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ololo11 [35]
3 years ago
6

Jane Smith, MD, has had a great year in her pediatrics practice and has cash that she wants to invest. Her financial adviser sug

gests she buy a seven-year, $1,500 par value bond with an annual coupon rate of 10 percent and three years remaining to maturity. Dr. Smith decides to explore her options. She discovers that new, similarly risky bonds have an average annual rate of return of 12 percent. Bank certificates of deposit are returning 5 percent annually on average while a mutual fund investing in high-risk-growth stocks has an average annual rate of return of 20 percent. If Dr. Smith follows her financial adviser’s advice, what is the maximum amount she should pay for the bond? Explain your answer
Business
1 answer:
Arlecino [84]3 years ago
3 0

Answer: $1427.95

Explanation:

If Dr. Smith follows her financial adviser’s advice, the maximum amount that she should pay for the bond will be calculated thus:

This question can be solved using Excel.

Face value = $1500

Coupon rate = 10%

Years left = 3

Coupon = 10% × $1500 = $150

Yield to maturity = 12%

The bond price will be:

= PV(12%,3,-150,-1500)

= PV(0.12,3,-150,-1500)

= 1427.95

The bond price is $1427.95

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The balance sheet of Starsky Company at December 31, 2019, includes the following. Notes receivable $36,000 Accounts receivable
Arturiano [62]

Answer:

Journal Entry

Explanation:

1. Cash Dr,                                      $136,800  

Sales Discount Dr,                         $1,200

($60,000 × 2%)

         To Accounts receivable     $138,000

(Being cash is recorded)

2. Accounts receivable Dr,            $5,300  

      To Allowance for doubtful accounts $5,300

(Being written off is recorded)

     Cash Dr,                                        $5,300  

       Accounts receivable                  $5,300

(Being payment received is recorded)

3. Allowance for doubtful accounts Dr, $17,500  

       To Accounts receivable              $17,500

(Being  written off is recorded)

4. Bad Debts expense Dr,                $14,900

=$20,000 - ($17,300 + $5,300 - $17,500)

    To  Allowance for doubtful accounts  $14,900

(Being bad debt expenses is recorded)

8 0
3 years ago
Rodney just earned his master's degree in Marketing. Based on his education, which job would he be best suited for? Supply Chain
lubasha [3.4K]

Answer:

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Explanation:

Marketing is in all the activities undertaken by a business to entice customers to but its products.  It will include all promotional initiatives that aim at increasing the sales volume of a company. These activities range from advertising, promotions, publicity, and direct selling.

Rodney has graduated in marketing; meaning has acquired skills and competencies required in the marketing discipline. He will be more effective as a marketer as he has adequate knowledge of marketing. Rodney will be more fulfilled and better motivated in marketing because that is his area of strength.

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Interactive online advertising, is known as rich media. often has drop-down menus, built-in games, or search engines to engage viewers. This is further explained below.

<h3>What is Rich media?</h3>

Generally, Rich media is simply a word used in digital advertising to describe an ad containing sophisticated capabilities such as video, music,

In conclusion, Rich media is a big part of Interactive online advertising,

Read more about Media

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5 0
2 years ago
Why is it important to know the interest rate on your credit card?
Irina18 [472]
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When you go into credit (the red) you basically loan money which means that you have to pay a "fine" called interest. so the more you loan and depending on the type of loan, the more interest you will pay.

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Yes amazing work buy stocks and lower prices but 30p0
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