Answer: <u><em>Profitability index</em></u> is the financial method of analysis which will provide the information that the owner requests
This is an assessment technique inflicted to possible outlays. This splits the proposed capital flow by the planned capital outflow to find out the profitability of a project
<u><em>Therefore the correct option is (d).</em></u>
Answer:
The correct answer is option (B).
Explanation:
According to the scenario, the given data are as follows:
Bond carrying value = $1,470,226
Rate of interest = 8%
Rate of interest (Semiannual ) = 4%
So, we can calculate the the bond interest expense on the first interest payment by using following formula:
The bond interest expense = Bond carrying value × rate of interest (semiannual)
By putting the value we get
= $1,470,226 × 4%
= $58,809
The correct answer is B. Rural areas
Explanation:
High population densities, as well as high housing prices, are mainly found in cities or nearby areas as most jobs and industries are located in these areas. This increases not only the number of people that live in these zones but also the price of housing as the prices of properties are higher due to a higher demand. This means, zones such as inner-city neighborhoods, suburbs, and similar are highly populated and the house prices are high.
On the other hand, nowadays rural areas have a small population density because most people are not interested in living in rural areas as it would take more time to get to cities where jobs and major industries are. Similarly, the housing prices are lower because the demand or number of people interested in buying properties is lower, which makes general housing prices lower.
Answer:
I strongly believe that the requirement is to calculate the price of the bond.
The bond is worth $ 70,824,063.03
Explanation:
It is noteworthy that a rational would-be investor would pay for a bond a price that reflects the cash flows receivable from the bonds in future discounted to today's terms.
The future cash flows comprise of the semi-annual coupon interest of $4 million(10%/2 *$80 million) for 20 periods as well as the repayment of the principal $80 million at the end of period 20
Since coupon is paid every six months, the coupon would be twenty times over the life of the bond(paid twice a year for 10 years)
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 12% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading $ 70,824,063.03 present value today.
