Answer:
Answer: Annual Profit for Bank = $1000000
if all interest rates were to rise by 1 percent? there shall be no effect on Profits.
Explanation:
The bank faces the risk that the short-term interest rate will increase (Rise) before the second year, this will increase the amount of interest the bank has to pay on the CD but there will be no changes in the interest income that the bank receives from the Treasury.
2.
Annual income of bank = Annual interest on Treasury note = $50000000 * 4% = $2000000
Annual expense of bank = Annual interest on CD= $50000000 * 2% = $1000000
Annual Profit for Bank = $2000000 - $1000000 = $1000000
3. If all interest rate rises by 1% then:
Annual income of bank = Annual interest on Treasury note = $50000000 * 5% = $2500000
Annual expense of bank = Annual interest on CD= $50000000 * 3% = $1500000
Annual Profit for Bank = $2500000 - $1500000 = $1000000
Hence, there shall be no effect on Profits.
Answer:
progressive elaboration
Explanation:
progressive elaboration is an important part or step of project management plan, it is the process of continously updating, improving and detailing a project management plan, or part of it as new specific information becomes available. it is use to improve the project management plan
Answer:
$ 20,857.65
Explanation:
The interest expense for the first interest expense is cash proceeds from the bond issuance multiplied by the 10% market interest rate adjusted for semiannual amount by multiplying by 6 months and dividing by 12 months.
Interest expense=cash proceeds*market interest rate*6/12
cash proceeds is $417,153
market interest rate is 10%
interest expense for the six-month period ending June 30 2019=$417,153*10%*6/12=$ 20,857.65
The first interest expense is closest to $ 20,857.65
Answer:
A cooperative effort among two or more organizations that share a common interest in a business enterprise or undertaking.
Explanation:
A joint venture is defined as a business agreement where two or more parties pool their resources together to achieve a common goal. Usually profits and losses are shared equally among the parties unless there is an agreement to share otherwise.
The joint venture is an independent entity that is seperate from its owners. That means any liability of the joint venture is not binding on the parties involved.
Answer:
Project's net present value is: $-1,725,937.
Explanation:
Project actual variable cost = 45% x sales = $1,292,850 ( as variable expense ratio post-audit turns out to be 45%).
Actual net operating income each year = Sales - Variable cost - total fixed expenses = $309,750.
Thus, cash flows of the project will be:
Year 0: $-2,782,000.
Year 1 to Year 4: $309,750.
Year 5: 309,750 + 200,000 (salvage value of equipment) = $509,750
NPV of the project = -2,782,000 + [ (309,750/18%) x ( 1 - 1.18^-4) ] + 509,750/1.18^5 = $-1,725,937.
