Options:
(A) 90 (B) 95 (C) 100 (D) 105 (E) 110
Answer:
(A) 90
Explanation:
par value = $100
coupon rate 6%, semiannual
market price $110
YTM = 4%
similar coupon:
par value = $100
coupon rate 3%, semiannual
market price $???
YTM = 4%
first of all, since the market rate is higher than the coupon rate, the bond will be sold at a discount, therefore, options C, D and E can be eliminated.
that leaves us with options A ($90) and B ($95)
now we can use the YTM formula to find n for both options:
YTM = [coupon + [(face value - market value)/n]} / [(face value + market value)/2]
0.04 = 3 + [(100 - 90)/n]} / [(100 + 90)/2]
0.04 = (3 + 10/n) / 95
3.8 = (3n + 10) / n
3.8n = 3n + 10
0.8n = 10
n = 10/.8 = 12.5 years
0.04 = 3 + [(100 - 95)/n]} / [(100 + 90)/2]
0.04 = (3 + 5/n) / 95
3.8 = (3n + 5) / n
3.8n = 3n + 5
0.8n = 5
n = 5/.8 = 6.25 years
now we must replace n in the YTM formula for the first bond:
bond price $90
YTM = 3 + [(100 - 110)/12.5]} / [(100 + 110)/2]
YTM = 2.2 / 105 = 2.09% X 2 = 4.18% ≈ 4%
bond price $95
YTM = 3 + [(100 - 110)/6.25]} / [(100 + 110)/2]
YTM = 1.4 / 105 = 1.33% X 2 = 2.67% WRONG
"Bic, which is widely known for producing ballpoint pens and related writing products, tried to introduce Bic disposable underwear. The reason this new product failed is likely because of"
Answer: a. ineffective branding.
Explanation:
People were already used to seeing Bic as a pen brand to the extent that in some countries Bic is a generic name for all pens . When they introduced the underwear, people could probably see no need to buying an underwear with the Bic brand because they knew it as a pen brand. They therefore could not generate a strong brand association with the new product.
It is the same logic as when an actor has been on a Sitcom for so long that when they take on other roles, the public judges them a bit too harshly for it because they are not used to them in other roles.
A change from carrying securities at fair value to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires:
A. only a footnote disclosure
B. that the cumulative amount of the change be shown as a line item on the income statement, net of tax.
C. retroactive restatement as if the investor always had used the equity method.
D. that the investor begins accruing income earned by the investee under the equity method at the date of acquisition of the new shares.
Answer:
D
Explanation:
the investor has to being with accruing income earned by the investee
Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. For a recent shipment, the company paid $2700 and received 7500 pieces of candy that are allocated among three groups. Group 1 consists of 2230 pieces that are expected to sell for $0.15 each. Group 2 consists of 4960 pieces that are expected to sell for $0.31 each. Group 3 consists of 310 pieces that are expected to sell for $0.67 each. Using the relative sales value method, what is the cost per item in Group 1
Answer:
group units selling price total
1 2,230 $0.15 $334.50
2 4,960 $0.31 $1,537.60
3 310 $0.67 $207.70
total $2,079.80
Something is not right with the question, since the company paid too much money for the candy that they purchased. In order to allocate costs, we divide the cost by the selling price = $2,700 / $2,079.80 = $1.2982
the unit cost for each candy is:
Group sales price per unit adjusting cost factor cost per unit
1 $0.15 $1.2982 $0.195
2 $0.31 $1.2982 $0.402
3 $0.67 $1.2982 $0.87
Wendy wants to start a business. She knows many unaccredited investors who she knows will help her jumpstart her business. What constraints on investments for new businesses apply here?
Available Options are:
A. Investors' allowable investment depends on the accredited or non-accredited status.
B. Investors may invest a combined $50 million within a 12-month period.
C. Investors may invest no more than $1 million combined for the first year of the business.
Answer:
Option C. Investors may invest no more than $1 million combined for the first year of the business.
