2.3 explain the importance of an action plan

For fixed-rate bonds it's important to realize that the value of the bond has a(n)-Select relationship to the level of interest

pogonyaev

Answer:

Answer is explained in the explanation section below.

Explanation:

It's necessary to remember that the value of fixed-rate bonds is inversely proportional to the level of interest rates. The value of the bond decreases as interest rates rise; moreover, the value of the bond rises as interest rates fall. A Bond with a lower coupon sells for less than its face value. When the going rate of interest is higher than the coupon rate, this condition arises. The value of the asset would increase over time. A higher coupon bond is one that sells for a higher price than its face value. When the going rate of interest is lower than the coupon rate, this condition arises. Its value will gradually decrease until it reaches its maturity value. A par value bond that sells at par, with a coupon rate equal to the current interest rate. The coupon is usually set at the going market rate on the day the bond is sold, so it sells at par at first.

Calculations:

C = Coupon Payments = $60 (Par Value x Coupon Rate)

n = number of years = 10

i = market rate or required yield = 7% = 0.007

K = number of coupon payments in 1 year = 1

P = value at maturity or par value = 1000

Present value of ordinary annuity formula:

Bond Price = C/k * $[\frac{1 - \frac{1}{(1 + \frac{i}{k})^{nk} } }{\frac{i}{k} } ]$ + $\frac{P}{(1 + \frac{i}{k})^{nk} }$

Just plug in the values and you will get:

Bond Price = 60 x 7.02 + 508.35

Bond Price = 421.41 508.35

Bond Price = $929.76

Similarly,

Data:

C = Coupon Payments = $60 (Par Value x Coupon Rate)

n = number of years = 10

i = market rate or required yield = 7% = 0.007

K = number of coupon payments in 1 year = 2

P = value at maturity or par value = 1000

Present value of ordinary annuity formula:

Bond Price = C/k * $[\frac{1 - \frac{1}{(1 + \frac{i}{k})^{nk} } }{\frac{i}{k} } ]$ + $\frac{P}{(1 + \frac{i}{k})^{nk} }$

Just plug in the values and you will get:

Bond Price = 30 x 14.21 + 502.57

Bond Price = 426.37 + 502.57

Bond Price = $928.94

8 0

3 years ago

Weaver Company's predetermined overhead rate is $21.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour.

Misha Larkins [42]

Answer:

1. $590

2. $9.83

Explanation:

1.

Total Number of Direct Labor Hours:

= Total Labor Cost ÷ Labor Rate Per Hour

= 150 ÷ 15

= 10 Hours

Total Overheads:

= Total Number of Direct Labor Hours*Predetermined Overhead Rate

= 10 × 21

= 210

Total Manufacturing Cost = 230 + 150 + 210

= $590

2.

Average Cost:

= Total Manufacturing Cost ÷ Number of Units

= 590 ÷ 60

= $9.83

3 0

3 years ago

Colors of cars in a mall parking lot is?

juin [17]

Answer: Categorical

Explanation:

Categorical data refers to data that enables variables to be grouped into categories but in such a way that there is no ordering to the categories.

In this scenario, the cars will be grouped by their colors but these colors cannot be ordered by saying that red is higher than blue or yellow is higher than white. It is therefore Categorical data.

6 0

3 years ago

Alpine West, Inc., operates a downhill ski area near Lake Tahoe, California. An all-day, adult ticket can be purchased for $80.

telo118 [61]

Answer:

Alpine West, Inc.

a. When Alpine West, Inc. should recognize revenue from the sale of its season passes evenly over five months from December to April when the passes are put to use.

b. General Journal for

November 6:

Debit Cash Account $460

Credit Deferred Revenue $460

To record the purchase of a season ticket or pass by Jake Lawson.

December 31:

Debit Deferred Revenue $92

Credit Service Revenue $92

To record the ski service consumed by Jake Lawson for December.

c. In Alpine West, Inc.'s income statement and balance for 2013, the following amounts will be included in relation to the sale of the season pass to Jake Lawson:

Income Statement: Service Revenue $92 and related costs.

Balance Sheet: Deferred Revenue (Liabilities side) $368 ($460 - 92).

Explanation:

Alpine West, Inc. will make the above entries in accordance with the accrual concept and matching principle of generally accepted accounting principles. These require that revenue, income, and expenses related to a period must be accrued for that period whether actually received / paid or not. It also means that the costs incurred for any revenue generated must be matched to the revenue and vice versa for that particular period.

7 0

4 years ago

Bonita has the following assets at December 31, 2017. Cash in bank—savings account 120,000 Certificates of deposit (270-day) 200

Deffense [45]

Answer:

$131,500

Explanation:

The reason is that the saving account balance of $120,000 is easily convertible to cash within a seconds which means it must be included in the balance sheet.

Similarly the Cash in hand of $1,200 can be used at the instant so it must also be included in the cash balance in the balance sheet.

Checking account balance is also easily convertible to cash and must be included in the cash figure in the balance sheet by $10,000.

The certificate of deposit and the cash refund due from state taxing authority must not be included in the cash balance at the year end balance sheet because these are not readily convertible to cash in future.

So

Cash balance = $120,000 + $1,200 + $10,000 = $131,500

5 0

4 years ago

2.3 explain the importance of an action plan​

2.3 explain the importance of an action plan