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1 year ago

when investors doubt the creditworthiness of a borrower, what should happen to the price and yield of a bond

Business

1 answer:

denpristay [2]1 year ago

7 0

Answer:

Prices go down, yield go up

Explanation:

As we know that there is an opposite relationship between the price of the bond and the yield that means if the creditworthiness comes in a doubt so it reduced the price of the bond and at the same time it increased the yield

So as per the given situation as the investor doubt the borrower creditworthiness so the price would fall and yield would go up

hence, the same is to be considered

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Carl Carpenter buys a drill press. The price, including tax, is $725.00. He finances the drill press over 24 months after making

Zarrin [17]

First calculate the amount financed
Amount financed=725−50=675

The formula is
I=(2yc)/(m (n+1))
Solve for c to get
C=(I×m×(n+1))/2y
C=(0.14×675×(24+1))÷(2×12)=98.44

Total of payments=675+98.44=773.44

Monthly payment is
773.44÷24=32.23

Hope it helps!

8 0

1 year ago

Read 2 more answers

Differential Analysis for a Lease or Buy Decision Sloan Corporation is considering new equipment. The equipment can be purchased

Arlecino [84]

Answer:

Alternative 2 (purchase equipment) should be selected because it reduces costs by $10,400.

Explanation:

Alternative 1 (lease):

less price per year $30,000 x 5 years = $150,000

Alternative 2 (purchase):

initial investment = $125,500 + $1,600 = $127,100

maintenance cost per year = $2,500 x 5 years = $12,500

<h2> Differential Analysis</h2>

alternative 1 alternative 2 differential

lease purchase effect

Revenues $0 $0 $0

Costs:

Purchase price $0 -$125,500 -$125,000

Freight and installation $0 -$1,600 -$1,600

Repair and maintenance $0 -$12,500 -$12,500

(5 years)

Lease -$150,000 $0 $150,000

(5 years)

Income / loss -$150,000 -$139,600 <u>$10,400</u>

Alternative 2 (purchase equipment) should be selected because it reduces costs by $10,400.

4 0

2 years ago

Grey has two children, Ham (the eldest) and Ivy, both of whom predecease Grey-Ham is survived by a daughter, Jess, and Ivy by tw

svetlana [45]

Answer:

Jess receives one-half of the estate, and Kato and Lars each receive one-fourth

Explanation:

The question is complete but phrased incorrectly as the options are not separated.

8 0

1 year ago

Uncollectible Accounts, Using Direct Write-Off Method Illustrate the effects on the accounts and financial statements of the fol

goldfiish [28.3K]

Answer and Explanation:

The effect of the given transaction is shown in the attachment below. Please find the attachment

As we know that

Accounting equation is

Total assets = Total liabilities + total stockholder equity

So,

1. In the first transaction there is an increased in assets by $29,000 and decreased the assets by $29,000 plus the same is to be recorded in the operating section of the cash flow statement

2. In the second transaction, there is decreased in asset for $49,020 also the retained earning is also decreased by same amount plus there is a bad debt expense also

6 0

1 year ago

Jill took $50,000 that she had in savings and started her own business. If left in investments she would have earned $5,000 this

vova2212 [387]

Answer: Economic cost = $175,000

Accounting cost = $100,000

Explanation: The difference between economic cost and accounting coast is economic cost takes into consideration the next best alternative foregone, that is, opportunity cost whereas accounting cost only sums cost incurred. In the given case the interest on savings and salary of job is the opportunity cost of Jill.

Therefore,

Economic cost = $5000 + $70,000 + $80,000 + $40,000 - $20,000=$175,000

Accounting cost = $80,000 + $20,000 = $100,000

7 0

2 years ago