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lilavasa [31]
3 years ago
6

XYZ Corp issued $600,000 of 9% , 10-year bonds on June 30,2020, for $562,500. This price provided a yield of 10% on the bonds. I

nterest is payable semiannually on December 31 and June 30. If XYZ uses the effective- interest method , what is the amount of interest expense that has accrued if the accounting period ends on October 31, 2020.
a. $27,000
b. $28,125
c. $18, 750
d. $20,000
Business
1 answer:
Rom4ik [11]3 years ago
5 0

Answer:

c. $18, 750

Explanation:

The computation of the amount of interest expense i.e. accrued is shown below:

= Issued amount × yield on the bonds × given months ÷ total number of months in a year

= $562,500 × 10% × 4 months ÷ 12 months

= $18,750

The 4 months is calculated from July 1 to October 31

Hence, the correct option is c. $18,750

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Caliber Corp. currently pays no dividends because it requires its internally generated funds be used to fund a research intensiv
Andreyy89

Answer:

Do =  $2.00

D1= Do(1+g)1 =  $2(1+0.2)1 = $2.40

D2= Do(1+g)2 = $2(1+0.2)2 = $2.88

D3= Do(1+g)3 = $2(1+0.2)3 = $3.456

D4= Do(1+g)4 = $2(1+0.2)4 = $4.1472

D5= Do(1+g)5 = $2(1+0.2)5 = $4.97664

PHASE 1

V1 = D1/1+ke + D2/(1+ke)2 + D3/(1+ke)3 +D4/(1+ke)4 + D5/(1+ke)5

V1 = 2.40/(1+0.15) + 2.88/(1+0.15)2 + 3.456/(1+0.15)3 + 4.1472/(1+0.15)4 + 4.97664/(1+0.15)5

V1 = $2.0870 + $2.1777 +  $2.2723 + $2.3712 + $2.4742

V1 = $11.3824

PHASE 2

V2 = DN(1+g)/ (Ke-g )(1+k e)n                                                                                                                                                                                                                                      

V2 = $4.97664(1+0.02)/(0.15-0.02)(1+0.02)5      

V2 = $5.0762/0.1435

V2 = $35.3742

Po = V1 + V2

Po = $11.3824 + $35.3742

Po = $46.76

Explanation: This is a typical question on valuation of shares with two growth rate regimes. In the first phase, the value of the share would be obtained by capitalizing the dividend for each year by the cost of equity of the company. The dividend for year 1 to year 5 was obtained by subjecting the current dividend paid(Do) to growth rate. The growth rate In the first regime was 20%.

In the second phase, the value of shares would be calculated by taking cognizance of the second growth rate of 2%. In this phase, the last dividend paid in year 5 would be discounted at the appropriate discount rate after it has been adjusted for growth.

5 0
3 years ago
Indicate with the appropriate letter the nature of each adjustment described below: Type of Adjustment A. Change in accounting p
julia-pushkina [17]

Answer:

A. Change in accounting principle (reported retrospectively) - PR

B. Change in accounting principle (exception reported prospectively) - PP

C. Change in estimate - E

D. Change in estimate resulting from a change in accounting principle - EP

E. Change in reporting entity - R

F. Correction of an error - N

4 0
3 years ago
Can someone tell me facts about local fundraising. maybe 2 or more facts
Xelga [282]

Answer:

-can provide you with supplemental funds that enhance what your group does and provide new opportunities for your members

- nurture and expand awareness for the cause, project, or brand that you are raising money for

-save and change lives, cure illnesses, protect the planet and make Government change the way they operate

3 0
2 years ago
If other things are held constant, an increase in the United States imports will
VMariaS [17]

Other things remaining constant, increased US imports will <u>D. Tend to cause the </u><u>dollar</u><u> to depreciate</u> because the world supply of dollars will rise.

<h3>What is the implication of increased United States imports with other factors constant?</h3>

With increased imports by the United States, and if all other factors are held constant, the supply of dollars will increase.

When the supply of dollars increases without a corresponding increase in demand, the dollar will depreciate or lose its value relatively.

Thus, if other things remain constant, increased US imports will <u>D. Tend to cause the </u><u>dollar</u><u> to depreciate</u> because the world supply of dollars will rise.

Learn more about exchange rates at brainly.com/question/2202418

7 0
2 years ago
Suppose you invest $ 4 comma 000 today and receive $ 9 comma 250 in five years. a. What is the internal rate of return​ (IRR) of
Dovator [93]

Answer:

IRR is 18.25%

Annual amount is -$0.225 which closest to zero dollar,because at irr the investment return is zero

Explanation:

The formula for IRR in excel is :irr(values)

The formula can be applied to the cash outflow of $4,000 and cash inflow of $9,250 in five years' time as follows

Years                Cash flow

0                       -$4,000

1                          $0

2                          $0

3                           $0

4                            $0

5                          $9,250

irr(-$4000 to $9,250)

irr is 18.25%

The amount of receivable each year can be computed using pmt formula in excel

=pmt(rate,nper,-pv,fv)

rate is the irr of 18.25%

pv is -$4000

fv is the future amount 0f $9,250

=pmt(18.25%,5,-4000,9250)

pmt=-$0.225 which closest to zero amount

6 0
3 years ago
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