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3 years ago

What will happen to the market value of a bond if interest rates decrease?

Business

1 answer:

enot [183]3 years ago

8 0

Answer:

b. The market value will increase

Explanation:

In the case when the rate of the interest decrease so the market value of the bond would be increased. As the market value of the bond and the rate of interest has an inverse relationship between them. In the case when the rate of interest increased than the market value of the bond decreased and vice versa

Therefore option b is correct

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On January 1, Year 1, Ballard company purchased a machine for $28,000. On January 1, Year 2, the company spent $7,000 to improve

timofeeve [1]

Answer:

$23,520

Explanation:

The computation of book value of the machine is shown below:-

Machine cost $28,000

Less: Depreciation $4,200

($28,000 - $2,800) ÷ 6

Book Value at beginning

of Year 2 $23,800

Add: Improvements $7,000

Total $54,600

Less: Accumulated

Depreciation for 3 years $31,080

($54,600 - $2,800) × 3 ÷ 5 years

Book Value Dec 31, Year 4 $23,520

3 0

3 years ago

In periods subsequent to an asset transfer from a subsidiary to its parent at a gain, what effects continue on the seller's and

Alik [6]

Answer:

a. retained earnings of the seller are overstated

Explanation:

An asset transfer from a subsidiary to its parent at a gain is an Intragroup transaction. Intragroup transactions must be eliminated otherwise the financial statements would be misleading and not have a faithful representation.

The consequence of this transfer is that the Income of the Seller (subsidiary) increases and this also increases the Retained Income Balance of for the Subsequent years. We should eliminate this Income.

8 0

3 years ago

22. Communication that takes place between a manager and employees of other workgroups is called ………… communication.

garri49 [273]

Answer:

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3 0

4 years ago

Assets that are not expected to provide benefits for a number of accounting periods are called __________.

kiruha [24]

Assets that are not expected to provide benefits for a number of accounting periods are called b. fixed assets

5 0

4 years ago

Read 2 more answers

Puppy Co. reports the contribution margin income statement for 2020.

Oksi-84 [34.3K]

Answer: See explanation

Explanation:

a. Compute the company's degree of operating leverage for 2019.

This will be:

= Contribution / Pre tax income

= 432000 / 108000

= 4

b. If sales decrease by 5% in 2020, what will be the company's pretax income?

We should note that the degree of operating leverage is:

= % change in pre tax income / % change in sales

4 = % change in ore tax Income / 5%

% change in ore tax income = 5% × 4 = 20%

Company's pre-tax income will be:

= 108000 - (20% × 108000)

= 108000 - (0.2 × 108000)

= 108000 - 21600

= $86400

c. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020.

Sales = 2160000 × 95% = 2160000 × 0.95 = 2052000

Less: Variable cost = 1728000 × 95% = 1728000 × 0.95 = 1641600

Contribution margin = 410,000

Less: Fixed cost = 324000

Pre tax net income= 86400

4 0

3 years ago