Bill's Barbershop has two barbers available to cut customer's hair. Both barbers provide roughly the same experience and skil
l, but one is just a little bit slower than the other. The process flow below shows that all customers go through steps B1 and B2 and then can be served at either of the two barbers at step B3. The process ends for all customers at step B4. The numbers in parentheses indicate the minutes it takes that activity to process a customer.
A. How long does it take the average customer to complete this process.
B. What single activity is the bottleneck for the entire process?
A. How long does it take the average customer to complete this process.
B. What single activity is the bottleneck for the entire process?
1 answer:
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Answer:
current yield 8.2089552%
YTM = 8.05%
effective annual yield = 4.92%
Explanation:
(A)
current yield = C/P
coupon payment / market price
8.8/107.2 = 0.082089552 = 8.2089552%
(B)
First par being the present value of the coupon payment and second the redeem of the face value at the end of the bond.
market price 107.2
face value 100
time = 19
rate 8.8%
C = annual coupon payment 100 x 8.8% = 8.8
You solve this using a financial calculation and get the semiannual rate
YTM/2 = 0.040268160
then multiply by 2 to get the annual YTM
0.040268160 x 2 =
YTM = 0.08053632 = 8.05%
(C)
Effective Annual Yield
where:
Holding period return:
In this case:
coupon payment + redem - investment = net return
8.8 * 19 + 100 - 107.2 = 160
160/107.2 = 1.492537313
Then
EAY = 0.049242509 = 4.9242509%