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2 years ago

A 16-year, $1,000 par value zero-coupon rate bond is to be issued to yield 6 percent.

Business

1 answer:

Solnce55 [7]2 years ago

7 0

Answer:

a) $393.65

b) $458.11

c) $217.63

Explanation:

Given data:

16-year ( n )

$1000 par value ( FV )

6% ( R )

A) determine the initial price of the bond

= FV / ( 1 + R ) ^ n

= 1000 / ( 1.06 ) ^ 16

= 1000 / 2.5403 = $393.65

B ) when interest rate drops to 5% determine the value of the zero-coupon rate of bond

= FV / ( 1 + R ) ^n

= 1000 / ( 1.05 ) ^ 16

= 1000 / 2.1829 = $458.11

C ) when interest rate increases to 10% determine the value of the zero-coupon rate of bond

= Fv / ( 1 + R ) ^ n

= 1000 / ( 1.1 ) ^ 16

= 1000 / 4.5950 = $217.63

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For 2021, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an a

Naddik [55]

Answer:

$80,160.

Explanation:

An account receivable is lawfully enforceable cases for installment, held by a business for the products provided and benefits that clients/customers have requested yet not paid for.

According to Rahal's autos noncollectable accounts and the amount they received in the following year. Rahal's collectible accounts on December 31, 2021, is

86,500 + 404,000 - 408,000 - 2,340

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2 years ago

Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual div

Colt1911 [192]

Answer:

There's an error in the numbers for this question; I found the correct one and pasted it below;

"Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $1.30 per share but all future dividends will be decreased by 2.75 percent annually. What is a share of this stock worth today at a required return of 15.5 percent? "

Explanation:

Use dividend discount model (DDM) to calculate the stock price

$P0 = \frac{D0(1+g)}{r-g}$

whereby,

P0 = Current price

D0 = Last dividend paid = 130

g = growth rate = -275% or -2.75 as a decimal

r = required return = 155% or 1.55 as a decimal

Next, plug in the numbers to the DDM formula above;

$P0 = \frac{1.30(1-0.0275)}{0.155 + 0.0275} \\ \\ = \frac{1.2643}{0.1825} \\ \\ =6.9277$

Therefore this stock is worth $6.93

6 0

2 years ago

Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 30 million

lys-0071 [83]

Answer:

a. <u>GDP using product approach</u>

There are no intermediate goods inputs. Corn producer grows 30 million bushels of corn and each bushel of corn worth is $5.

GDP = 30 million * $5

GDP = $150 million

<u>GDP using expenditure approach</u>

i) Consumers buy 20 million bushels of corn

Consumption = 20 million * 5

Consumption (C) = $100 million

ii) Corn producer adds 5 million bushels to inventory

Investment = 5 million * $5

Investment (I) = $25 million

iii) Government buys 5 million bushels of corn

Government spending = 5 million * $5

Government spending (G) = $25 million

GDP = C + I + G

GDP = $100 + $25 + $25

GDP = $150 million

<u>GDP using income approach</u>

Profit income = $150 million - $60 million - $20 million

Profit income = $70 million

Government income = Taxes paid by the corn producer = $20 million

GDP = $60 million + $70 million + $20 million

GDP = $150 million

b. Private disposable income = GDP + Net factor payments + Government transfers + Interest on the government debt - Total taxes

Private disposable income = $150 million + 0 + $5 million + $10 million - $30 million

Private disposable income = $135 million

Private savings = Private disposable income - Consumption

Private savings = $135 million - $100 million

Private savings = $35 million

Government savings = Government tax income - Transfer payments - Interest on the government debt - Government spending

Government savings = $30 million - $5 million - $10 million - $5 million

Government savings = $10 million

National savings = Private savings + Government savings

National savings = $35 million + $10 million

National savings = $45 million

Government budget surplus = Government savings = $10 million

Government deficit = (-) $10 million

8 0

2 years ago

Which of the following is an example of trade barriers imposed by Japan? Multiple Choice U.S. basTo comprehend why a society thi

lana [24]

The correct option is E). All of these choices are correct.

<h3>What trade barriers were imposed by Japan?</h3>

Along with the tariff barriers, Japan also have some non-tariff barriers that may impact commercial activity of foreign products into Japan.

Japan prohibited the imports of narcotics, firearms, explosives, and products that violate intellectual property laws.

Japan's tariff system offers lower and duty-free rates to those products which has been imported from developing countries.

Learn more about the trade barriers in Japan here:-

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3 0

1 year ago

In the month of April, the Forming Department had 500 units in beginning work in process inventory that were 60% complete. These

Mamont248 [21]

Answer:

$2,700,000

Explanation:

since materials are added at the beginning of the process, we must first determine the number of units that started to be produced during April:

finished goods + ending inventory - beginning inventory = 10,000 + 2,000 - 500 = 11,500

the $1,380,000 must be divided by 11,500 units started = $1,380,000 / 11,500 = $120

total materials = [(11,500 - 2,000) x $120] + $60,000 (beginning inventory) = $1,140,000 + $60,000 = $1,200,000

conversion costs are added as the process is carried out so we must determine equivalent units:

beginning work in process: 500 x 60% = 300 equivalent units
10,000 units were completed during April
ending inventory: 2,000 x 25% = 500 equivalent goods

total equivalent units processed = 10,000 + 500 - 300 = 10,200

conversion cost per equivalent unit = $1,530,000 / 10,200 = $150

total conversion costs = [(10,200 - 500) x $150] + $45,000 (beginning inventory) = $1,455,000 + $45,000 = $1,500,000

total cost of finished goods inventory = $1,200,000 + $1,500,000 = $2,700,000

7 0

2 years ago