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2 years ago

The present value of an expected future payment ________ as the interest rate increases.

Business

1 answer:

LekaFEV [45]2 years ago

6 0

The present value of an expected future payment "<em><u>falls</u></em>" as the interest rate increases.

This is based on the idea that the bond is paid at a fixed interest rate. Thus as the interest rate increases, the value of the bond decreases or falls because investors would certainly stay away from such bonds, therefore, making its value reduce or fall.

Similarly, if the interest falls, a bond with a fixed interest rate becomes more attractive to investors.

Hence, in this case, it is concluded that the interest rates determine the value of the bond.

Learn more here: brainly.com/question/17175565

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Tickets to a concert are $35 each. In addition to the cost for the tickets ordered, there is a $15 processing charge per order.

Vesnalui [34]

Answer:

Explanation:

Let the cost of an order = C

Let the number of tickets inside that order = n

Let there be a 15 dollar service charge per order.

================

C = 35*n + 15

5 0

3 years ago

John and Jen are married and decide to open three deprecate accounts for their money what is the most likely reason for this

aivan3 [116]

One for just regular card usage, one for savings and one for emergencies.

6 0

3 years ago

Splish Corporation reported the following for 2020: net sales $1,242,800, cost of goods sold $737,700, selling and administrativ

tester [92]

Answer:

1. $192,200

2. $192,200

Explanation:

1. Preparation for the statement of comprehensive income using the one statement format

Splish Corporation Statement of Comprehensive IncomeFor the Year Ended December 31, 2020

Sales revenue $1,242,800

Less Cost of goods sold ($737,700)

Gross profit $505,100

Less Selling and administrative expenses ($329,500)

Net income $175,600

($505,100-$329,500)

Add Unrealized holding gain on available-for-sale debt securities $16,600

Comprehensive income $192,200

Therefore the Comprehensive income for the statement of comprehensive income using the one statement format will be $192,200

2. Preparation a statement of comprehensive income using the two statement format

Splish Corporation Statement of Comprehensive IncomeFor the Year Ended December 31, 2020

Sales revenue $1,242,800

Less Cost of goods sold ($737,700)

Gross profit $505,100

Less Selling and administrative expenses ($329,500)

Net income $175,600

($505,100-$329,500)

Comprehensive Income

Net Income $175,600

Add Unrealized holding gain on available-for-sale debt securities $16,600

Comprehensive income $192,200

Therefore the Comprehensive income for the statement of comprehensive income using the two statement format will be $192,200

8 0

3 years ago

Pera Inc. wishes to issue new bonds. These are 5-year bonds with semi-annual interest; $1,000 par value, and a yield to maturity

Gemiola [76]

Answer:

coupon rate= 13.5%

Explanation:

Giving the following information:

Number of periods= 5*2= 10 semesters

Par value= $1,000

YTM= 0.1/2 = 0.05

Price bond= $1,136

<u>To calculate the coupon rate, first, we need to determine the coupon per semester using the following formula:</u>

Bond Price= coupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

1,136 = coupon*{[1 - (1.05^-10)] / 0.05} + [1,000/(1.05^10)]

1,136 = coupon*7.722 + 613.91

522.09 = coupon*7.722

$67.61=coupon

<u>Now, the coupon rate:</u>

Coupon= par value*(coupon rate/2)

67.61= 1,000*(coupon rate/2)

67.61= 500coupon rate

0.135=coupon rate

coupon rate= 13.5%

5 0

2 years ago

Security P is a preferred stock and Security Z is a zero coupon bond that has 11 years remaining until maturity. Both securities

uranmaximum [27]

The duration of Security P based on the info given will be 11 years.

<h3>How to calculate the time?</h3>

From the information given, Security P is a preferred stock and Security Z is a zero coupon bond that has 11 years remaining until maturity.

Therefore, the duration will be:

= (1 + y)/y

= (1 + 0.1)/0.1

= 1.1/0.1

= 11 years

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6 0

2 years ago