Which person would suffer the most from inflation?

At the present time, Andalusian Limited (AL) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. The

JulijaS [17]

Answer:

After tax cost of debt is 6.45%

Explanation:

In computing the after tax cost of debt, the starting point would be to ascertain the pre-tax cost of debt-yield to maturity-before applying the tax.

The yield to maturity can be calculated using the rate formula in excel ,given as :=rate( nper,pmt,-pv,fv)

nper is the nuer of coupon interest the bond would pay which is 20

pmt is the annual payment of the bond which is 13%*$1000=$130

pv is the current price of the bond $1,181.96

fv is the face value of the bond which is $1000

=rate(20,130,-1181.96,1000)

rate=10.75%

Pretax cost of debt is 10.75%

After tax cost of debt=pretax cost of debt*(1-tax rate)

tax rate is 40%=0.4

=10.75%*(1-0.4)

=6.45%

7 0

3 years ago

Miracle Clean's variable costs are $3.00 per bottle and Fixed Expenses are $350,000 per year. The company currently sells 150,00

DerKrebs [107]

Answer:

131,250= number of units

Explanation:

Giving the following information:

<u>We need to calculate the number of units to be sold to maintain a profit of $175,000.</u>

Unitary variable cost= $3

Fixed expenses= $350,000

Selling price= $7

Net income= total contribution margin - fixed cost

175,000= number of units*(7 - 3) - 350,000

525,000 = number of units*4

525,000 / 4= number of units

131,250= number of units

7 0

3 years ago

In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as defe

galben [10]

Answer:

Ryan Management

Journal Entries

Date Particulars Debit'million Credit'million

31-Dec-22 Income tax expense $219.50

To Income tax payable $190

($760 * 25%)

To Deferred tax asset $29.50

[($194 - $76)*25%]

(To record income tax expense and reversal of Deferred

tax asset)

6 0

3 years ago

Vaseline, the world's most famous—and priciest—brand of petroleum jelly, wants to improve its financial performance (i.e. revenu

ohaa [14]

Answer:

Please consider the following explanation

Explanation:

Vaseline can improve its financial performance by doing some product differentiation, as the rest 15% are also selling petroleum jelly but at much lower costs than Vaseline, and to convince its customers to spend extra bucks to buy Vaseline, it needs to provide something extra.

Vaseline can incorporate extra ingredients like aloevera, or turmeric, etc, i.e. the beauty or health fashions prevalent in the market this information can be obtained by a thorough research of the beauty blogs available online.

Once the product has something extra, Vaseline can go ahead and market its product better based on the benefits of the product differentiation, and hence steam away market from the remaining 15% and increase its financial performance.

6 0

3 years ago

You have found an asset with an arithmetic average return of 14.60 percent and a geometric average return of 10.64 percent. Your

Ksju [112]

Answer:

return of the asset = 13.94%

return of the asset = 13.11%

return of the asset = 11.46 %

Explanation:

given data

average return = 14.60 percent

geometric average return = 10.64 percent

observation period = 25 years

solution

we get here return of the asset over year by Blume formula that is

return of the asset = ( T- 1 ) ÷ ( N - 1) × geometric average + ( N -T) ÷ ( N - 1) × arithmetic average ..................1

here N is observation period and T is time

put value in equation 1

return of the asset = $\frac{5-1}{25-1} *0.1064 + \frac{25-5}{25-1} * 0.1460$

return of the asset = 0.1394 = 13.94%

and

return of the assets = $\frac{10-1}{25-1} *0.1064 + \frac{25-10}{25-1} * 0.1460$

return of the asset = 0.13115 = 13.11%

and

return of the assets = $\frac{20-1}{25-1} *0.1064 + \frac{25-20}{25-1} * 0.1460$

return of the asset = 0.11465 = 11.46 %

6 0

3 years ago