Answer:
a. Assuming you purchased the bond for $850, what rate of return would you earn if you held the bond for 30 years until it matured with a value $5,000?
future value = present value x (1 + r)ⁿ
- future value = $5,000
- present value = $850
- n = 30
5,000 = 850 x (1 + r)³⁰
(1 + r)³⁰ = 5,000 / 850 = 5.882652
³⁰√(1 + r)³⁰ = ³⁰√5.882652
1 + r = 1.0608444
r = 0.0608444
r = 6.08%
b. Suppose under the terms of the bond you could redeem the bond in 2025. DMF agreed to pay an annual interest rate of 1.3 percent until that date. How much would the bond be worth at that time?
future value = present value x (1 + r)ⁿ
future value = 850 x 1.013⁷ = $930.43
c. In 2025, instead of cashing in the bond for its then current value, you decide to hold the bond until it matures in 2048. What annual rate of return will you earn over the last 23 years?
5,000 = 930.43 x (1 + r)²³
(1 + r)²³ = 5,000 / 930.43 = 5.373859398
²³√(1 + r)²³ = ²³√5.373859398
1 + r = 1.075849638
r = 0.0758
r = 7.58%
Answer:
Site B should be chosen based on the IRR criterion
Explanation:
Please check the attached image for the complete question
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
When comparing projects, the project with the highest IRR should be chosen.
I hope my answer helps you
Answer:
c. credit to Manufacturing Overhead of $92,000
Explanation:
Applied Manufacturing overhead was $92,000
So, The journal entry to record this will be,
Dr. Cr.
Work in Process of $92,000
Manufacturing Overhead $92,000
So, manufacturing overhead account is credited with the value of $92,000.
Answer:
Task a:
The answer is $24,500.
Task b:
The answer is 17%
Explanation:
<h2>Task a:</h2><h3>What is the maximum amount of new capital that can be raised at the LOWEST component cost of EQUITY?</h3><h3>Solution:</h3>
We already know the following:
Projected net income = $21,000
Payout ratio = 30%
Retention ratio = 70%
Debt share = 40%
Equity share = 60%
Maximum amount of capital to be raised at the lowest component cost of equity = Projected net income ×
= $21,000 × 
= $24,500
<h3>Answer:</h3>
The maximum amount of new capital that can be raised at the lowest component of equity is $24,500.
<h2>Task b:</h2><h3>What is the component cost of equity by selling new common stock?</h3><h3>Solution:</h3>
k(e) (component cost of external equity) = [Dividend (D0)(1 + growth) / stock price(1 - flotation cost)] + growth
Formula:
k(e) = 
+ 0.05
Where
Do = $2.00
G = 0.05
P = $21/88
= ($2.00(1 + 0.05) / $21.88(1-.20)) + 0.05
= ($2.10/$21.88(1-.20)) + 0.05
= ($2.10/$21.88(0.80) + 0.05
= 0.17 or 17%
<h3>Answer: </h3>
The component cost of equity by selling new common stock = 17%
<span>Maintaining an active lifestyle requires small but manageable changes in daily life. First of all, awareness is key. How many steps do you normally take? What do your work life and home life look like in terms of movement? Once someone knows what a typical day looks like, they can see where they are weak. Small changes can then be made, such as parking the car further from the store or taking walking breaks when sitting at the office desk for hours each day. Finally, an active lifestyle can be social. Being with friends does not have to revolve around food and drink; rather, friends can be enjoyed while playing leisurely sports (i.e., racquetball, tennis) or walking while conversing.</span>
