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qwelly [4]
3 years ago
5

Madsen Motors's bonds have 21 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon i

nterest rate is 12%, and the yield to maturity is 15%. What is the bond's current market price

Business
1 answer:
GarryVolchara [31]3 years ago
4 0

Answer:

$810.63

Explanation:

For computing the current market price we need to use the present value formula i.e to be shown in the attachment below

Provided that,  

Future value = $1,000

Rate of interest = 15%

NPER =  21 years

PMT = $1,000 × 12% = $120

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the bond current market price is $810.63

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Tim's Taxi Service sold one of its cabs for $9,000. The cab had an original cost of $23,000 with $16,000 in accumulated deprecia
natta225 [31]

Answer:

The recognized gain is $2000

Explanation:

The carrying value of the cab sold is the difference between the original cost of $23,000 and the accumulated depreciation of $16,000, hence, carrying value is $7000($23000-$16,000)

The cash proceeds from the disposal of then cab are $9000

Gain on disposal of cab=$9000-$7000

Gain on disposal of cab=$2000

6 0
3 years ago
How can firms avoid incurring high transport costs when exporting bulk products?
Sunny_sXe [5.5K]

Firms can avoid incurring high transport costs when exporting bulk products by manufacturing bulk products regionally.

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7 0
2 years ago
Cafeteria Department Cutting Department Assembly Department Janitorial Department cost allocation $155,000 $31,000 $124,000 Cafe
Mama L [17]

Answer: Assembly Department

Explanation:

Missing part of question is attached below.

Cutting Department

Under the direct method, the Cutting Department is allocated $62,000 of the Janitorial cost and $126,750 of the Cafeteria cost for a total of:

= 62,000 + 126,750

= $188,750

Assembly department

Allocated $248,000 of the Janitorial cost and $42,450 of Cafeteria:

= 248,000 + 42,450

= $290,450

<em>Assembly Department is therefore the department that is allocated the most support department costs under the direct method. </em>

7 0
3 years ago
You recently purchased a stock that is expected to earn 22 percent in a booming economy, 11 percent in a normal economy, and los
UkoKoshka [18]

Answer:

Return on stock will be 12.65%

So option (c) will be the correct option

Explanation:

We have given expected return in booming economy = 22 %

Expected return in normal economy = 11 %

Expected return in recessionary economy = 4%

Probability of boom = 24% = 0.24

probability of normal economy = 67%=0.67

Probability of recession = 9 % =0.09

So  Expected return on stock = (Return in boom economy x Probability of boom economy) + (Return in normal economy x Probability of normal economy) +(Return in recessionary economy x Probability of recessionary economy)

Expected return on stock = (0.22 x 0.24) + (0.11 x 0.67) + (-0.04 x 0.09)

= 0.0528 + 0.0737 = 0.1265 = 12.6%

So option (c) will be the correct option

3 0
3 years ago
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