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White raven [17]
3 years ago
5

You are given the following information with respect to a bond: par value: 1000 term to maturity: 3 years annual coupon rate 6%

payable annually You are also given that the one, two, and three year annual spot interest rates are 7%, 8%, and 9% respectively. The bond is sold at a price equal to its value. Calculate the annual effective yield rate for the bond i.
Business
1 answer:
Minchanka [31]3 years ago
5 0

Answer:

Tha annual effective yield rate for the bond is:

= 6.2%

Explanation:

a) Data and Calculations:

Bond par value = $1,000

Annual coupon rate = 6%

Annual spot interest rates = 7%, 8%, and 9% for year 1, year 2, and year 3 respectively

Current value of bond = $970 ($1,000 * 99% * 99% * 99%)

Annual coupon payments = $60 * 3 = $180

Effective rate for the three years = $180/$970 * 100 = 18.6%

Annualized effective yield rate = 6.2% (18.6%/3)

OR

Annualized effective yield rate = (Annual coupon payments/Current value of bonds)

= 6.2% ($60/$970)

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Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing? a.direct
Levart [38]

Answer:

C. Fixed Factory Overhead Per Unit

Explanation:

Variable costing and marginal costing income statements mainly differ because of treatment of fixed factory overhead.

Inventory costs under variable costing include only direct material, director labor and variable factory overhead.

Whereas in absorption costing, fixed factory overhead also become part of product cost in addition to direct material, direct labor and variable factory overhead.

5 0
4 years ago
The account receivable turnover measures:
statuscvo [17]

Answer:

The answer is B.

Explanation:

Accounts receivable turnover is the number of times per period(quarterly, semiannuallly or yearly) that a business

or firm collectss its average accounts receivable. The ratio is used to evaluate the firm's ability to efficiently sell on credit and collect money from its customers in a timely manner.

A lower number of turnover depicts higher efficiency.

Therefore, the correct answer is B. It measures how frequent, on average, receivables are received and collected during the period

6 0
3 years ago
Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on
dimaraw [331]

Answer and Explanation:

The computation is shown below:

As we know that

Monthly payment of a loan is given by

P =  L [r(1 + r)^n] ÷ [(1 + r)^n - 1]

where,  

P = Monthly payment = ?

r = Interst rate = 0.1 ÷ 12 = 0.00833

n = Term = 15 × 12 = 180

L =  Loan amount = 900000

Now

P = $900,000 [0.00833(1 + 0.00833)^180] ÷ [(1 + 0.00833)^180 - 1]

= $9671.4461

Now

The Monthly payment for 30-year loan

P = $900,000[0.00833(1 + 0.00833)^360] ÷ [(1 + 0.00833)^360 - 1]

= $7898.1441

So,  

Difference is

= $9671.4461 - $7,898.1441

= $1,773.3019

b.

Now

Total payment for 30-year loan is

= $7,898.1441 × 180

= $2,843,331.8871

And,

Total payment for 15-year loan is

= $9,671.4461 × 360

= $1,740,860.2907

So,

Difference is

= $2,843,331.8871 - $1,740,860.2907

= $1,102,471.60

i.e. option c

7 0
4 years ago
Managers are important members of the organization. Within an organization, there are managers at four levels: top, middle, firs
Zolol [24]

Answer:

1. Pat is Middle Level.

Pat is trying to implement the strategic goals of the company which are set by Top Management. That would make Pat a Middle level manager.

2. Rick is Top Level.

Rick is developing the policies for the entire company which would place Rick at Top Manager level.

3. Daisy is a First-line Manager

Daisy is responsible for the loading products such that it is done effectively. This is an operational duty which would place Daisy at First-line level.

4. Ruth is a First-Line Manager

Ruth directs art staff who are non-managers which would make Ruth a first-line manager

5. Gary is Top Level

By developing projections on long term growth, that means Gary contributes to strategic decisions thereby making Gary top level.

6. Greg is Middle Level

Greg is in charge of first line managers which places him directly on top of them which means he is a middle level manager.

7. Mike is a Team Leader

Mike is in charge of the team which is the textbook role of a team leader.

8. Nancy is a Team leader

The members of the team go to Nancy when they need to resolve conflict or when they want to coordinate their activities. As the team leader is in charge of team coordination, Nancy must therefore be a team leader.

5 0
3 years ago
How does the existence of black market work against the intended purpose of rationing
zlopas [31]
Idk I don't know this question I'm not a 8th grader
5 0
4 years ago
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