Answer:
Year Cashflow [email protected]% PV [email protected]% PV
$ $ $
0 (1,100) 1 (1,100) 1 (1,100)
1-8 47.4 5.3349 252.87 7.0197 332.73
8 1,000 0.4665 465.5 0.7894 789.4
NPV (381.63) NPV 22.13
Kd = LR + NPV1/NPV1+NPV2 x (HR – LR)
Kd = 3 + 22.13/22.13 + 381.63 x (10 – 3)
Kd = 3 + 22.13/403.76 x 7
Kd = 3 + 0.38
Kd = 3.38%
Explanation:
Cost of debt is calculated based on internal rate of return formula. In year 0, we will consider the current market price of the bond as cashflow. In year 1 to 8, we will consider the after-tax coupon as the cashflow. The after-tax coupon is calculated as R(1 - T). R is 6% x $1,000 = $60 and tax is 21%. Thus, we have $60(1 - 0.21) = $47.4. then we will discount the cashflows for 8 years so as to obtain the internal rate of return. The internal rate of return represents cost of debt.
As credits increase revenues, so debits increase expenses.
<h3>What are debits and credits?</h3>
Debits and credits are accounting terms used in recording financial transactions in the accounting system. Debits are used to <u>increase</u> assets and expenses or <u>decrease</u> liabilities or equity, while credits <u>increase</u> revenues and equity or <u>decrease</u> assets and expenses.
Thus, whereas credits increase revenues, debits increase expenses.
Learn more about credits and debits at brainly.com/question/2707498
To solve for the consumer surplus, the formula is;
Consumer surplus = total value – actual value
If jena is willing to pay for $75 then = $75 – $65 = $10
If Jane on the other hand is willing to pay for $85 then =
$85 - $65 = $20
To combine the amount of Jena and Jane to be able to get
both of their consumer surplus,
= $10 + $20 = $30
The combined amount of consumer surplus of Jena and Jane is
$30.
Answer:
a. 0.75
b. elsa can expect to gain money. 0.75$
Explanation:
x = 1/6 = 0.166667
given an outcome of 1,
1$ win * 0.166667 = 0.166667
given an outcome of 2,
$2 win * 0.166667 = 0.33333
given an outcome of 3,
$3 win*0.166667 = 0.5
remember that if she has an out come of 4, 5 and 6 she loses 0.5 dollars
given an outcome of 4,
-$0.5 * 0.166667 = -0.083333
given an outcome of 5,
-$0.5 * 0.166667 = -0.083333
given an outcome of 6,
-$0.5 * 0.166667 = -0.083333
The expected value of playing the game = 0.166667+0.333333+0.5-0.083333-0.083333-0.083333
= 0.750001
<u>expected value of plying game = 0.75</u>
<u></u>
b. in the long run, after playing the game many times, Elsa can expect to gain money. she can expect to win 0.75$ per role. option 1
Answer:
Reorder point
Explanation:
A company or organization making use of fixed-order quantity model which is a model where the REORDER POINT has been fixed and has already been set automatic in which once it reach the minimum inventory level it will remind the company that inventory level has reach the limit for the company to restore the stock inventory or order more product, which is why this inventory level is called the REORDER POINT.
Therefore REORDER POINT can be defined as the point which serve as a reminder that the stock inventory level has dropped to the minimum reorder level and need to be replaced or reorder.