Answer:
Explanation:
the present value of the future cash flows is the the value of the bond we calculate the present value as follows
Cash flow 4% = 40000 per year for 4 year p.v using annuity
Cash flow = 1000000 at year four present value using compound formula
Present value at yield rate 7.7%
Cash flow Discount Factor Present Value
1000000 0.743253883 743253.8831
40000 3.334365155 133374.6062
876628.4893
Compound = 1000000/(1+7.7%)^4
Annuity = 40000* (1-(1+7.7%)^-4) / 7.7%
Answer:
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Explanation:
Inferior goods are goods whose demand falls when income rises and increases when income falls.
When the price of beer changes, there are two effects that determine the quantity demanded. They are :
1. the substitution effect
2. the income effect
The substitution effect looks at the change in price of a good relative to other goods. When the price of beer decreases, it becomes cheaper relative to other goods. Thus, the demand for it increases.
The income effect looks at how a change in price affects real disposable income. When price of beer reduces, disposable income increases. Because beer is an inferior good, it would lead to a decrease in the demand for beer
Answer:
(a) The call price would decrease (b) $8 per share (c) $6 per share
Explanation:
Solution:
The Call option is the right to sell a specified security at a specified price on a future date.
(a) The value of call option/ price will decrease
Since after payment of dividend, the market price of share will decrease
Hence, value of call option will decrease
(b)The Intrinsic Value = Market Price - Strike price
= $50 - $42
= $8 per share
(c)The time Value = Option Premium - Intrinsic Value
= 14-8
= $6 per share
you too!
I don't really like valentines day, I'm probably just gonna hang out with my friend and play Minecraft ;-;
Answer: Debit Cash $1,261; debit Cash Over and Short $21; credit Sales $1,282.
Explanation:
The total that is being shown by the cash register will be the sales for the day so $1,282 should be credited to the Sales account.
The actual cash in hand will be debited to the Cash account which means it will be debited by $1,261.
The difference between the sales and the actual cash on hand will be debited to an account called the Cash Over and Short amount which is an expense account used to account for differences in cash amounts.