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Genrish500 [490]
3 years ago
12

Bond A is a one-year zero-coupon bond with $1,000 face value and a market price of $925. Bond B is a two-year zero-coupon bond w

ith $1,000 face value and a market price of $895. Bond C is a two-year bond that trades in the same market as Bonds A and B, has the same risks as these bonds, and has a $1,000 face value, and an annual coupon payment of 5%. What do you think the market price of Bond C should be________.
Business
1 answer:
Karolina [17]3 years ago
6 0

Answer:

The Market Price of Bond C

Coupon (R) = 5% x 1,000 = $50

Bond yield Kd = 5% = 0.05

Po = R(1-(1+r)-n)/k +  FV/ (1+r)n

Po = 50(1-(1+0.05)-2)/0.05 + 1,000/(1 + 0.05)2

Po = 50(1-(1.05)-2)/0.05 + 1,000/ (1.05)2

Po = 50(1-(0.9070))/0.05 + 1,000/ (1.05)2

Po = 50/1.86 + 907.03

Po = 26.88 + 907.03

Po = $933.91

Explanation:

The market price of bond C equals present value of the coupon plus the present value of the face value. The present value of the coupon is obtained by discounting the coupon at the present value of annuity factor of 5% for 2 years. The 5% bond yield is used because the bonds belong to the same risk class and the yield of this class is 5%.

The present value of the face value of the bond is determined by discounting the face value at the present value factor of 5% for 2 years.

The aggregate of the two present values give the current market price of Bond C.

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​Jack, an employee of Desert​ Sky, Inc., has gross salary for May of . The entire amount is under the OASDI limit of​ $118,500 a
Zanzabum

Answer:

Credit to Cash for $4,995 is correct

Explanation:

here is a complete question

has a gross salary for May of $7,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 21%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICA-OASDI Tax of 6.2 % and FICA-Medicare Tax of 1.45%. Round the final answer to the nearest dollar.) A. debit to Cash for $4,995 B. debit to FICA Tax Payable of $4,995 O C. debit to Employee Income Tax Payable of $4,995 D. credit to Cash for $4,995

The computation of the amount that becomes the part for accrual the employer payroll taxes is shown below:

Gross Pay                   $7,000  

Less: Deductions    

Federal Income tax       $1,470            ($7000 × 21%)

FICA-OASDI tax             $434              ($7000 × 6.2%)

FICA-Medicare tax         $102              ($7,000 × 1.45%)

Total Deductions          2006  

Net pay                         $4,995  

4 0
2 years ago
Illinois​ Furniture, Inc., produces all types of office furniture. The​ "Executive Secretary" is a chair that has been designed
viktelen [127]

Answer:

hello your question is incomplete attached below is the missing table to your question

Illinois​ Furniture, Inc., produces all types of office furniture. The​ "Executive Secretary" is a chair that has been designed using ergonomics to provide comfort during long work hours. The chair sells for​ $130. There are 480 minutes available during the​ day, and the average daily demand has been 50 chairs. There are eight tasks

answer : a) 9.6 minutes

               b) 5 work stations

               c) choose initial task and task with maximum task time

               d) 21 minutes

Explanation:

A) cycle time for the production of a chair

cycle time = (production time available per day ) / ( unit demand per day )

                 = 480 minutes / 50 chairs

                 = 9.6 minutes ≈ 10 minutes

B) theoretical minimum number of workstations

    = Total task / cycle time

 where total task = (4 + 7 + 6 + 5 + 6 + 7 + 8 + 6 ) = 49 minutes

             cycle time = 9.6 minutes

hence theoretical minimum number of workstations = 49 / 9.6 = 5.1

 ≈ 5 workstations

C ) Assignment of tasks to workstations

      attached below

you will choose the initial/first task and also the task with maximum tax time

D) For the process the total idle time per cycle

total idle time = summation of all idle times for the 8 tasks = 21 minutes

Task A, C = 0 minutes

Task B = 3 minutes

Task E = 4 MINUTES

Task F = 3

Task G = 2

Task H = 4

Task D = 5

6 0
2 years ago
Cindy has been working for 8 years, and she’s built up a huge emergency fund -- $45,000, which would be 6 months of her salary.
baherus [9]

Answer with Explanation:

Following are some types of account investments that are better for emergency funds and the return on these investment varies depending upon the risk born by the investors:

  • Current Account Investments
  • Commodity Investments
  • Mutual Funds

If the inflation rate is below the return paid on the current account then it could be a better investment option as the money doesn't loose its value over time.

If the inflation rate is higher than the return paid on the current account then it is better to invest in commodities like gold, petroleum products, etc, that are often termed as speculative investments.

If the investor is risk seeking person, then it is better to invest in mutual funds as the return on such investments is higher because of the higher risk that the investor bears.

6 0
2 years ago
Brenda wants to buy a new car and has a budget of $25,000. she has just found a magazine that assigns each car an index for styl
IgorC [24]
For each $5000 she spends on the style the record ascends by one, so the most she can accomplish is an auto with style list of 5. For each $2500 she spends on gas mileage the file ascends by one, so the most she can accomplish is an auto with a gas-mileage file of 10. The slant of her spending line is in this way ½.
6 0
2 years ago
A firm selling its product for $25,000 has overproduced, increasing inventory by 40,000 units at a cost of $15,000 per unit. Wha
mario62 [17]

Answer:

Increasing Inventory by 40,000 units at a cost of $15,000 per unit

The Cost of producing 40,000 units extra = $40,000 *$15,000 = $600,000,000

Conclusion: As this is an additional cost incurred by the firm by increasing inventory by 40,000 unit at $15,000 per unit, it will be term as cash outflow.  The impact of the inventory change on cash flow is outflow.

8 0
2 years ago
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