Answer:
PV(after-tax net return in 7th year) = 70.55 (Approx)
Explanation:
Given:
Number of year = 7
Pre-tax net returns (Fn) = $100
Growth rate = 4% = 0.04
Inflation = 3% = 0.03
Marginal tax rate = 30% = 0.3
Discount rate = 10% = 0.1
Computation:
Fn = Fo(1+g)ⁿ = 100(1.04)⁷
Fn = 131.6
Nominal net returns = 131.6(1.03)⁷
Nominal net returns = 161.85
After tax return = 161.85 (1 - 0.3)
After tax return = 113.30
After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%
PV(after-tax net return in 7th year) = 113.30
(1+0.07)⁻⁷
PV(after-tax net return in 7th year) = 70.55 (Approx)
Answer:
C. The coupon rate on these bonds would have been higher if Standard and Poor's, Moody's, and Fitch had assigned lower credit ratings
Explanation:
Assume that in January 2017, Vivendi announced a €1.2 billion bond issuance. The bonds have a coupon rate of 6.75% payable semiannually. Assume the bonds have been assigned credit ratings of BBB (stable outlook) by Standard and Poor's, Baa2 (stable outlook) by Moody's, and BBB (stable outlook) by Fitch.
Which of the following is not true? The coupon rate on these bonds would have been higher if Standard and Poor's, Moody's, and Fitch had assigned lower credit ratings.
Answer:
The answer is "Choice d"
Explanation:
The Advertising Mix is the integration of publicity, personal selling, advertising, and marketing. To maintain a sustainable mix of those promotional resources, advertisers need to look only at the following questions. It really is the company's promotional software. With the assistance of the marketing manager and a 3rd parties advertiser, they sell the offering.
Answer:
- b. Cash from Financing Activities
- d. Bonds Payable
- e. Net Income
Explanation:
Bonds are a form of long term debt and in the cashflow statement this goes to the Financing section. A retirement of bonds would reduce cash and this would come from the Financing activities.
Bonds Payable will also decrease because the bond that is being retired will reduce the number of bonds payable that the company has to pay off.
Finally the Net income will reduce as well to reflect the loss on bond retirement. The bonds were issued at a discount owing to interest rates being higher than the coupon rate in 2011 but on the day the bonds were retired they were selling at a premium with interest rates at 4%. The company paid more than they received and this loss will reduce the net income.
Answer:
There will be an increase of $6,200 , If the special order is accepted
Explanation:
For computing the net income effect first we have to find out the net income per scale which is a difference between offer purchase price and variable cost per unit
In mathematically,
Net income = Offer purchase price - variable cost per unit
where,
Offer purchase price is $35
And, the variable cost is $12 per unit plus it incur special shipping charges which is also a part of the variable cost.
So, total variable cost = variable cost per unit + Special shipping charges per scale
= $12 + $1
= $13
So, Net income is
= $15 - $13
= $2 per unit
Now for producing the 3100 scales, the net income should be multiply with the production unit
= Net income × Production unit
= 3,100 × 2
= $6,200
Fixed cost is fixed whether the production level changes or not. Thus, it is not be considered.
Hence, there will be an increase of $6,200 , If the special order is accepted
