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White raven [17]
2 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]2 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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Utica Company has offered to supply Kingston's entire annual requirements of the part for $53 each. If Kingston buys the part fr
miss Akunina [59]

Answer:

$480,000

Explanation:

Calculation to determine what total relevant costs to make the part internally are

First step is to calculate Relevant cost per unit:

Relevant cost per unit:

Direct materials $6

Direct labor $24

Variable manufacturing overhead $12

Fixed manufacturing overhead ($15 × 0.40) $6

Relevant manufacturing cost $48

Now let determine the Total relevant costs to make the part internally

Total relevant costs to take the part internally=($48 × 10,000)

Total relevant costs to make the part internally = $480,000

Therefore total relevant costs to make the part internally are $480,000

5 0
3 years ago
The resource-based view differs from the institution-based view in that the resource-based view focuses on a firm's _____.
Vladimir79 [104]

The resource-based view differs from the institution-based view in that the resource-based view focuses on a firm's internal strengths and weaknesses.

Resources are all materials available in our environment that are technically accessible, economically feasible, culturally sustainable, and that help meet our needs and desires. point.

Resources are physical materials that people need and value, such as land, air, and water. Resources are characterized as renewable or non-renewable. Renewable resources are automatically renewed as they are consumed, while non-renewable resources have limited availability.

1a: Source or Support: Available Resources - Usually used in the plural. b : natural source of wealth or income - often used in the plural. c : Natural features or phenomena that improve the quality of human life. d : computable wealth - usually used in the plural.

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7 0
1 year ago
Under absorption costing a company had the following per unit costs when 10,000 units were produced. Direct labor $ 2 Direct mat
Rudiy27

Answer: Total product cost per unit if 12,500 units = $13.

Explanation:

Given that,

Direct labor = $2

Direct material = $3

Variable overhead = $4

Total variable cost = $9

Fixed overhead ($50,000/10,000 units) = $5

Total product cost per unit = $14

Fixed Overhead at 12500 units = \frac{50000}{12500} = $4

∴  Total product cost per unit if 12,500 units = Total variable cost per unit + Fixed Overhead at 12500 units

= 9 + 4

= $13

6 0
3 years ago
What were the origins of the Asian currency crisis?
valina [46]

Answer:

East and South east Asia

Explanation:

The crisis that later blew up to become a financial crisis over the year started from the east and south east Asia countries of Thailand , Indonesia and South korea in 1997 before spreading to other counties  leading to a fall  in value of the currencies ,and fall in stock market and assets prices as the exchange rate continued to nosedive.

It was sparked up by the inappropriate borrowing by the private sector in the previous years

8 0
2 years ago
John works part-time for a moving company and earns a total of $116 each weekend. A friend invites him to go on a cruise next we
adell [148]

Answer: $116

Explanation: Opportunity cost refers to the loss of profit by an individual or a firm when one chooses to go for best alternative instead of the second best alternative.

In the given case, John has two alternatives and if he chooses to go on the trip it would cost him the loss of $116 salary that he receives.

Thus the opportunity cost of going on the trip would be $116.

5 0
2 years ago
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