if Logan received a $2,500 bonus and his mps is 0.20, his consumption rises by $2,000 and his savings rises by $500
Answer:
After tax cost of debt is 4.16%
Explanation:
The yield on the debt which is pre-tax cost of debt can be computed using the rate formula in excel, which is given as follows:
=rate(nper,pmt,-pv,fv)
where nper is the number of coupon payments,this is calculated as 19*2 since it has a semi-annual coupon interest
pmt is the periodic coupon payment 6.1%/2*$2000=$61
pv is the current price of the bond which is $1933
fv is the face value repayable on redemption $2000
=rate(38,61,-1933,2000)
=3.20%
This is semi-annual yield , annual yield is 3.20%*2=6.40%
After tax cost of debt=6.40%*(1-t)
where t is the tax rate at 35%=0.35
after tax cost of debt=6.40%*(1-0.35)
=4.16%
Answer:
TRUE
Explanation:
Bankruptcy is a legal framework, in which borrowers who cannot pay their loans, may seek relief from all of their liabilities from individuals or other organizations. In most states, a judge's order mandates bankruptcy.
In this situation, Tim is a bankrupt person, tin wrote a negotiable note but now Tim has got relief from his liabilities, so he has not to pay against his negotiable note.
Therefore, the following situation is TRUE .
Answer: Straight line method of depreciation
Explanation: Under the straight line method of depreciation the asset is expensed over its useful life. In this method, depreciation or amortization is calculated by dividing the difference of initial cost and salvage value of the asset from its useful number of years.
This method is not commonly used for assets having longer term period but still some business entities use it as it is easy to calculate.
