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Georgia [21]
3 years ago
5

A company issued $50,000 of 8%, 10-year bonds on January 1. The bonds pay semi annual interest. The present value factor of a si

ngle amount of 20 periods at 8% is 0.2145.The present value of 10 periods at 4% is 0.6756. The present value of 20 periods at 4% is 0.4564. Determine the present value of the par value of the bonds. Multiple choice question. $22,820 $10,725 $50,000 $33,780 g
Business
1 answer:
inessss [21]3 years ago
6 0

Answer:

$22,820

Explanation:

Calculation to determine Determine the present value of the par value of the bonds.

Discount rate =8%/2

Discount rate= 4%

Present value factor of 20 periods at 4%= ( 1 / 1.04^20 )

Present value factor of 20 periods at 4%=0.4564

Using this formula

Present value of the par value of the bond = Future value of the bond x Present value factor =

Let plug in the formula

Present value of the par value of the bond=$50,000 x 0.4564

Present value of the par value of the bond = $22,820

Therefore the present value of the par value of the bonds is $22,820

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Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate
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Answer:

Date Received       Present Value      Value in 1 Year    Value In 2 Years

today                       $1,000                  $1,050                 $1,102.50          

in 1 year                   $952.38               $1,000                 $1,050

in 2 years                $907.03               $952.38               $1,000      

The present value of the gift is <u>LOWER (BY $45.35)</u> if you get engaged in two years than it is if you get engaged in one year.

Explanation:

to determine future value:

future value = present value x (1 + interest rate)ⁿ

to determine present value:

present value = future value / (1 + interest rate)ⁿ

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3 years ago
Suppose that, for every 1-percentage-point decline in the discount rate, commercial banks collectively borrow an additional $2 b
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Answer:

reserves will be  0.1 billion

Explanation:

given data

discount rate  = 1 %

borrow = $2 billion

reserve ratio = 10%

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to find out

bank reserves will be

solution

we know here discount rate is  1 % with borrow additional $2 billion and reserve ratio is 10%

and here discount rate is 0.5 % for 4% to 3.5 %

so here we can say bank will borrow $2 billion × 0.5

bank borrow  = $1  billion

and

here bank reserves increase that is 10% ×  $1  billion

so  reserves will be 0.10 ×  $1  billion = 0.1 billion

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Answer:

C. MACRS depreciation expense.

Explanation:

Material participation in an income-producing activity. That is, an activity that is regular, continuous, and substantial leading to income-producing actions, in which the taxpayer materially participates is an active income or loss.

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Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implemen
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An increase in the money supply might indicate that the Fed had
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