Truth in lending "trigger terms"MUST disclose amount or % of down payment and terms of repayment and APR spelled out
Answer:
a. What is the expected return of the risky corporate bond over the 5-year holding-period (in %)?
expected return in $ = (50% x 20% x $1,000 x 4) + (50% x 35% x $1,000 x 4) = $400 + $700 = $1,100
holding period return = ($1,100 - $1,000) / $1,000 = 10%
b. What is its effective annual return?
(1 + 10%)⁰°² - 1 = 1.92%
b. What is its effective annual return?
- 2. The government bond is the superior investment
The yield of he corporate bond is very low and the risk is too high.
Answer:
C. debit cash, credit premium on bonds payable and bonds payable
Explanation:
Since the contract rate is greater than the market rate, the bond is issued at a premium. And, the journal entry is shown below:
Cash A/c Dr XXXXX
To Premium on bonds payable A/c XXXXX
To Bonds payable A/c XXXXX
(Being bond is issued at a premium is recorded)
When the bond is issued at a premium, we debited the cash account and credited the premium on bonds payable and bonds payable account
Answer:
profit margin 7.77%
<em><u>Interpretation: </u></em> from evey dollar of sales the firm achieves almost 8 cent of net income
inventory turnover ratio 3.45
<em><u>Interpretation: </u></em>the inventory is sold 3 and a half times during the year
Explanation:
the profit margin is the quotient between net income and sales.
127,500 / 1,640,000 = 7.77%
the inventory turnover wil be the cost of good sold over the average inventory during the year
(312,500 + 257,500)/ 2 = 285,000
982,500 / 285,000 = 3,447368421
Answer:
The correct option is 2
Explanation:
Let us assume the current value of the investment be x
And the annual growth factor of the investment is 1.2
1. The investment value has increased or risen by 44% since it was first made
It is known that the combined growth factor of the investment is 1.44 and no information is stated regarding the actual ($) values. Therefore, the unique value could not be computed.
So, this statement lacks information and insufficient to solve for x.
2. 1 year ago, the withdrawn money worth is $600 and at present the worth of the investment would be 12% less than the actual worth.
1 year ago, the value of the investment was x / 1.2. So, the equation could be set up regarding the withdrawal.
The equation would be:
= (x/ 1.2- 600) × (1.2)
=0.88x
Therefore, the unique value to could be answered and the sufficient to answer.
NOTE: The options are missing. So I am providing the answer with the options.
