Answer:
B) $2,850
Explanation:
1: Find the discount: $3,000*5% = $150
2: Subtract the discount: $3,000 - $150 = $2,850
Answer:
Interest Rate Collar
Explanation:
This strategy called the Interest Rate Collar.
The Interest rate collar is an option that is used to hedge the interest rate exposure. It protects the borrower from the risk of increasing the interest rate and also decided a floor declining rate by purchasing an interest rate cap.
In the given scenario the Miami Bank will receive when the interest rate crosses the cap of 11% and pay when there is a decrease below the floor rate of 8% on the principal value.
Answer:
The overhead applied to each unit of W2 under Activity-Based Costing is closest to $518.81
Explanation:
Find detailed computation in the attached.
Answer:
Explanation:
1. NPV = -1,700,000 + 2,055,000 * (1-0.008) / 1.02
= $298,588.24
2. Yes order should be fulfilled
3. Break-even probability = 1 - 1,700,000 * 1.02 /2,055,000
= 1 - 0.843795
15.62%
Answer:
2560.50
Explanation:
For bond valuation, the investor would be willing to pay, at the most, the present value of the future income stream discounted at 2%. Thus, the value of the bond can be determined as follows:
Years 1 2 3 4 5 Total
Principal 1,350 1,450 2,800
Interest 0 0 0 0 0 0
Total inflow 0 0 1,350 1,450 2,800
[email protected]% 0 0 0 1,247 1,313 2,561
