Answer:
The Coupon rate is 11.66%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Selling price = P = $1,382.01
Number of payment = n = 14 years
Bond Yield = 7.5%
The coupon rate can be calculated using following formula
Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
7.5% = [ C + ( $1,000 - 1,382.01 ) / 14 ] / [ ( $1,000 + $1,382.01 ) / 2 ]
7.5% = [ C - $27.29 ] / $1,191
7.5% x $1,191 = C - $27.29
$89.33 = C - $27.29
C = $89.33 + $27.29 = $116.62
Coupon rate = $116.62 / $1,000 = 0.11662 = 11.66%
Answer:Please refer to Explanation
Explanation:
Cross Price Elasticity of Demand is a very useful tool in Economics to ascertain if goods are compliments or Substitutes.
Cross Price Elasticity of Demand (CPSD) measures the change in demand in one good due to a change in price is the other good.
If the CPSD is negative then the goods are Compliments meaning that they are used together which is why when the price of one good goes down, the demand of the compliment goes up because more of the original good will be bought due to the lower price.
If the CPSD is Positive, it means that they are Substitutes and a Decrease in price in one good leads to a decrease in demand for the other good because people will demand less of it and switch to the former (now cheaper) good.
The formula is,
= % change in Quantity Demanded of Product A /% change in Price of Product B
a. Splishy splashies and Flopsicles
CPSD = -18%/-1%
= 18%
The CPSD for both these products is 18% which is a positive figure. This means that they are Substitutes and <u>should not be marketed together. </u>
b. Splishy Splashies and Flopsicles
CPSD = 3%/-1%
= -3%
With the CPSD being a negative figure here, these goods are Compliments.
Splishy Splashies and Flopsicles <u>should be Marketed together</u> as they compliment each other.
Answer: (2823, 3417)
Explanation:
The confidence interval for the population mean is given by :-
, where E is the margin of error.
Formula for Margin of error :-
Given : Significance level : 
Sample size = 20
Critical value : 
Margin of error : 
Now, the 95% confidence interval for the population mean will be :-
Answer:
The answer is below
Explanation:
a)
The present cost of design 1A = 2700000 + 175000/r
The present cost of design 1B = 3800000 + 40000/r
Where r is the rate of return.
At breakeven rate of return, the present cost of both designs would be the same. Hence:
2700000 + 175000/r = 3800000 + 40000/r
3800000 - 2700000 = 175000/r - 40000/r
1100000 = 135000/r
r = 135000 / 1100000 = 0.1227
r = 12.27%
Therefore the breakeven rate of return is 12.27%
b) At an MARR of 10% per year, that is r = 0.1:
The present cost of design 1A = 2700000 + 175000/0.1 = $4.45 million
The present cost of design 1B = 3800000 + 40000/0.1 = $4.2 million
At an MARR of 10% per year, design 1B Correct is preferred because it has the lowest cost.
