Ask question

Ask question

All categories

1 year ago

11

ABC Co. issued 1 million 6 percent annual coupon bonds that mature in 10 years. The face value is $1,000 per bond. What are the

expected cash flows from one of these bonds?

1 answer:

Leya [2.2K]1 year ago

4 0

Answer:

Explanation:

The expected cash flows from one of these bonds are:

- $60 in interest at the end of each year for 10 years, and

- $1,000 repayment of principal at the end of 10 years.

You might be interested in

As specialization increases in an economy, businesses tend to experience: a.) an increase in self sufficiency due to businesses

Anuta_ua [19.1K]

Answer: a growing division of labor between employees with different skills

Explanation: apex

8 0

2 years ago

Read 2 more answers

At the beginning of the current period, Kingbird Corp. had balances in Accounts Receivable of $192,800 and in Allowance for Doub

Delicious77 [7]

Kingbird Corp

A.

Dr Account Receiveable $722,500

Cr Sales Revenue $722,500

B.

Dr cash $708,940

Cr Account receivable $708,940

C.

Dr Bad debt expense $14,220

($22,740-$8,520)

Cr Allowance for Doubtful Account $14,220

3 0

1 year ago

Anne Lockwood, manager of Oaks Mall Jewelry, wants to sell on credit, giving customers 3 months to pay. However, Anne will have

Alja [10]

Answer:

15.18%

Explanation:

Calculation for the nominal annual rate

First step is to find EFF% using this formula

EFF%=[1+(Nominal rate percentage/Numbers of months in a year )]^Numbers of months in a year

Let plug in the formula

EFF%=[1+(15%/12)^12

EFF%=(1+0.0125)^12

EFF%=(1.0125)^12

EFF%=1.1608×100%

EFF%=116.08%

Second step is to find Rnom compounding quarterly of 116.08% using this formula

Rnom compounding quarterly = (1+(R/4)^4

Let plug in the formula

Rnom compounding quarterly= (116.08%)^(1/4) Rnom compounding quarterly= 1+ R/4

Hence,

Rnom compounding quarterly = 15.18%

Therefore Anne Lockwood should quote her customers with Rnom compounding quarterly of 15.18%

6 0

1 year ago

The company's total assets are $40,000. The following is a listing of the company’s accounts and account balances as of December

galina1969 [7]

Answer:

Determine the balance of the Cash account.

$3,800 Cash

Explanation:

As the total assets it's $40,000 by difference it's possible to find the total balance of cash account.

There are 3 accounts which belongs to the asset part, Accounts Receivable, Supplies and Equipment, by difference with the total balance of Assets it's possible to find the balance of Cash.

$40,000 TOTAL ASSETS

Minus

-$8,000 Accounts Receivable

-$2,000 Supplies

-$26,200 Equipment

$3,800 Cash

December 31, Year 3

$3,800 Cash

$8,000 Accounts Receivable

$2,000 Supplies

$13,800 TOTAL CURRENT ASSETS

$26,200 Equipment

$26,200 TOTAL NONCURRENT ASSETS

$40,000 TOTAL ASSETS

$8,000 Accounts Payable

$0,000 Income Tax Payable

$8,000 TOTAL CURRENT LIABILITIES

$8,000 TOTAL LIABILITIES

$17,000 Retained Earnings

$15,000 Common Stock

$32,000 TOTAL EQUITY

$40,000 TOTAL EQUITY + LIABILITIES

7 0

2 years ago

Two mutually exclusive projects have 3-year lives and a required rate of return of 10.5 percent. Project A costs $75,000 and has

Norma-Jean [14]

Answer:

Both projects should be rejected

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

For project A,

Cash flow in year zero = $75,000

Cash flow in year one = $18,500

Cash flow in year two = $42,900

Cash flow in year three = $28,600

IRR = 9.12%

For project B,

Cash flow in year zero = $-72,000

Cash flow in year one = $22,000

Cash flow in year two = $38,000

Cash flow in year three = $26,500

IRR = 9.48%

The decision rule on if to invest or not is if IRR > r

For both investments IRR is less than rate of return

9.12% < 10.50%

9.48% < 10.50%

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button, and the compute button.

I hope my answer helps you

8 0

2 years ago