Explanation:
The non-accredited investors do not invest more than $1 million for first year. Furthermore, for Investor it also imposes investment in current business conditions which says that Investor can invest in its business with greater of:
1. $2000
2. Or the lesser of (If the net worth of Wendy is less than $100,000)
5% of its total income for the year Net worthThere is also an option which is available if the net worth of Investor exceeds above $100,000 then he can invest up to lesser of 10% of his income or net worth, otherwise he will have to follow the above conditions.
Here, it also has an upper limit, which means that the investor can not invest more than $100,000 in the subsequent year, whatever the level of net worth or income he had for the year.
This means the non-accredited investor can not invest more than $1 million.
A company that wanted to increase its capital through equity financing would most likely get involved in which of the following markets?
A. Stock market
B. Bond market
C. Commodity market
D. Currency exchange market
A company that wanted to increase its capital through equity financing would most likely get involved in the stock market.
What is the stock market?This is the market where shares, treasuries and other forms of security are traded.
The market is a place for a company to invest in if they are trying to increase their equity financing.
Read more on the stock market here: https://brainly.com/question/11967736
The deadweight loss of the profit-maximizing monopoly is identified by what area?
Answer:
area BCA
Explanation:
The deadweight loss of the profit-maximizing monopoly is recognize by area BCA.
Under the deadweight loss of monopoly More is produced under ideal or perfect competition than under monopoly, and deadweight loss is refer to as the amount that buyers value the added or additional output over and above the opportunity costs of producing the additional output.
When a monopoly maximizes profit, the deadweight loss will be larger if demand is in elastic because there will be a reasonable margin of price to marginal cost.
On January 2, 20X5, Park Co. purchased 10 percent of Sky, Inc.'s outstanding common shares for $400,000. Park is the largest single shareholder in Sky, and Park's officers are a majority on Sky's board of directors. As a result, Park is able to exercise significant influence over Sky. Sky reported net income of $500,000 for 20X5, and paid dividends of $150,000. In its December 31, 20X5, balance sheet, what amount should Park report as investment in Sky?
Answer:
The answer is $435,000
Explanation:
Initial Investment-----------------$400,000
Park Co's share of Sky's net income(10% x $500,000) --- $50,000
Park Co's share of Sky's dividend (10% x $150,000) ---------------------- ($15,000)
Reported Investment--------- $435,000
Therefore, Park's balance sheet
will report $435,000 as the investment in Sky's in the year ended December 31, 20X5.
Ariel, a federal government employee, works in acquisition and procurement. Federal policies require that in contracting with suppliers, at least three bids must be received, and the lowest bid that meets specifications will be accepted. In this case, Ariel is dealing with a(n)
Answer:
Programmed decision
Explanation:
The programmed decision is the decision which are taken on a daily basis or we can day to day basis or routine basis. It is likely for solving the structured problems
In the given case, since minimum three bids are received and the bid who has less value meets the specification that results in an acceptance
Therefore this case is of Programmed decision
The entrepreneur's integrity is not relevant to bankers when determining the creditworthiness of a business loan.
A. True
B. False
Answer:
A.True
Explanation:
a person who sets up a business or businesses, taking on financial risks in the hope of profit.
In calculating the creditworthiness of an entrepreneur, integrity is true.
Why is an entrepreneur's integrity not important?Financial establishments try to mitigate the hazard of lending to debtors via means of performing a credit score evaluation on people and companies using a brand new credit score account or loan.
They are called the 5 Cs of credit score because they consist of capacity, capital, conditions, character, and collateral.
So, from the above declaration, it's clear that the option B is true.
Learn more about Entrepreneur, refer to:
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You put up $50 at the beginning of the year for an investment. The value of the investment grows 4% and you earn a dividend of $3.50. Your HPR was ____. A. 4% B. 3.5% C. 7% D. 11%
Answer: 11%
Explanation:
From the question, we are informed that an individual put up $50 at the beginning of the year for an investment and that the value of the investment grows 4% and the person earn a dividend of $3.50.
