Answer:
6.67% and 6.694%
Explanation:
The computation of the approximate yield to maturity and the exact yield to maturity is shown below:
For Approximate yield to maturity it is
= 2 × ((Face value - current price) ÷ (2 × time period) + face value × coupon rate ÷ 2) ÷ (Face value + current price) ÷ 2)
=2 × (($1,000 - $950) ÷ (2 × 10) + $1,000 × 6% ÷ 2) ÷ (($1,000 + $950) ÷ 2)
= 6.67%
Now
the Exact yield to maturity is
= RATE(NPER,PMT,-PV,FV)
= RATE (10 × 2, 6% × $1000 ÷ 2,-$950,$1,000) × 2
= 6.694%
Answer:
The correct answer is: her marginal benefit per dollar for bagels will decrease, and her marginal benefit per dollar for cream cheese will increase.
Explanation:
Anne has $20 to spend on two goods bagels and cream cheese.
The marginal benefit per dollar for bagels is $6.
The marginal benefit per dollar for cream cheese is $10.
If she decides to buy more bagels and less cream cheese, the marginal benefit per dollar for bagels will decrease and marginal benefit per dollar for cream cheese will increase.
The marginal benefit per dollar for a commodity is the ratio of marginal utility derived from consuming the last unit of the commodity upon price of the commodity.
As more and more quantity of a commodity is consumed the marginal benefit per dollar for it will go on declining. This is because the marginal utility derived from each additional unit will go on declining while price will remain the same. The less the commodity is consumed, the marginal benefit per dollar for it will increase.
Answer:
1. Repainted the office building: This should be capitalized.
2. Added a new wing onto the office building: This should be capitalized.
3. Took their fleet of cars in for servicing (changing the oil, etc.).: This should be expensed.
5. Had an engine rebuilt in one of their fleet cars: This should be capitalized.
4. Added newer electronic locks on the doors in the production building: This should be expensed.
Explanation:
1. Repainted the office building: This should be capitalized. This is because repainting is a repair that will restore the physical structure of the office building and significantly improve it. Since it is a capital improvement cost, it should be capitalized and depreciated like other fixed assets.
2. Added a new wing onto the office building: This should be capitalized and depreciated like other fixed assets since it is a capital expenditure that significantly added to the structure of the office building.
3. Took their fleet of cars in for servicing (changing the oil, etc.).: This falls under repair and should be expensed.
4. Added newer electronic locks on the doors in the production building: This should be expensed. Cost of locks and keys are ordinary expenses that do not improve the physical structure of the production building.
5. Had an engine rebuilt in one of their fleet cars: This should be capitalized. It is a tangible improvement to the fleets of cars and this kind of costs fall under capital expenditures.
