1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Evgen [1.6K]
3 years ago
5

Now, consider the situation in which Noah wants to earn a return of 7%, but the bond being considered for purchase offers a coup

on rate of 9%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of
Business
1 answer:
Oxana [17]3 years ago
4 0

Answer:

$1,053.29  

Explanation:

The intrinsic value of the bond is the present value of the bond's future  cash flows, semiannual coupons for 3 years as well as the face value at the bond's maturity payable to bondholders.

The bond price can be determined using a financial calculator bearing in mind that the calculator would be set to its default end mode before making the following inputs:

N=6(there are 6 semiannual coupons in 3 years)

PMT=45(semiannual coupon=1000*9%*6/12=45)

I/Y=3.5(semiannual yield=7%*6/12=3.5%

FV=1000*(the face value of the bond is $1000)

CPT

PV=$1,053.29  

You might be interested in
Firms and brands that continually attempt to operate in the
Archy [21]

Answer:

B) High, low

Firms and brands that continually attempt to operate in the  <u>HIGH</u> price / <u>LOW</u>  benefits quadrant do not survive over the long run as customer  trust is Damaged.

Explanation:

Many times new products have a very short life because companies believe that they can charge very high prices because they are innovations, but they forget to provide the corresponding benefits of a very high price. Usually short living fads result from this strategy, because the customers will demand more for their money and if the product doesn't satisfy them, they wouldn't purchase it again. And with all the social networks we have today, gossip (and videos) about bad products travel extremely fast.

6 0
3 years ago
Suppose that Japan can produce 5 cars in 8 hours and 15 HD TVs in 10 hours. The US can produce 5 cars in 6 hours and 15 TVs in 5
ICE Princess25 [194]

<u>Answer:</u>

<u>If there is 1 hour of production:  </u>

Cars produced by Japan = 5/8 = .625 cars  

HD TV produced by Japan = 15/10 = 1.5 HD TVs

Further,

Cars produced by US = 5/6 = .83 cars

HD TV produced by US = 15/5 = 3 HD TVs

So,

Opportunity cost of a car for Japan = 1.5/.625 = 2.4 units of HD TVs

Opportunity cost of car for US = 3/.83 = 3.61 units of HD TV

Since, Japan has lower opportunity cost of producing cars, so Japan has comparative advantage in producing cars.

Opportunity cost of a HD TV for Japan = .625/1.5 = .42 units of car

Opportunity cost of a HD TV for US = .83/3 = .28 units of car

Since US has lower opportunity cost of producing HD TVs, so US has comparative advantage in producing HD TVs.

7 0
3 years ago
Carla just started her new job working at the Department of Commerce. In order to see whether Carla “knows her stuff,” her boss
Whitepunk [10]

Answer: one key indicator that Carla could look at is the inflation rate.

Explanation:

The inflation rate is a really important factor when economists want to assess the economic state of a nation.

3 0
3 years ago
A company is considering the purchase of a new machine for $48,000. Management predicts that the machine can produce sales of $1
dolphi86 [110]

Answer:

Accounting rate of return is 10%

Explanation:

Given data

new machine = $48,000

sales = $16,000

time = 10 year

depreciation = $4,000 / year

factory overhead  = $8,000 + depreciation $4,000

net income = $2400

tax rate = 40%

to find out

accounting rate of return for the machine

solution

we know that

Accounting rate of return =  after tax net income / average investment

so here we know net income after tax = $2400

so we find investment first

Average investment = (Initial investment) / 2

Average investment = 48000 / 2 = $24000

so

Accounting rate of return =  after tax net income / average investment

Accounting rate of return =  2400 / 24000  = 0.1 = 10%

Accounting rate of return is 10%

6 0
4 years ago
Accounts Receivable. At year-end, the L. Cole Company has completed services of $23,500 for a client, but the client has not yet
Andre45 [30]

Answer and Explanation:

for Accounts Receivable. At year-end, the L. Cole Company has completed services of $23,500 for a client, but the client has not yet been billed for those services:

accounts receivable is debited and service revenue is credited for $23,500 because the company has provided service to customer and so company would recognize revenue by crediting service revenue for increase in revenue and since the payment is not yet made accounts receivable being asset is debited for increase in balance.

for Interest Receivable. At year-end, the company has earned, but not yet recorded, $570 of interest earned from its investments in government bonds:

interest receivable is debited and interest income is credited for $570 because the company has earned interest and so interest is income for the company and so interest income is credited for increase in revenue. The interest is yet to be received by the company and therefore interest receivable being asset is debited for increase in balance.

for Accounts Receivable. A painting company bills customers when jobs are complete. The work for one job is now complete. The customer has not yet been billed for the $1,660 of work.:

accounts receivable is debited and service revenue is credited for $1,660 because the company has provided service to customer and so company would recognize revenue by crediting service revenue for increase in revenue and since the payment is not yet made accounts receivable being asset is debited for increase in balance.

6 0
3 years ago
Other questions:
  • Work teams often assume many activities traditionally reserved for managers. Which of the following is one of the responsibiliti
    11·1 answer
  • Chik’s Chickens has accounts receivable of $6,333. Sales for the year were $9,800. What is its average collection period?
    14·1 answer
  • Millions of people from Mexico have migrated to the United States. This has reduced the supply of labor in Mexico and increased
    5·1 answer
  • Roadside Markets has a 6.75 percent coupon bond outstanding that matures in 10.5 years. The bond pays interest semiannually. Wha
    7·2 answers
  • A person who invests in a business but takes no part in the day to day operations of the business is called a(n)
    9·1 answer
  • A proposed nuclear power plant will cost $2.2 billion to build and then will produce cash flows of $300 million a year for 15 ye
    14·2 answers
  • Barbara is selling her car. She knows that the brakes do not work. When a potential buyer asks Barbara if there are any problems
    11·1 answer
  • A method of identifying the legal description of a property is known as what...? Lot and Block Lot Number ACRIS Property Descrip
    10·1 answer
  • Why is all else held constant along a demand curve? Group of answer choices To isolate how a change in price impacts a change in
    6·1 answer
  • When the fed buys government securities, banks' reserves ________, the quantity of money ________, and the federal funds rate __
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!