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lisabon 2012 [21]
3 years ago
7

Why might a town decide to issue bonds?

Business
1 answer:
Sophie [7]3 years ago
8 0
A town might decide to issue bonds to B) to build new roads or bridges. A town will achieve a specified amount of money by issuing the bond and there must be an obvious source for returning the bond value until its maturity date. Therefore, building projects or other projects related to the town's infrastructure would be the most appropriate reason for a town to issue bonds.
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Consider two bonds, a 3-year bond paying an annual coupon of 5.90% and a 10-year bond also with an annual coupon of 5.90%. Both
zlopas [31]

Answer:

First bond new price=  $921.53

Second bond new price =$801.05

Explanation:

a.  Face value= future value= $1,000

Coupon rate= 5.90%

Coupon payment= 0.0590*1,000= 59

Time= 3 years

Yield to maturity= 9%

Enter the below in a financial calculator to calculate the present value of the bond:

FV= 1,000

PMT= 59

N= 3

I/Y= 9

The value obtained is 921.53.  

Therefore, the new price of the bond is $921.53.

b. Face value= future value= $1,000

Coupon rate= 5.90%

Coupon payment= 0.0590*1,000= 59

Time= 10 years

Yield to maturity= 9%

Enter the below in a financial calculator to calculate the present value of the bond:

FV= 1,000

PMT= 59

N= 10

Interest rate per annum= 9

The value obtained is 801.05.

Therefore, the new price of the bond is $801.05.

7 0
3 years ago
The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is cal
velikii [3]

Answer:

Preemptive right

Explanation:

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a <u>Preemptive right.</u> A preemptive right grants right to existing shareholders to buy some proportion of new shares at a price lower than market price

7 0
2 years ago
EvenFlo Pipes forecasts a small increase in sales next year. To achieve this growth in sales, however, the firm must purchase an
TEA [102]

Answer: a. The firm must purchase lumpy assets to achieve the increase in sales.

Explanation:

EvenFlo Pipes needs to sell more pipes in order to see an increase in sales. Assuming they are the producers, they will need to produce more pipes than they have been doing and this will need them to increase their production capacity.

To do so they would have to invest in fixed assets as these are what produce pipes. This is why the firm will have to purchase lumpy assets that will help them produce and sell more pipes.

3 0
3 years ago
Preparing job order costing journal entries
trasher [3.6K]

Answer:

Item a

Debit : Website expenses $2,000

Credit : Cash $2,000

Item b

Debit : Work in Process : Direct labor $11,250

Debit : Work in Process : Indirect labor $3,750

Credit : Wages Payable  $15,000

Item c

Debit : Raw Materials $24,000

Credit : Accounts Payable $24,000

Item d

Debit : Work in Process : Direct Materials  $7,500

Debit : Work in Process : Indirect Materials $5,000

Credit : Raw Materials $12,500

Item e

Debit : Work in Process : Depreciation $18,000

Credit : Accumulated depreciation $18,000

Item e

Debit : Work in Process : Pant Insurance  $1,500

Credit : Prepaid insurance  $1,500

Item e

Debit : Work in Process : Property tax  $3,900

Credit : Property Tax Payable  $3,900

Item f

Debit : Overheads $11,250 x 200% $22,500

Credit : Work in Process $22,500

Item g

Debit : Finished Goods Inventory $40,000

Credit : Work in Process $40,000

Item h

Debit : Accounts Receivables   $22,000

Debit : Cost of Sales  $18,000

Credit : Sales Revenue  $22,000

Credit : Finished Goods Inventory $18,000

Explanation:

The journals for the transactions have been prepared above.

4 0
3 years ago
The following information is from ABC Company's general ledger: Beginning and ending inventories, respectively, for raw material
Sholpan [36]

Answer:

cost of goods manufactured= $176,000

Explanation:

Giving the following information:

Direct materials:

Beginning inventory= $16,000

Ending inventory= $20,000

Purchase= $72,000

WIP:

Beginning inventory= $40,000

Ending inventory= $44,000

Direct labor= $72,000

Manufacturing overhead applied= $40,000

T<u>o calculate the cost of goods manufactured, we need to use the following formula:</u>

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 16,000 + 72,000 - 20,000= 68,000

cost of goods manufactured= 40,000 + 68,000 + 72,000 + 40,000 - 44,000

cost of goods manufactured= $176,000

8 0
3 years ago
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