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Anastasy [175]
3 years ago
12

Bonds are issued on June 1 that have interest payment dates of April 1 and October 1. Bond interest expense for the year ended D

ecember 31, 2009, is for a period of:
A. Three months.
B. Four months.
C. Six months.
D. Seven months.
Business
1 answer:
Natasha_Volkova [10]3 years ago
3 0

Answer:

D. Seven months.

Explanation:

Bond is defined as a debt instrument that shows the indebtedness big the bond issuer to the bond holder. They are units of cooperates debt issued by companies and they are tradeable. For example corporate bond and municipal bonds.

When a bond is issued on June 1 , with repayment of October 1 and April 1. The interest expense by October will be for 4 months.

However as at December 31, 2009 the accrued interest that will be recognised will be for October to December (that is for 3 months). Though it has not been paid it will be recognised at the end of the accounting period.

This gives a total of 7 months interest expense.

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Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal ta
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Answer:

Nissan's all-electric car, the Leaf

PV cost of Leaf Purchase =   $16,529

PV cost of Leasing =             $12,944.78

The company should lease the car.

Explanation:

a) Costs incurred to purchase the Leaf:

Base price                    $32,780

less Federal tax credit ($7,500)

Charging station             2,200

less 50% tax credit         (1,100)

Cash paid                  $26,380

Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)

Net PV Investment    $16,529

b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:

PV (Present Value) $12,944.78

N (Number of Periods) 3.000

I/Y (Interest Rate) 10.000%

PMT (Periodic Payment)   $4,200.00

Starting Investment $2,500.00

Total Principal $15,100.00

Total Interest $2,129.50

c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax.  The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%).  When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851).  On the other hand, leasing will cost in PV the sum of $12,944.78

.

6 0
3 years ago
You invest 50% of your money in security A with a beta of 1.6 and the rest of your money in security B with a beta of 0.7. The b
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Answer:

The answer is D). 1.15, hope this helps, have a great day/night, stay safe, happy thanksgiving!

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6 0
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klemol [59]

Answer:

Gap between the supply curve and the market price.

Explanation:

Producers surplus refers to the surplus that a producer of a commodity can obtain. The producers surplus is the difference between the producer's willingness to accept the price and the actual price they have received.

Producers surplus = Actual market price - Willingness to accept the price

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Benefits of setting objectives for a company
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