Answer:
$1,061.28
Explanation:
We need to calculate the present value of the bond using the minimum effective rate of 7.1225%
First we calcualte the present value of an annuity of $80 for 10 years
PV = $558.72
Then we calculate the $1,000 in 10 years present value
PV = $502.57
Then we add both values
$502.57 + $558.72 = $1,061.28
This will be the present value AKA market price which yields the minimun rate of 7.1225%
Answer:
the fastest we could drop your price before your monthly revenue starts to drop is $2,000
Explanation:
Data provided in the question:
Cars sold per month, Q = 70 cars
Price of each car, P = $35,000
Rate of increase in demand, = 4 cars per month
Now,
Revenue, R = Price(P) × Quantity (Q)
Thus,
When monthly revenue starts to drop i.e < 0
⇒ =
< 0
or
⇒ < 0
or
⇒ < 0
or
⇒ < - 140,000
or
< - 2,000
Hence,
the fastest we could drop your price before your monthly revenue starts to drop is $2,000