g The price elasticity of gasoline demand in the United States is 0.4 If the price of gasoline rises by 8 what is the expected c
1 answer:
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Answer:
Kindly check attached picture
Explanation:
Given the following :
2013 2014 2015
Cash receipts from sales:
On 2013 sales 293,430 166,990 39,820
On 2014 sales 361,040 94,750
On 2015 sales 409,660
Cash payments for expenses:
On 2013 expenses 191,910 68,8703 4,880
On 2014 expenses 45,320 a176,560 55,130
On 2015 expenses 47,250 b222,210
Kindly check attached picture for detailed explanation
Answer:
When using a financial calculator to compute the issue price of the bonds, the applicable periodic interest rate ("I") is 3.923%
Explanation:
Hi, first, the discount interest rate that you have to choose is 8%, because 9% is the coupon rate (which in our case would be 9%/2=4.5% and this is used only to find the amount to be paid semi-annually).
Now we know we have to choose 8%, but this is an effective rate (I know this is an effective rate because no units were mentioned), and by definition it is a periodic rate, but it is not the rate that we need since the payments are going to be made in a semi-annual way, therefore we need to use the following equation.
So, everything should look like this.
Therefore, the periodic interest that yuo have to use to calculate the price of the bond is 3.923%
Best of luck.