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3 years ago

A bond with a face value of $1,000 that sells for $1,000 in the market is called a _____ bond.

Business

2 answers:

Kay [80]3 years ago

7 0

A bond with a face value of $1,000 that sells for $1,000 in the market is called a par bond.

When a bond trades for its face amount, this is called a flat or a par bond. There is no gain or loss compared to the face value.

sleet_krkn [62]3 years ago

6 0

Have any answers to the question

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If any, which of the following statements is FALSE?A. NPV measures the value created by taking on an investmentB. NPV indicates

dedylja [7]

Answer:

C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.

Explanation:

NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.

Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.

Thus, false statement is

Statement C

3 0

3 years ago

Project Q has an initial cost of $257,412 and projected cash flows of $123,300 in Year 1 and $180,300 in Year 2. Project R has a

ss7ja [257]

Answer:

b) Accept Project R and reject Project Q

Explanation:

We can use the following method to solve the given problem in the question

We are given

Project Q: Initial Cost = $ 257,412

Projected Cash Flows: Yr 1 : $ 123,300 Yr 2 : $ 180,300

Total Present Value of all the Future Cash Flows using 12.2% as Rate of Return

= 123,300/1.122 + 180,300/(1.122*1.122)

= 109,893 + 143,222

= $ 253,115

Profitability Index = Total Present Values of all Cash Inflows / Initial Investment

= 253,115 / 257142 = 0.98

Since the Initial Investment is greater than the Present Value of Cash Inflows, that is, l Profitability Index < 0 the Project should not be selected.

Project R: Initial Cost = $ 345,000

Projected Cash Flows: Yr 1 : $ 184,500 Yr 2 : $ 230,600

Total Present Value of all the Future Cash Flows using 12.2% as Rate of Return

= 184,500/1.122 + 230,600/(1.122*1.122)

= 164,438.5 + 183,178

= $ 347,616.5

Profitability Index = Total Present Values of all Cash Inflows / Initial Investment

= 347,616.5 / 345,000 = 1.01

Since the Initial Investment is lower that the Present Value of the Cash Inflows, that is, Profitability Index > 0 the Project should be selected.

Accept Project R and Reject Project Q, so option B is the correct answer

8 0

3 years ago

The following information pertains to Peak Heights Company:

Delvig [45]

Answer:

Peak Heights Company

PEAK HEIGHTS COMPANY

Statement of Cash Flows

Operating Activities Section

Net income $15,625

Non-cash flow: Depreciation 6,700

Changes in working capital:

Accounts receivable -$4,400

Inventory 4,000

Salaries payable 750

Net cash from operating activities $22,675

Explanation:

A) Data and Calculations:

Peak Heights Company:

Income Statement for Current Year

Sales $85,900

Expenses Cost of goods sold $51,675

Depreciation expense 6,700

Salaries expense 11,900 70,275

Net income $15,625

Partial Balance Sheet Current year Prior year Changes

Accounts receivable $9,800 $14,200 -$4,400

Inventory 13,100 9,100 4,000

Salaries payable 1,620 870 750

5 0

3 years ago

At year-end, the following additional information is available: a. The balance of Prepaid Rent, $4,920, represents payment on Oc

Rudiy27

Question Completion:

The December 31, 2018, unadjusted trial balance for Demon Deacons Corporation is presented below.

Accounts Debit Credit

Cash $ 8,100

Accounts Receivable 13,100

Prepaid Rent 4,920

Supplies 2,100

Deferred Revenue $ 1,100

Common Stock 11,000

Retained Earnings 4,100

Service Revenue 37,520

Salaries Expense 25,500

Total $ 53,720 $ 53,720

Use the following additional information to prepare the adjusted Trial Balance.

Answer:

Demon Deacons Corporation

Adjusted Trial Balance

As of December 31, 2018

Accounts Debit Credit

Cash $ 8,100

Accounts Receivable 13,100

Prepaid Rent 3,280

Supplies 610

Deferred Revenue $ 825

Common Stock 11,000

Retained Earnings 4,100

Salaries Payable 700

Service Revenue 37,795

Rent Expense 1,640

Salaries Expense 26,200

Supplies Expense 1,490

Total $ 54,420 $ 54,420

Explanation:

a) Data and Analysis:

a. Rent Expense $1,640 Prepaid Rent, $1,640 ($4,920 * 2/6) rent from November 1, 2018, to April 30, 2019.

b. Deferred Revenue, $275 Service Revenue $275

c. Salaries Expense $700 Salaries Payable $700

d. Supplies Expense $1,490 Supplies $1,490

Accounts Debit Credit

Cash $ 8,100

Accounts Receivable 13,100

Prepaid Rent 4,920 - 1,640 = 3,280

Supplies 2,100 - 1,490 = 610

Deferred Revenue $ 1,100 -275 = 825

Common Stock 11,000

Retained Earnings 4,100

Salaries Payable 700

Service Revenue 37,520 + 275 = 37,795

Rent Expense 1,640

Salaries Expense 25,500 + 700 = 26,200

Supplies Expense 1,490

Total $ 53,720 $ 53,720

4 0

3 years ago

Quadcopters plans to sell a standard quadcopter (toy drone) for $ 55 and a deluxe quadcopter for $ 85. Funtime purchases the st

Harman [31]

Answer:

For break-even, number of standard quadcopter sold should be 238

and, number of standard quadcopter sold should be 2 × 238 = 476

to earn $7,700, number of standard quadcopter sold should be 392

and, number of standard quadcopter sold should be 2 × 392 = 784

Explanation:

Given:

Selling cost of standard quadcopter = $55

Selling cost of deluxe quadcopter = $85

Purchasing cost of standard quadcopter = $45

Purchasing cost of deluxe quadcopter = $65

monthly fixed expenses = $ 11,900

Now,

let the number standard quadcopter sold be 'x'

thus, according to the question

the number deluxe quadcopter sold will be = 2x

also,

at break-even

total cost = total revenue

Total fixed cost + Total purchasing cost = Total revenue

$11,900 + ($45x + $65 × 2x) = $55x + $85 × 2x

$11,900 + $45x + $130x = $55x + $170x

$11,900 + $175x = $225x

$225x - $175x = $11,900

$50x = $11,900

x = 238

Hence,

For break-even, number of standard quadcopter sold should be 238

and, number of standard quadcopter sold should be 2 × 238 = 476

To earn $7,700

Earning = Total Revenue - Total cost

$7,700 = ( $55x + $85 × 2x ) - [$11,900 + ($45x + $65 × 2x)]

$7,700 = $225x - $11,900 - $175x

$7,700 + $11,900 = $50x

$50x = $19,600

x = 392

Therefore,

to earn $7,700, number of standard quadcopter sold should be 392

and, number of standard quadcopter sold should be 2 × 392 = 784

4 0

3 years ago