Lowest because to show how scarce it is it will have to be low
Answer:
Earnings at the maturity: (C) $1,187.69
Explanation:
Future value at the end of the period = Present Value x (1 + Interest Rate) ∧ Number of compounding periods
Future Value at the end of the period = $1,000 x (1 + 3.5% interest rate) ∧ 5 years = $1,187.69
Answer:
Current rate method
Explanation:
Translation is defined as the conversion of financial statement of a foreign subsidiary from the foreign currency to local currency.
This is done to reduce the effect of foreign exchange risk.
If a foreign subsidiary is exposed to foreign exchange risk the best translation method is the current rate method.
Current rate method uses the current exchange rate in translation.
Translation is used when the local currency is the functional currency of the company.
Answer:
The face value of each bond was $1,100
Explanation:
Hi, well, first we have to assume that all the future cash flows make sense to the owner of the bonds, that is, we are assuming that he paid the fair price for all the bonds and since they were 10, the price of each bond was $9,855.57/10= $985.56.
Now, we need to find the face value of the bond, taking into account that we planned to sell the bonds $50 less than its face value, therefore the equation that we need to solve for "X" (X being the face value of the bond) is:
Where:
Coupon = X * 8%
Yield = owner´s money yield
n = periods of payment
X = Face Value
So, it should look like this:
So, the face value of each bond was $1,100
Best of luck.