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2 years ago

How does opportunity cost affect decision making

1 answer:

7 0

Opportunity costs apply to many aspects of life decisions. Often, money becomes the root cause of decision-making. If you decide to spend money on a vacation and you delay your home's remodel, then your opportunity cost is the benefit of living in a renovated home.

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A $1,000 par bond with a semi-annual coupon and 12 years to maturity is currently priced $880 and has a yield to maturity of 5.3

jok3333 [9.3K]

Answer:

Annual Coupon rate = 0.040005 or 4.0005% rounded off to 4.00%

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = C

Total periods (n) = 12 * 2 = 24

r or YTM = 0.0537 * 6/12 = 0.02685 or 2.685%%

The formula to calculate the price of the bonds today is attached.

We will first calculate the value of semi coupon payment made by the bond.

880 = C * [( 1 - (1+0.02685)^-24) / 0.02685] + 1000 / (1+0.02685)^24

880 = C * 17.52482779 + 529.4583737

880 - 529.4583737 = C * 17.52482779

350.5416263 / 17.52482779 = C

C = 20.0025718 rounded off to 20.00

The annual coupon payment will be = 20.0025718 * 2 = 40.00514361 rounded off to 40.01

Annual Coupon rate = 40.00514361 / 1000 = 0.040005 or 4.0005% rounded off to 4.00%

5 0

2 years ago

Annual manufacturing cost data (1000s) for four product lines are as follows:

nadezda [96]

Answer:

1st rank Line 3

2nd rank Line 1

3rd rank Line 2

4th rank Line 4

Explanation:

Using a spreadsheet approach all of the costs information can be set in excel such that it starts with costs of direct materials followed by the cost of direct labor with summing up to be prime costs of production.

However,the total indirect is then apportioned to the product in proportion of the product's total direct costs(the prime costs) as done in the attached spreadsheet.

The manufacturing cost per unit is the total manufacturing costs divided by annual production in each case.

Find attached.

Download xlsx

7 0

2 years ago

The method of least squares was used to develop a cost equation to predict the cost of monthly equipment maintenance. The follow

lisabon 2012 [21]

Answer:

correct option is b. $200,000

Explanation:

given data

Intercept = 40,000

Slope = 20

machine hours X = 8000

to find out

what is the predicted cost of equipment maintenance for April

solution

we will use here least square equation that will be

Y = intercept + Slope × X ............................1

here Y is cost of maintenance and X is maintenance hours

so put here value we get from equation 1

Y = 40000 + ( 20 × 8000 )

Y = 40000 + 160000

Y = 200000

so predicted cost of equipment maintenance for April is 200000

correct option is b. $200,000

4 0

2 years ago

In risk management, what does risk evaluation involve?

Annette [7]

In risk management, risk evaluation involve Risk resolution. The evaluation process is carried out by management.

Risk is the threat of things going wrong or having a negative impact on the operations of the organization. The risk can be of many types including and not limited to audit risk, control risk, credit risk, business risk, inherent risk, financial risk and more.

Risk is evaluated by the management to minimize the effects and mitigate the risk. There are several steps that are performed to analyze the risk and many ways are there to lower the effects of risk.

Risk resolution is the management strategies to analyze the risk and the best ways to mitigate the effects. Transfer the risk, avoid the risk by changing the decision, reduce and accept.

Learn more about Risk at brainly.com/question/27247805

#SPJ1

4 0

1 year ago

Suppose that after hurricane Irene, the average income in Cape Charles, Virginia decreased by 16 percent. In response to this

SIZIF [17.4K]

Answer:

0.875

Explanation:

The income elasticity of demand measures the responsiveness of quantity demanded to changes in income.

Income elasticity of demand = percentage change in quantity demanded / percentage change in income

14% / 16% = 0.875

Demand is inelastic because the coefficient of elasticity is less than one.

I hope my answer helps you

3 0

2 years ago