Answer:
$1,161.46
Explanation:
In order to determine the current bond price we can use an excel spreadsheet and the present value formula: =PV(Rate,Nper,PMT,FV)
where:
- Nper = 14 x 2 = 28 (15 year bond issued 1 year ago = 14 years)
- Rate = 5.8% / 2 = 2.9% (semiannual payments)
-
PMT = ($1,000 x 7.5%) / 2 = $37.50
- FV = $1,000 (face value of bonds)
-
PV = ?
Current price =PV(Rate,Nper,PMT,FV) =PV(2.9%,28,37.50,1000) = $1,161.46
Answer:
John should include $1,600 as rental income on his Year 4 tax return as a result of the $2,000 payment.
Explanation:
As a cash-basis taxpayer, John's taxable income is based on the actual cash receipts and payments made in the accounting period. The refundable part of the rent should not be included as rental income since it is a security deposit that would be returned at the end of the lease period. If John were an accrual-basis taxpayer, the rental income to be included would have been only $800 representing income for Year 4.
Answer:
The value of the stock = $19.64
Explanation:
According to the dividend valuation model, <em>the value of a stock is the present value of the expected future cash flows from the stock discounted at the the required rate of return.</em>
Year Workings Present value(PV)
1 $1 × (1.22) × 1.11^(-1) = 1.10
2 $1 × (1.22)^2 ×(1.11)^(-2) = 1.21
3 $1 × ((1.22)^2 × (1.05))/0.11-0.05) = 21.35 ( PV in year 2 terms)
PV (in year 0) of Year 3 dividend = 21.35 × 1.11^(-2)
= 17.33 (see notes)
<em>The value of the stock</em> = $1.10+ $1.21 + 17.3
= $19.64
Notes:
<em>Note the growth applied to year 3 dividend gives the PV in year 2 terms. So we need to re-discount again to year 0.</em>
<em />
The value of the stock = $19.64
Answer:
Net Income (Loss) = $440,000
Explanation:
Total Fixed Cost = $460000
Total Variable Cost = $11 * 100,000 unit = $1100000
Total Revenue = $20 * 100,ooo unit = $2000000
Contribution Margin = TR- TVC = ($200,000 - $1,100,000) = -$900,000
Net Income = Contribution margin - Total Fixed cost
Net Income (Loss) = $900,000 - $460,000
= $440,000
The question that cannot be answered based on the information in the delivery truck data base is 2) What is the average number of customer deliveries made by each truck on a particular day?
<h3>Why can this question not be answered?</h3>
In order to answer this question, the number of customers that each truck delivered to during the day needs to be recorded.
The total number of deliveries will then be added up and divided by the number of trucks making deliveries.
The information on the number of deliveries made is not in the database so this question cannot be answered.
In conclusion, option 2 is correct.
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