The HPR will be calculated as :
= 4% + (3.50/50)
= 4% + 0.07
= 0.04 + 0.07
= 0.11
= 11%
If workers leave a country to seek out better opportunities in another country, then this will move the original economy up along a stationary short-run aggregate supply curve. move the original economy down along a stationary short-run aggregate supply curve. shift the short-run aggregate supply curve of the original country to the left. shift the short-run aggregate supply curve of the original country to the right.
Answer: Shift the short-run aggregate supply curve of the original country to the left.
Explanation:
Workers are an input in the production of goods and services. If workers in an economy reduce in number, this would mean that there would be less workers able to produce goods and services in the country. This will invariably lead to a decrease in the amount of goods and services supplied and when there is a decrease in supply, the Short-Run Aggregate Supply curve will shift to the left to reflect this.
A lumber mill is capable of producing 10,000 board feet of lumber per day when run ten hours per day with minimal breaks. Over the past year, forestry legislation has reduced the availability of raw materials, so the mill has produced an average of 4,575 board feet per day. What is the utilization of the plant
Answer:
45.75%
Explanation:
When asking for the utilization of the plant, the question is basically referring to how much of its full potential is the plant currently operating at. Therefore this can be calculated by dividing its current output (4,575) by its maximum output (10,000) like so...
4,575 / 10,000 = 0.4575
Now we multiply that by 100 in order to get the percentage.
0.4575 * 100 = 45.75%
Therefore the current utilization of the plant is 45.75%
Hillary Pillary, age 22, is a full-time student at Diploma Mills College and is awarded a master s degree at the end of the current year. Her tuition, fees, books, and supplies are $10,000 for the year. During the year, she received the following payments:
Scholarship for the year $7,000
Loan from college financial aid office $3,000
Cash prize awarded in beauty contest $2,000
Gift from Aunt Sue $1,000
What amount of these payments is taxable to Hillary for the current year?
A. $1,000
B. $2,000
C. $3,000
D. $5,000
E. $13,000
"When a business establishes a web-site and begins to allow customers to" place orders online without ever coming into their store, they are responding to changes in the:_______
a. social environment
b. economic environment
c. global environment
d. technological environment
Answer: technological environment
Explanation:
Technological environment simply has to do with how science and technology and technological progress has impacted on businesses.
The technological environment is the environment whereby the technological changes affect the marketing efforts of firms. Therefore, a business that establishes a web-site and begins to allow customers to place its orders online without ever coming into their store, is responding to changes in the technological environment.
XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2017 $ 170 $ 3 2018 200 3 2019 150 3 2020 170 3 An investor buys three shares of XYZ at the beginning of 2017, buys another two shares at the beginning of 2018, sells one share at the beginning of 2019, and sells all four remaining shares at the beginning of 2020. a. What are the arithmetic and geometric average time-weighted rates of return for the investor
Answer:
The arithmetic average time-weighted rates of return for the investor is 4.19%
The geometric average time-weighted rates of return for the investor is 2.124%
Explanation:
The arithmetic average return is simple average returns of stocks, calculated as: Arithmetic average return = Sum of returns/ number of years
While geometric average return is calculated as: Geometric average return = number of years√ {(1+r1)*(1+r2)*(1+r3)…} -1
Where r1, r2, r3…are the returns for year 1, 2, 3….
Yearly Return = {(capital gains + dividend)/price}*100
Return from 2017-2018= {(200 - 170) + 3} /170 *100 = 19.41%
Return from 2018-2019 = {(150 - 200) + 3} /200*100 = -23.5%
Return from 2019-2020 = {(170 - 150) + 5} /150 *100 = 16.67%
Hence, Arithmetic mean = (19.41% -23.5% +16.67%)/3 = 12.58%/3 = 4.19%
While Geometric mean = [(1+19.41%)*(1-23.5%) *(1+16.67%)] ^ (1/3) -1
= (1.1941 *0.7650 * 1.1667) ^1/3 – 1 = 0.02124 = 2.124%
The arithmetic average time-weighted rates of return for the investor is 4.19%
The geometric average time-weighted rates of return for the investor is 2.124%
You left work on Thursday evening and forgot to turn in a report that was due that day to your manager. You decide you need to compose an apology letter. What should you do when composing the message
Answer:
Explanation:
In this specific scenario, the message that you are composing to your manager should be sincere, professional, and have a valid reason for why the report was not turned in. Aside from the note, it should also have the finished report attached to it, otherwise the manager will think that the note is an empty excuse which will be meaningless if the report is still overdue.
