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ivann1987 [24]
2 years ago
8

An investor thought that market interest rates were going to decline. He paid $19,000 for a corporate bond with a face value of

$20,000. The bond has an interest rate of 10% per year payable annually. If the investor plans to sell the bond immediately after receiving the 4th interest payment, how much will he have to receive in order to make a return of 14% per year? Solve using:
a. tabulated factors
b. the GOAL SEEK tool on a spreadsheet.
Business
1 answer:
almond37 [142]2 years ago
7 0

Answer:

Answer is explained in the explanation section below.

Explanation:

a. In this part, we need to calculate the present worth using the formula to calculate the sale price of the bond.

As the coupon rate = 10% per year

So,

The Annual dividend will = 2000 = 10% x 20,000

19000 = 2000 (P/A, 14%,4) + B(P/F,14%,4)

19000 = 2000 (2.9137) + B (0.592)

Solving for B = Desired sales price of the bond

B = \frac{19000 - 5827.4}{0.592}

B = 22251

b. Part b of this question is to solve using GOAL SEEK feature of a spreadsheet so, I have attached it in the attachment. Please refer to the attachment for the solution of part b.

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Answer:

The sum of the debits will exceed the sum of the credits by $340. (None of the options given).

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Owen Company's unadjusted book balance at June 30 is $9,120. The company's bank statement reveals bank service charges of $50. T
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Answer:

$10,070

Explanation:

The true cash balance is the balance having considered the effect of the transactions that have happened but are yet to be captured in the books.

Reviewing the transactions,

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Answer:

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Production budget is a schedule of the number of units of goods that are to be produced using a forecast sales amount and the level of the opening and closing inventory

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Northern region                     25,500                              33,300

Southern region                     27,500                              28,900

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Closing inventory                     900                                     2,700    

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