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yan [13]
3 years ago
6

David purchased a $5,000 bond on the secondary market. He paid a $500 premium. What is David's basis?

Business
1 answer:
Pavel [41]3 years ago
5 0

Answer:

David's basis on the $5,000 bond purchased is:

C. $5,000.

Explanation:

a) Data and Analysis:

Cost of Investment in bond = $5,000

Premium paid = $500

b) David's basis on the bond is the quoted price of the bond, which is a security investment.  It is on this basis price that future interest will be calculated.  The additional $500 as premium he paid is just an additional cost which he incurred in exchange for his interest in the bond.  It does not form part of the basis.

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New Body, a gym, bought new exercise equipment on credit. The purchase price was $10,438.88. They secure the loan with a financi
LiRa [457]

Answer:

b. $524.94

Explanation:

We need to solve for the PTM of a 6 year annuity with quarterly payment discount for 6.25% compounding quarterly as well:

PV \div \frac{1-(1+r)^{-time} }{rate} = PTM\\

PV $10,438.8800

time 24 (6 years x 4 quarter per year)

rate 0.015625 8 ( 0.0625 / 4 )

The payment every quarter will be for:

10438.88 \div \frac{1-(1+0.015625)^{-24} }{0.015625} = PTM\\

PTM  $ 524.942

4 0
3 years ago
Why is the price elasticity of demand for coca-cola greater than the price elasaticity of deman for soft drinks generally?
wolverine [178]

A soft drink's price elasticity of demand is lower than Coca-Cola's, which is more sensitive to price. This is due to the ease with which consumers can switch from Coca-Cola to other comparable soft drink alternatives, such as Pepsi.

  • However, it would be challenging to replace soft drinks as a whole with alternative products. The price elasticity of demand for soft drinks, in general, is lower than the price elasticity of demand for Coca-Cola because there are no other close substitutes for them.
  • The quantity required of a thing or service changes in response to a change in the product's price, and this is measured by the price elasticity of demand. It is computed by subtracting the product's price change from the quantity demanded, divided by the product's price change.
  • Because the quantity of Coca-Cola products demanded frequently changes when prices vary, these products are thought to have an elastic demand.

Know more about coca-cola:

brainly.com/question/14602871

#SPJ4

7 0
1 year ago
Wrigley introduced a new flavor of Orbit brand sugar-free chewing gum, mint mojito, and its introductory price was low so that i
Julli [10]

In this example, Wrigley used the Penetration pricing.

Penetration pricing is one of marketing strategy which aims to attract potential customers by offering lower price as its initial offering.

This pricing strategy helps a new product or service to penetrate the market and attract customers because of the low price offered.

In the question, the introductory price for chewing gum, mint mojito were set low and aims to attract new customers to the product.

In conclusion, Wrigley used the Penetration pricing to attract new customers.

Read more about this here

<em>brainly.com/question/3521758</em>

3 0
3 years ago
Factors affecting communication in a an organization
iVinArrow [24]

FACTORS AFFECTING COMMUNICATION

Status / Role.

Cultural differences .

Choice of communication channel .

Length of communication .

Use of language .

Individual Perceptions / Attitudes / Personal

3 0
3 years ago
When a US company purchases and imports wood from Brazil to use to build new houses, within the United States, this purchase inc
Mariana [72]

Answer:

The correct answer is 2. No overall change.

Explanation:

The aggregate demand is the total goods and services demanded by a country, at a certain price level, in a certain period of time.

The aggregate demand that can be accounted for measures exactly the same as GDP. So they are often used as synonyms.

To calculate aggregate demand, the same methods as for calculating GDP can be used, however, aggregate demand is associated with expenditure, so it is calculated by the product method, that is, from the point of view of what society has spent. This calculation takes into account the expenditure of families (private individuals), what has been spent on investment, the cost of public administrations, and finally, net exports, which is the difference between imports and exports In this way, the Aggregate Demand formula would look like this:

DA = C + I + G + (X-M)

3 0
3 years ago
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