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vitfil [10]
3 years ago
12

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 10 percent annual interest. The current yield to maturity

on such bonds in the market is 11 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) Bond Price a. 40 years $ b. 17 years $ c. 8 years $
Business
1 answer:
zubka84 [21]3 years ago
8 0

Answer:

a) 40 yrs Price=$910.49 b) 17 yrs Price=$924.51 c) 8 yrs Price=$948.54

Explanation:

Hi, well, what we need to do is to use the following data and formula in order to find the ´price of each bond, just by changing the maturity time for each , option (40 years, 17 years, and 8 years). Let's illustrate with the first price, when its maturity is 40 years.

Price=\frac{Coupon((1+YTM)^{n-1}-1 )}{YTM(1+YTM)^{n-1} } +\frac{(Face Value+Coupon)}{(1+YTM)^{n} }

Price=\frac{100((1+0.11)^{39}-1 )}{0.11(1+0.11)^{39} } +\frac{(1000+100)}{(1+0.11)^{40} }=910.49

That was a) Price=$910.49

Price=\frac{100((1+0.11)^{16}-1 )}{0.11(1+0.11)^{16} } +\frac{(1000+100)}{(1+0.11)^{17} }=924.51

That was b) Price=$924.51

Price=\frac{100((1+0.11)^{7}-1 )}{0.11(1+0.11)^{7} } +\frac{(1000+100)}{(1+0.11)^{8} }=948.54

Finally, that was c) Price=$948.54

Best of luck.

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The LFH Corporation makes and sells a single product, Product T. Each unit of Product T requires 1.5 direct labor-hours at a rat
lora16 [44]

Answer:

$441,000

Explanation:

Budgeted direct labor cost = Budgeted production * Hours per unit * Rate per hour

Budgeted direct labor cost = 28,000 units  * 1.5 DLH * $10.50

Budgeted direct labor cost = $441,000

So, budgeted direct labor cost for June would be $441,000

5 0
3 years ago
Arrange six departments into a 2 x 3 grid so that these conditions are satisfied: 1 close to 2, 5 close to 2 and 6, 2 close to 5
drek231 [11]

Answer:

1?3

256

Explanation:

If one is close to 2, then but so is five, and 6 is near five then they all have to be on there own row. Seeing as 3 is close not close to 1, or 2, it has to be the furthest away from them as it can be, and the questionmark is there because you only have five numbers, (1,2,3,5,6) so there isn't enough info for the question mark to have an answer.

5 0
3 years ago
The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and has aske
cricket20 [7]

Answer: the correct answer is a. Machine B

Explanation:

Machine A average rate return

40000 out of 300000. It means that 300000 is 100% and $ 40000 is X. We apply a simple three rule:

40000       X                     X= 4000000/300000

300000     100%               X= 13.33%

Machine B average rate return

50000 out of 250000. It means that 250000 is 100% and $ 50000 is X. We apply a simple three rule:

50000       X                     X= 5000000/250000

250000     100%               X= 20%

Machine C average rate return

$75,000 out of $500,000. It means that $500,000 is 1005 and $75,000 is X. We apply a simple three rule

$75,000     X                       X=7500000/500000

$500,000  100%                 X= 15%

The highest average is the one onf Machine B

4 0
4 years ago
When some firms exit an industry in which firms are incurring economic​ losses, the market supply curve shifts​ _______ and the
torisob [31]

Answer: Option (A) is correct.

Explanation:

Correct option: Leftward; rises

When some of the firms are exited from market because are incurring losses then as a result short run market supply decreases. This is due to the fall in the production level, since some of the firms are not producing anymore.

So, this change in the market supply will shift the market supply curve leftwards.

The market price increases as the market supply decreases.

8 0
3 years ago
Adriana has borrowed $30,000 from her IRA in order to fund her startup costs. How long does she have to replace the money withou
nordsb [41]

Answer:

it is NOT 30 days

Explanation:

7 0
4 years ago
Read 2 more answers
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