Agler Corporation currently manufactures a sub assembly for its main product. The costs per unit are as follows:
Direct materials 1
Direct labor 10
Variable overhead 5
Fixed overhead 8
Total $ 24
Funkhouser Company has contacted Agler with an offer to sell it 4,000 of the sub assemblies for $17 each. If Agler buys the sub assemblies, $2 of the fixed overhead per unit will be allocated to other products.
Should Agler make or buy the sub assemblies?
Answer:
they should buy the sub assemblies
Explanation:
The costs per unit are as follows:
Direct materials $1 Direct labor $10 Variable overhead $5 Fixed overhead $8 Total $24offer from an outside vendor = $17 per unit
non-avoidable fixed costs = $8 - $2 = $6
alternative 1 alternative 2 differential
keep producing purchase amount
purchase cost $0 $17 $17
avoidable costs $18 $0 ($18)
total $18 $17 ($1)
if the company decides to purchase the parts from an outside vendor it will save $1 per unit.
If an important component of a firm's production is difficult to specify in a contract and even more difficult to enforce in its production standards, then it probable makes sense to:____________.
a) buy the component in the open market
b) use a simple short term contract
c) take the risk necessary to buy the component
d) vertically integrate upstream to build the component
Answer: d) vertically integrate upstream to build the component
Explanation:
Every good has a supply line from the suppliers who supply the raw materials required to the Producers who convert it to the distributor that brings it to the final user. Vertical Integration refers to when a company such as the producers acquires another company in the supply chain to make things easier for them for instance acquiring the suppliers of a raw material that they need. A practical example would be DeBeers acquiring rights to a diamond mine.
The company in question can engage in Vertical Integration and acquire a supplier that produces the component so that it can be able to specify how it should be made and enforcing production standards.
Between any two countries trading two products, where each country has a comparative advantage in producing one of these two products, we know that the regulated trade is always better than the free trade.
a. True
b. False
Answer:
False.
Explanation:
In Economics, comparative advantage is referred to as the advantage of a country enjoyed by producing one of the two goods. In this case, the other country also entertains the comparative advantage by producing other products. However, it cannot be said that regulated trade is better than free-trade.
A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 4.0% per year over the next 3 years. The portfolio is currently worth $10 million. One year later interest rates are at 5.0%. What is the portfolio value trigger point at this time that would require the manager to immunize the portfolio
Answer:
The portfolio value trigger point at this time that would require the manager to immunize the portfolio would be $12,401,625
Explanation:
In order to calculate the portfolio value trigger point we would have to calculate first the Minimum terminal value as follows:
Minimum terminal value=portfolio value*(1+rate of return)∧3
portfolio value= $10 million
rate of return=4.0%
Hence, Minimum terminal value=$10,000,000*(1.04)∧3
Minimum terminal value=$11,248,640
To calculate the portfolio value trigger point we would have to make the following calculation:
portfolio value trigger point=Minimum terminal value*(1+interest rates)∧2
portfolio value trigger point=$11,248,640*(1.05)∧2
portfolio value trigger point=$12,401,625
The portfolio value trigger point at this time that would require the manager to immunize the portfolio would be $12,401,625
n applying the lower of cost or market rule, the inventory of rehab equipment would be valued at: A) $315. B) $247. C) $150. D) $235.
Answer:
D) $235.
Explanation:
As we know that the inventory should be valued at cost or market value whichever is lower
In the given case
Selling price = $340
Net realizable value is
= Selling price - cost of sell
= $340 - $25
= $315
Replacement cost is $235
Cost = $250
As we can see that the replacement cost is less than the cost so the replacement cost should be valued i.e $235
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 10 years ago for $5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $15.2 million to build, and the site requires $960,000 worth of grading before it is suitable for construction.
