1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
polet [3.4K]
3 years ago
10

This morning, you purchased a seventeen-year, 6.45% annual coupon bond with face value of $1,000 at a price of $1,030.04. Just a

fter purchasing the bond, the yield to maturity of the bond falls to 5.50 percent and stays at that level throughout your investment period. If you sell your bond after holding it for seven years, what will be your realized rate of return
Business
1 answer:
iogann1982 [59]3 years ago
8 0

Answer:

6.73%

Explanation:

the price of the bond in seven years is:

PV = $1,000 / (1 + 5.50%)¹⁰ = $585.43

PV of coupon payments = $64.50 x 7.538 (PVIFA, 5.5%, 10 years) = $486.20

market price = $1,071.63

using an excel spreadsheet of financial calculator, the annual rate of return:

year 0 = -1030.04

year 1 = 64.5

year 2 = 64.5

year 3 = 64.5

year 4 = 64.5

year 5 = 64.5

year 6 = 64.5

year 7 = 1136.13

IRR = 6.73%

You might be interested in
Which of the following statements regarding a tax sheltered annuity (tsa) is incorrect? the income from the tsa is received inco
Fudgin [204]

The incorrect statement is : The income from the TSA is received income tax-free. Upon retirement, payments received by employees from the accumulated savings in tax-sheltered annuities are treated as ordinary income.

5 0
3 years ago
The Lincoln Company produces a wide range of furniture, such as cabinets, bookcases, and bureaus. It divides its consumer market
SashulF [63]

Lincoln company's strategy of dividing its consumer market will enables it to define customer needs and wants more precisely.

<h3>What is the strategy used by Lincoln company?</h3>

In marketing, this is known as segmentation which involves division of customers according to their segment such as age, needs, gender etc.

Here, as the firm has divided its consumer market into several groups that have similar interests in wooden furniture, this will allow them to define customer needs and wants more precisely.

Therefore, the Option B is correct.

Read more about segmentation

<em>brainly.com/question/7181203</em>

#SPJ1

4 0
2 years ago
Morgan Company uses the perpetual inventory system and the gross method of recording sales discounts. Morgan Company sold $60,00
o-na [289]

Answer:

$60,000

Explanation:

Given that

Sale value of the merchandise = $60,000

Credit terms =  2/10, n/30

The cost of the merchandise sold = $45,000

So by considering the above information

The amount which is credited to account receivable is $60,000 as under the gross method the sale is recorded at the actual value of the inventory sold without considering the discount adjustment

6 0
3 years ago
MSI’s educational products are currently sold without any supplemental materials. The company is considering the inclusion of in
Ne4ueva [31]

Answer:

Explanation:

There are 2 ways in which this question can be solved:

Method 1 find all the unit cost of production add them together and multiply by the unit to be produced.

Method 2: break down each component of production and multily each by the unit to be produced.

However the method to be used depends on the nature of the question if it’s a multiple choice question Method A is faster and should be applied while if it’s a theory question Method 2 is to be applied since marks would be awarded at each point of calculation.

Note that Total Revenue is calculated the same way Price * Quantity

From the attachment:

This question let’s refer to product CD as A and CD with instructional material as B

Cost have been separated and reported in a tabular format

Step 1: Find Total Revenue first

Step 2: Multiply each cost per unit for both products by the quantity to be produced

Step 3: Fixed cost per unit is to be multiplied by no of units to be produced

Step 4: Sum all costs together

Step 5: deduct from Total Revenue to arrive at Profit

From the solution, Total Cost for CD is $455,000 while Total Revenue is $672,000

CD Instrumental Material Total cost $644,000 while Total revenue is $1,092,000

For the purpose of decision making the product with the highest revenue is to be produced which is CD Instrumental with Material which generates a revenue of $448,000.

8 0
3 years ago
In recent years, lenders have been unwilling to relieve borrowers from personal liability in the event of fraud, environmental p
bija089 [108]

Answer:                          

bad boy carve-out" clause

Explanation:

"Bad boy" carve-outs are utilized in anti-recourse commercial property mortgages. Basically, such carve-outs offer the debtor the right to not become directly "on the line" in the circumstance of an anti-recourse failure on the conditions of the bond, but leave creditors safe if the applicant is a "bad boy."

The fact of the matter is that historically, all non-recourse credits have some degree of redress in case if the debtor becomes a "bad boy," then they will be no longer covered by the value of the loan anti-recourse clauses and then become fully liable for the overall related point and its many aspects.

5 0
3 years ago
Other questions:
  • On January 10, 2017, a man in Lebanon, Virginia, frustrated with the DMV bureaucracy, paid his DMV bill with 300,000 pennies tha
    12·1 answer
  • You are a rising star in the purchasing department at your company and you have recently been promoted to manager for business s
    5·1 answer
  • Which of the following will typically offer the highest interest rate
    10·2 answers
  • Dirk opened up a savings account with $600. at a yearly interest rate of 5 percent that is compounded monthly, how much interest
    10·1 answer
  • Unlike​ wholesalers, _______ do not own the goods that they distribute to​ customers; rather, they serve as independent sales re
    6·1 answer
  • Which of the following is an organizational factor that increases illegitimate political behavior?
    7·1 answer
  • Which market structure has a single company or seller in a market with many barriers to entry?
    15·1 answer
  • US Corp. is charged with determining which small projects should be funded. Along with this assignment, she has been granted the
    8·1 answer
  • Whats the difference between life values and work values
    8·1 answer
  • A transfer payment is a payment made by a. firms, but not in exchange for capital equipment. b. foreigners, but not in exchange
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!