Answer: C. interest expense will not be a constant dollar amount over the life of the bond.
Explanation:
When a bond is sold at a discount, the discount will have to be amortized over the life of the bond to ensure that it reaches par at maturity.
As a result, the interest expense will be based on a larger figure every year which would mean that it would have to be larger each time. t will therefore not be a constant dollar amount over the life of the bond.
Answer:
$136,539.57
Explanation:
The present value of the project can be determined by using the cfj function of a Financial calculator as follows :
$0 CF0
$10,000 CF 1
$23,000 CF2
$33,000 CF3
$42,000 CF4
$55,000 CF5
I/YR = 5 %
Then SHIFT NPV gives $136,539.57
therefore,
the present value of the project is $136,539.57
Answer:
It takes a share in the profits that are derived from the investment.
Explanation:
The Mudarabah banking system is a financial concept that is structured on partnership, wherein one partner is the financier (rabbulma) while the other partner is responsible for the supply of labor and skills (mudarib) for the management of the capital invested in the business. Consequently, the factors of production in this system are, labor, capital and entrepreneurship.
The Mudarabah is of two types:
1. Restricted mudarabah: if the financier states a particular business for which the capital is to be invested in.
2. Unrestricted mudarabah: if the financier permits the fund manager or entrepreneur (mudarib) to invest the capital in any business of choice.
Under the mudarabah banking system, when an Islamic bank lends money to a business, it takes a share in the profits that are derived from the investment for a specific period of time.
Hence, it's a banking system peculiar to the Islamic world and the contractual partners shares profit and loss based on a pre-defined and agreed ratio.
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