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zzz [600]
3 years ago
7

An old bond's market value is above its par value, the bond is selling at a ________. this occurs because the old bond's coupon

rate is ________ the coupon rates of new bonds with similar risk. 1) premium; above 2) premium; below 3) discount; below 4) discount; above
Business
1 answer:
notka56 [123]3 years ago
3 0
The answers are; 1) Premium, above.

<em>Hope this helped! :)</em>
You might be interested in
King corporation owns machinery with a book value of $760,000. It is estimated that the machinery will generate future cash flow
Evgen [1.6K]

Answer:

King should recognize a loss on impairment of $60,000

Explanation:

In terms of IAS 36, Impairement happens when the Carring Amount of an Asset is <em>Higher</em> than the Recoverable Amount of an Asset.

<u>Recoverable Amount</u>

Recoverable Amount is the Higher of :

(a) Assets Value In Use, and

(b) Fair Value Less Cost to Sell

therefore:

Assets Value In Use = $700,000

Fair Value Less Cost to Sell = $560,000

therefore Recoverable Amount is $700,000 ( higher)

<u>Carrying Amount</u>

Book Value = Carrying Amount = $760,000

<u>Impairement Anaylsis</u>

Carrying Amount ($760,000) > Recoverable Amount ( $700,000)

Recognised Imparement loss is $60,000 ($760,000- $700,000)

4 0
3 years ago
Burke tires just paid a dividend of $2.42. analysts expect the company's dividend to grow by 30% this year, 20% next year (year
Ivanshal [37]

Answer:

There is no correct answer is these options. But the correct answer is $113.41

Explanation:

The formula to solve this is:

Po = D1/r - g

Po is the Current price of the common stock

D1 is the future dividend payment

r is the rate of return

g is the growth rate.

This is quite different from the usual(single stage). This is Two-stage Dividend Discount Model. To solve this;

D1(Dividend in year 1) is $3.15( $2.42 x 1.3)

D2(Dividend in year 2) is $3.78(3.15 x 1.2)

D3(Dividend in year 3) is $4.15($3.78 x 1.1)

D in subsequent years is $4.36(4.15 x 1.05)

P3(price of stock in year 3) = $4.36/0.083 - 0.05

=$132.12

Now the stock's current market value is

$3.15/1.08 + $3.78/1.08^2 + $4.15/1.08^3 + $132.12^3

The price of the stock is $113.41

4 0
3 years ago
Robert Klassen​ Manufacturing, a medical equipment​manufacturer, subjected 90 heart pacemakers to 5,000 hours of testing. Halfwa
scoray [572]

Answer and Explanation:

The computation is shown below:

a. For the percentage of failures is

= Number of failures ÷ number of pacemakers tested

= 4 ÷ 90

= 4.4%

b. For Number of failures per unit-hour of operating time

= Number of failure ÷ total time - non-operating time

= 4 ÷ (5,000 × 90) - (5,000 ÷ 2 × 4)

= 4 ÷ (450,000 - 10,000)

= 4 ÷ 440,000

= 9.09 × 10^-6

= 0.00000909 failure per unit-hour

c. For Number of  failures per unit-year is

= Failure ÷ unit year

= 0.0000090909 × 24 hours × 365 days

= 0.07963 failure per unit-year

5 0
2 years ago
Some people consistently make great investment decisions. Why?
zloy xaker [14]

The answer is D:both A and B

5 0
3 years ago
The Peoria Supply Company sells for $30 one product that it purchases for $20. Budgeted sales in total dollars for next year are
Alborosie

Answer:

The Peoria Supply Company

a. Schedule of Estimated Cash Collections:

Cash collections:                   July      

50% sales month              $25,500

less 2% cash discount             (510)

40% following month          16,800

8% second month                2,400

Total collections               $44,190

b. A Schedule of Estimated July Cash Payments for Purchases

                                      June         July

Sales                         $42,000    $51,000

Ending inventory         18,000*    27,000

Beginning inventory   21,000      18,000*

Estimated Purchases 39,000    60,000

Payment for purchases:

50% purchase month              $30,000

50% following month                 19,500

Total payment for purchases $49,500

c. Selling and administrative expenses

Non-Cash expenses:

Depreciation expense $1,667

Cash disbursements:

Other fixed costs          5,333

Variable costs               6,375

Total costs                 $13,375

Explanation:

a) Data and Calculations:

Selling price per product = $30

Purchase cost per product = $20

Total sales dollars for next year = $720,000

Month Sales Revenue

May         $30,000

June          42,000

July            51,000

August     54,000

July 1:

Cash balance = $20,000

Merchandise inventory $18,000

Accounts receivable (sales) 23,000

Accounts payable (purchases) 12,000

Ending inventory = $27,000 ($54,000 * 50%)

Ending inventory = 50% of next month's budgeted sales

Selling and administrative expenses (excluding bad debts) for the year = $180,000

Fixed costs = $90,000

Depreciation    20,000

Cash fixed costs = $70,000

Monthly fixed costs = $5,833

Variable costs = $90,000

Variable costs per sales dollars = $90,000/$720,000 = $0.125

Cash variable cost for July $0.125 * $51,000 = $6,375

a. Schedule of Estimated Cash Collections:

Cash collections:                May        June         July       August

                                      $30,000 $42,000   $51,000  $54,000

50% sales month             15,000    21,000    25,500     27,000

less 2% cash discount        (300)       (420)        (510)         (540)

40% following month                                      16,800     20,400

8% second month                                            2,400        3,360

2% Uncollectible

8 0
3 years ago
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