Presented below is information related to Tamarisk Enterprises. Jan. 31 Feb. 28 Mar. 31 Apr. 30 Inventory at cost $17,400 $17,51
1 answer:
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Answer:
a. 4.89%
b. 5.23%
Explanation:
We use the rate formula which is shown in the attached spreadsheet
Given that,
Present value = $2,000 × 108.96% = $2,179.20
Future value or Face value = $2,000
PMT = $2,000 × 5.7% ÷ 2 = $57
NPER = 16 years × 2 = 32 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
a. The yield to maturity of the bond is 4.89%
b. The current yield would be
= 57 × 2 ÷ $2,179.20
= 5.23%
Answer:
The firm needs to sale for 5,708 units to break even finnancially.
Explanation:
<u>We convert the fixed asset investment into an annuity:</u>
PV 148,000
time 3
rate 0.15
C $ 64,820.590
Now, the amount above the annual fixed cost of 39,800 will be considered a gain for tax purposes, we need to increase it by 21% o give the sales before taxes.
before taxes target contribution:
64,820.59 / 1.20 = 54,017.16
We also have a depreciation component which generates a tax shield:
(148,000 / 3) x 21% = (10,360)
<em>Now, we solve for the break even point of the sum of this components:</em>
39,800 + 54,017.16 - 10,360= 83,457.16 dollars
Each units generates 14.62 dollars we divide and obtain the sales per year in untis:
83,457.16 / 14.62 = 5.708,42