $b$ are positive integers with $b &gt; a$. An artist paints a r
DENIUS [597]

The number of possibilities that are there for the ordered pair is 2.

<h3>Calculation and Parameters
</h3>

Because the unpainted part of the floor covers 1/2 of the area, then the painted rectangle covers 1/2 of the area as well.

Given that the border width is 1 foot, the dimensions of the rectangle are a-2 by b-2.

Making an equation:

ab= 2((a-2)(b-2))

ab= 2ab-4a-4b+8

ab-4a-4b+8=0

If we apply Simon's Favorite Factoring Trick,

ab-4a-4b+16= 8

(a-4)(b-4)= 8

Since b > a, then we have the possibilities

(a-4) = 1 and (b-4) = 8, or (a-4) = 2 and (b-4) = 4.

(5, 12) or (6,8) which gives us 2 possibilities.

Read more about possibilities here:

brainly.com/question/25870256

#SPJ1

8 0
2 years ago
Financial statement data for years ending December 31, 2019 and 2018, for Edison Company follow: 2019 2018 Sales $513,500 $480,0
madam [21]

Answer:

The answer is

For 2018 - 1.5

For 2019 - 1.3

Explanation:

Asset turnover ratio=Net sales/average total assets

For 2018:

Sales - $480,000

Beginning asset - 360,000

Ending asset -360,000

Average total asset:

($280,000 + $360,000)/2

=$320,000

Therefore, asset turnover for 2018 is:

$480,000/$320,000

=1.5

For 2019:

Sales - $513,500

Beginning asset - $360,000

Ending asset - $430,000

Average total asset:

($360,000 + $430,000)/2

=$395,000

Therefore, asset turnover for 2019 is:

$513,500/$395,000

=1.3

5 0
2 years ago
Highway 151 Inc. can further process 2,500 pounds of Product C to produce Product M. Product C is currently selling for $36 per
Grace [21]

Answer:

$27,500

Explanation:

Revenue from the sale of  Product C = $36 × 2500

                                                             = $90,000

Cost to produce Product C = $14 × 2500

                                             = $35,000

Revenue from the sale of Product M = $47 × 2500

                                                              = $117,500

Differential Total Net Revenue of producing Product M

= $117,500 - $90,000

= $27,500

4 0
2 years ago
Read 2 more answers
Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2018: Factory rent $ 42,000
Doss [256]

Answer:

Results are below.

Explanation:

<u>1) Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.</u>

<u></u>

Direct material= Thread + Premium quality cotton material + Buttons

Direct material= 1,000 + 42,000 + 750

Direct material= $43,750

<u>2) Direct labor is production or service labor that is assigned to a specific product, cost center, or work order.  </u>

Direct labor= Wages paid to seamstresses  + Wages paid to cutters Direct labor= 75,000 + 50,000

Direct labor=  $125,000

<u>3) Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured</u><u>.</u>

Manufacturing overhead= Factory rent + Utilities for factory + Cutting room supervisor's salary + Factory insurance + Depreciation on sewing machines

Manufacturing overhead= 42,000 + 22,000 + 30,000 + 15,000 + 6,000

Manufacturing overhead= $115,000

4) Total manufacturing costs= 43,750 + 125,000 + 115,000

Total manufacturing costs= $283,750

5) Prime cost= direct material + direct labor

Prime cost= 43,750 + 125,000

Prime cost= $168,750

6) Conversion cost= direct labor + MOH

Conversion cost= 125,000 + 115,000

Conversion cost= $240,000

7) <u>Period costs are not directly tied to the production process</u>. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.

Period costs= Company advertising + Depreciation on salespersons' vehicles + President's salary

Period costs= 18,000 + 25,000 + 75,000

Period costs= $118,000

8 0
3 years ago
Match these statements with the appropriate reasoning fallacy below: Killing people is wrong, so the death penalty is wrong! How
WINSTONCH [101]

ADD ME I WILL SEND THE ANSWER AND PLS ADD A PICTURE

7 0
2 years ago
Other questions:
  • What is an example of a recreational goal??
    11·1 answer
  • Clement applies for a home loan at Global Bank Inc. As part of the process, he provides his personal details to the banker who i
    11·1 answer
  • Amber is working as a sales associate in a department store. When a few high-priced products are found missing from the store, A
    8·1 answer
  • Assume the position of a consultant hired to assess the approach toward HR management taken by a client organization. What facto
    15·1 answer
  • Games such as “peek-a-boo” are important for infants because they help babies develop _____________.
    7·1 answer
  • Names for clear lip gloss
    15·1 answer
  • On March 1, Wright Company purchased new equipment for $58,500 by paying cash. Other costs associated with the equipment were: t
    9·1 answer
  • Often general and special educators share the common goal of supporting students with disabilities in general education classroo
    7·1 answer
  • Mia received a credit card offer in the mail. The credit card has an annual percentage rate of 26%. What is the approximate mont
    10·1 answer
  • Privacy act of 1974, the US government is prohibited from storing many types of data about US citizens. The act does NOT prohibi
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!