Answer:
In order to find the present value of the bond we have to calculate the present value of investment A and subtract is from 1529. We can find the present value of A by discounting all its cash flows.
As the first cash flow is received today and the last will be received 3 years form now there will be a total of 4 cash flows
1) 218.19 (Will not be discounted as we are receiving it today in the present)
2) 218.19/1.0987 (Discount by 1 year as cash will be received in 1 year)
3) 218.19/1.0987^2 (Discount by 2 years as cash will be received in 2 years)
4) 218.19/ 1.0987^3 (Discount by 3 years as cash will be received in 3 years)
= 218.19 + 198.58 + 180.74+ 164.51 = 762.02
PV of Bond = 1529-762.09= 766.91
Semi annual coupons mean 2 payments a year. Bond B matures in 23 years which means a total of 46 payments (23*2). N=46. A coupon rate of 6.4 percent means that the bond pays $64 (0.064*1000) each year. $64 divided by 2 is 32 which is the amount of each semi annual payment Arjen receives. Pv= 766.91 FV = 1000
In a financial calculator put
PV= -766.91
N= 46
FV=1000
PMT= 32
and compute I
I is 4.38 and we will multiply it by 2 because the payments are semi annual. So we will get an I of 8.76
YTM= 0.0876
Explanation:
Answer:
$11,880,000
Explanation:
Depletion is an estimated cost of a natural resource that is extracted. This resource is expensed as the extraction is made.
As per given data
Value of Rights = $60,000,000
Land Value = $600,000
As we know land does not depreciate or depleted.
Depletion Value = $60,000,000 - $600,000 = 59,400,000
Estimated resources = 9 million units
Resources extracted in the period = 1.8 million units
Depletion expense is based on ratio of the amount of extraction in period to the total expected resource.
Depletion Expenses = $59,400,000 x 1.8 million units / 9 million units = $11,880,000
Answer:
The risk free rate is 3.325%
Explanation:
The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
- (rM - rRF) gives us the risk premium of market
We already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,
Let rRF be x.
0.1185 = x + 1.24 * (0.102 - x)
0.1185 = x + 0.12648 - 1.24x
1.24x - x = 0.12648 - 0.1185
0.24x = 0.00798
x = 0.00798/0.24
x = 0.03325 or 3.325%
Answer:
Find attached complete question with the multiple choices:
The correct answer is false
Explanation:
The statement implies that in an hospitality business,13% to 16% of the guests checked in, in order to be served for free.
Hospitality business sector prouds itself in having clients that have taste and want value for money,this is evident in their ability to make payments for hotel reservations prior to arrival,as a result ,it would be out of place to say 13% to 16% of such individuals want free service.
Everyone knows that such luxury of service comes at a premium price,it is not in anyway similar to buying a course online where to some extent you enjoy a free service(freemium) and expected to pay for any service above the minimum.
All in all,hospitality is pay as you go.
A and c because jack knows how to do his work
