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anzhelika [568]

3 years ago

10

Consider a 7-year bond with a 9% coupon and a yield to maturity of 12%. If interest rates remain constant, one year from now the

price of this bond will be _________.

1 answer:

Llana [10]3 years ago

5 0

Answer:

(C) Higher.

Explanation:

The computation of the present value in both the cases are as follows:

In the first case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 7

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $863.09

In the second case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 6

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $876.66

So as we can see that the price of the bond would increased

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John owns a shoe-shine business. His accountant most likely includes which of the following costs on his financial statements? a

devlian [24]

Answer:

Correct option is (c)

Explanation:

An accountant will record only those cost in the financial statements that have incurred on account of carrying out the business.

In this case, option (a) and (b) are opportunity cost of carrying out shoe shine business. These are the income that John could have earned if he did not start shoe-shine business.

Cost of shoe polish is an operating expense incurred to run his shoe-shine business. So this cost will be included by the accountant in the financial statements.

7 0

4 years ago

Prepare summary journal entries to record the following transactions for a company in its first month of operations. a. Raw mate

bagirrra123 [75]

Answer and Explanation:

The Journal entries are prepared below:-

a. Raw materials inventory Dr, $98,000

To Accounts payable $98,000

(Being raw material is purchased on the account is recorded)

b. Work in process inventory Dr, 41,500

To Raw materials inventory $41,500

(Being direct material used is recorded)

Factory overhead Dr, 18,800

To Raw materials inventory $18,800

(Being indirect material used is recorded)

c. Work in process inventory Dr, $45,000

Factory overhead Dr, $33,000

To Cash $78,000

(Being cash paid is recorded)

d. Factory overhead Dr, $8,125

To Cash $8,125

(Being cash paid is recorded)

e. Work in process inventory Dr, $56,250 (45,000 × 125% )

To Factory overhead $56,250

(Being overhead is recorded)

f. Finished goods inventory Dr, $63,000

To Work in process inventory $63,000

(Being transferred cost is recorded)

g, Cost of goods sold Dr, $63,000

To Finished goods inventory $63,000

(Being cost of goods sold is recorded)

Accounts receivable Dr, $90,000

To Sales $90,000

(Being sales value is recorded)

3 0

3 years ago

Tristan transfers property with a tax basis of $1,255 and a fair market value of $1,570 to a corporation in exchange for stock w

AlladinOne [14]

Answer: $1531

Explanation:

The corporation's tax basis in the property received in the exchange will be the addition of Tristan's Tax basis and the gain that's recognized on exchange by Tristan.

The gain realized will be:

= $1,570 - $1,255

= $315

Boot received = $276

Therefore, lower of $315 or $276 is $276.

The corporation's tax basis in the property received will then be:

= $1255 + $276

= $1531

4 0

3 years ago

A landlord entered into a written lease of a bakery for a term of 25 years with a baker. The parties agreed to a right of first

NikAS [45]

In the given scenario; "Yes, the chocolatier enforce the option because the option touches and concerns the leasehold estate".

<h3>What is Jurisdiction's Rule?</h3>

Jurisdiction is a phrase that refers to a court's power or authority to hear a matter. The ability of federal and state courts to hear cases is governed by both federal and state statutes, as well as the Constitutions of the United States and each individual state.

The jurisdiction's Rule Against Perpetuities: The rule against perpetuities is a legal rule in Anglo-American common law that prohibits people from using legal instruments (typically a deed or a will) to exert control over the ownership of private property for a period of time that extends far beyond the lives of those living at the time the instrument was written.

The exceptions to the rule against perpetuity are-

The rule does not apply to vested interests since vested interests cannot be detrimental to remoteness.
The rule does not apply to land acquired or controlled by Corporation.
Philanthropic gifts; the rule does not apply to transfers for the benefit of the public for religious, pious, or charitable causes.

To know more about jurisdiction and its types, here

brainly.com/question/10377896

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8 0

2 years ago

Bean Brewers, Inc., a manufacturer of coffee makers, had the following activities, allocated costs, and allocation bases: A

aivan3 [116]

Answer: B. $438

Explanation:

Correspondence Cost = Number of letters * Predetermined cost of correspondence

Predetermined cost of correspondence = Allocated cost/ Allocated base

= 14,000/1,600 letters

= $8.75 per letter

Northeast Office used 50 letters for correspondence.

Cost = 8.75 * 50

= $437.50

= $438

4 0

3 years ago