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3 years ago

A decrease in interest rates will:__________.

Business

1 answer:

Allisa [31]3 years ago

5 0

Answer:

c. not affect the bond's duration.

Explanation:

The bond duration measures the sensitivity of a bond's price to change in the interest rate. It is a linear measure of those years in which the repayment of the principal is due. the change in interest rate does not affect the duration of the bond.

On the other hand decrease in interest rate would increase the bond's PV and Price of the bond as well.

Payment frequency would not change with the decrease interest rate.

The Coupon rate will also remain the same whether the interest rate increases or decreases.

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You can buy property today for $3 million and sell it in 5 years for $4 million. (you earn no rental income on the property.)

Luden [163]

a. Rate of interest : 8%

Today’s Price = $3,000,000

Price after 5 years = $4,000,000

Present Value of price after 5 years = $4,000,000 / (1+0.08)^5

= $2,722,333.88

b. The property is not worth investing, since investing in the land is $3,000,000 while it can be sold today as $2,722,333, thus not a profitable investment as it will incur a loss of $277,667 ($3,000,000 - $4,000,000).

c. Present value of rent of 5 Years = $200,000*PVIFA(8%,5)

= $200,000*3.99999

= $798,542.01

d. NET PRESENT VALUE OF INVESTMENT = PRESENT VALUE OF FUTURE CASH FLOWS – INITIAL INVESEMTENT

NET PRESENT VALUE = $2,722,333.88 + $798,542.01 - $3,000,000

NET PRESENT VALUE = $520,874.80

Since the Net Present value is positive, it is worth investing in the land.

4 0

4 years ago

If ZipCar engaged in all the activities discussed in the video, but then sold customer data to a third party in a contradiction

Naya [18.7K]

Answer:

The correct option is: both socially responsible and ethical.

Explanation:

To begin with, the fact that the company sold customer data to a third party, even thought that it engaged in all the other activities as promised, it will make it to be both socially responsible and ethical and that is because in a court the judge will be in favour of the more weak party, that is the customer whose date was sold without his approval to a third party, and therefore that in social terms the company will be guilty. Also, that action will affect the company in terms of ethical because once that it is all known by the customers whose date was sold then they will start a campaign in order to destroy the company's ethical image by the public and that will cause a huge decrease in the sales.

5 0

3 years ago

The average debt incurred by a male pathological gambler in the US is between:

LiRa [457]

Answer:

$55,000 and $90,000

Explanation:

The average debt incurred by a male pathological gambler in the U.S. is between $55,000 and $90,000. The average rate of Norce for problem gamblers is nearly double that of non-gamblers.

3 0

3 years ago

In their evaluation of his performance as a trainer in the sales department of Pharmex, Heath's supervisors look at such factors

belka [17]

Answer: B. Job performance

Explanation:

Job performance simply means the level to which the job responsibilities of an employee is being successfully fulfilled by the person.

Since the factors being evaluated are the amount of time that the trainer spends with each of his trainees, the coverage of key points, his success rate in turning out trained salespeople within the amount of time allotted etc, then it can be infer that his job performance is being evaluated.

3 0

3 years ago

The Capitals Company has provided you the following information pertaining to the year ending December 31, 2018: January 1, 2018

Gelneren [198K]

Answer:

$223,000; $75,000

Explanation:

(a)

Balance:

= Equipment opening balance - Exchange for common stock - Scrapped equipment - Cost of equipment sale

= $575,000 - $25,000 - $5,000 - $39,000

= $506,000

Cash paid for equipment purchases:

= Equipment Ending Balance - Balance

= $729,000 - $506,000

= $223,000

(b)

Depreciation expense:

= Ending Balance - (Accumulated depreciation opening balance - Depreciation for scrap - Depreciation of equipment sale)

= 120,500 - ($165,000 - 52,500 - 67,000)

= 120,500 - 45,500

= $75,000

4 0

4 years ago