Successful people: Stay ________ and Hungry, and Give to Others.

A 10-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.5% (2.75% of face value every six months). The repor

Sveta_85 [38]

Answer:

YTM 5.2% present value: $1,023.1644

YTM 1% present value: $1,427.2169

YTM 8% present value: $830.1209

YTM 8% present value: $515.7617

Explanation:

YTM we will calculate the present value of the coupon payment

andthe maturity at each YTM rate given:

The coupon payment present value will be the present value of an ordinary annuity

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon payment 28 (1,000 x 2.75%)

time 20 (10 years x 2 payment per year)

rate 0.026 (YTM over 2 as the payment are semiannually)

$27.5 \times \frac{1-(1+0.026)^{-20} }{0.026} = PV\\$

PV $424.6800

The present value of the maturity will be the present value of a lump sum:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 20.00

rate 0.026

$\frac{1000}{(1 + 0.026)^{20} } = PV$

PV 598.48

PV c $424.6800

PV m $598.4843

Total $1,023.1644

Now, we will calculate changin the YTM the concept and formulas are the same, just the rate is diffrent:

If YTM = 1%

$27.5 \times \frac{1-(1+0.005)^{-20} }{0.005} = PV\\$

$\frac{1000}{(1 + 0.005)^{20} } = PV$

PV c $522.1540

PV m $905.0629

Total $1,427.2169

If YTM = 8%

$27.5 \times \frac{1-(1+0.04)^{-20} }{0.04} = PV\\$

$\frac{1000}{(1 + 0.04)^{20} } = PV$

PV c $373.7340

PV m $456.3869

Total $830.1209

If YTM = 15%

$27.5 \times \frac{1-(1+0.075)^{-20} }{0.075} = PV\\$

$\frac{1000}{(1 + 0.075)^{20} } = PV$

PV c $280.3485

PV m $235.4131

Total $515.7617

3 0

2 years ago

On January 1, 20x1, the ABC Corporation purchased 80% of the XYZ Company's voting stock for $3,000,000. The FMV of all of XYZ's

frutty [35]

Answer: $440000

Explanation:

Fair market value = $4025000

Book value of asset = $2,850,000

Land value = $625,000

The value of the goodwill will be

(Fair market value - book of asset - land value) × 80%

= ($4,025,000 - $2,850,000 - $625,000) × 80%

= 550000 × 80%

= 550000 × 0.8

= $440,000

8 0

2 years ago

Chester's Elite product Cid has an awareness of 72%. Chester's Cid product manager for the Elite segment is determined to have m

lapo4ka [179]

Answer:

Minimum of 2M USD is required to be invested.

Explanation:

Chester's Elite product Cid Awareness = 72%

First 1M USD generates = 22% awareness

Second 2M USD generates = 23% awareness

Third 3M USD generates = 5%

1/3 of Cid's existing awareness is lost every year

if Cid Awareness = 72% this year .

Next Year it will be = 72-24 = 48%

Year after next year = 48-16 = 32% .

So,

we know that Agape's Awareness remains same next year = 77% .

So, Chester's Elite Product Manager should spend 2M USD in promotion in order to get ahead from Andrew's Agape Product.

Because by spending 2M USD Cid Awareness will become = 117% = 72 + 22+ 23.

So, after a year if it lost 1/3 then = 1/3 of 117 = 39

So, final awareness of Cid will be = 117-39 = 78%

And Andrew's Awareness will be = 77%

Hence, minimum of 2M USD is required to be invested.

8 0

2 years ago

PB1.

maria [59]

Answer:

Explanation:

1. prime costs: direct materials+direct labour

= $22,000+$35,000

= $57,000

2. Conversion Costs= Direct labour + Manufacturing Overheads

= $35,000+ $17,500

= $52,500

3. Product Costs = direct material+ direct labour+ manufacturing overheads

= $22,000 + $ 35,000 + $17,500

= $74,500

4. Period Costs = Selling expenses+ administrative expenses

= $17,600 + $13, 400

= $31,000

If 13,750 equivalent units are produced, what is the equivalent material cost per unit = direct materials costs / unit produced

= $22,000/13,750

= $1.6 per unit

If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit = total conversion costs/unit produced

= $52,500/17,500

=$3 per unit

3 0

2 years ago

Tyare Corporation had the following inventory balances at the beginning and end of May:

Oksana_A [137]

Answer:

a. $5,460

Explanation:

The computation of the ending amount of direct labor cost is shown below:

First we have to compute the direct labor hours which is

= Ending work in process - direct materials cost

= $17,578 - $7,750

= $9,828

The total per direct labor hours is

= $12 + $15

= $27

So, the direct labor hours would be

= $9,828 ÷ $27

= 364 hours

So, the ending direct labor cost is

= 364 hours × $15 per hour

= $5,460

6 0

2 years ago