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Cash Flow amount $ _____
Answer:
$25,760,000
Explanation:
The net amount of decrease and increase of cash a business or individual owns.
To find the proper cash flow amount used as the initial investment in fixed assets, use the following:
Calculation of initial investment outflow = cost of land + cost of plant + grading cost
= $9,600,000 + 15,200,000, + $960,000
= $25,760,000
Calculation of initial investment outflow = $25,760,000
Therefore the initial investment outflow is $25,760,000
Suppose Cho earns $625 per week working as work as a flight attendant for Flyaway Airlines. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Bob $200 per week to work the cash register. Bob uses $150 to purchase air travel to Hawaii from Flyaway Airlines. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Bob spends $150 to purchase air travel to Hawaii from Flyaway Airlines. Bob earns $200 per week working for Pillmart Pharmacy. Cho earns $625 per week working for Flyaway Airlines. Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. The aspirin Cho receives Cho's labor The $200 per week Bob earns working for Pillmart Pharmacy The $150 Bob spends to purchase air travel to Hawaii from Flyaway Airlines
Answer:
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
Suppose Cho earns $625 per week working as work as a flight attendant for Flyaway Airlines.
Factor marketShe uses $8 to buy a box of aspirin at Pillmart Pharmacy.
Product marketPillmart Pharmacy pays Bob $200 per week to work the cash register.
Factor marketBob uses $150 to purchase air travel to Hawaii from Flyaway Airlines.
Product marketWhich of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
Cho's labor The $150 Bob spends to purchase air travel to Hawaii from Flyaway AirlinesProduct markets basically refer to transactions involving goods and services purchased by consumers. Factor market involve factors of production, e.g. labor and capital.
Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments. In addition, it was discovered that the invoices for several purchases had been paid twice. Indicate whether the procedures listed below for the payment of vendors' invoices would reduce the possibility of losing available cash discounts and of paying an invoice a second time. 1. Each voucher should be approved for payment by a designated official before verifying price, quantities, and terms.
Answer:
1. FALSE
2.TRUE
3. TRUE
4.TRUE
Explanation:
1. It is FALSE which means each voucher should NOT be approved for payment by a designated official before verifying price, quantities, and terms because it would not reduce the chances of losing cash discount .
2. It is TRUE which means each voucher should tend to be filed by the day which will be the last day of the discount period or the due date if the invoice is not subject to a cash discount because if the voucher is filed at last day, there will be chance of losing it.
3. It is TRUE which means each day, the vouchers should be removed from the appropriate section of the file and checks issued by the disbursing official because yhis will also tend to lead to losing the cash discount for payment to the vendor.
4. It is TRUE which means at the time of payment, all vouchers and supporting documents should be stamped or perforated "Pald" because there will presentation of invoice for the second time.
A stock has a required return of 9%, the risk-free rate is 4.5%, and the market risk premium is 3%.
a. What is the stock’s beta?
b. If the market risk premium increased to 5%, what would happen to the stock’s required rate of return?
Assume that the risk-free rate and the beta remain unchanged.
Answer:
a.
The beta of the stock is 1.5
b.
r = 0.12 or 12%
The stock's required rate of return (r) will increase to 12%.
Explanation:
The required rate of return or cost of equity is the minimum return that investors expect/require to invest in a stock of a company. The required rate of return on a company's stock can be calculated using the CAPM equation.
The formula for required rate of return (r) under this model is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the market risk premiuma.
0.09 = 0.045 + Beta * 0.03
0.09 - 0.045 = Beta * 0.03
0.045 / 0.03 = Beta
Beta = 1.5
b.
New rpM = 0.05
r = 0.045 + 1.5 * 0.05
r = 0.12 or 12%
The stock's required rate of return (r) will increase to 12%
Which of the following expands a company's market, allows firms to grow, and makes them less dependent on their country's economy for success?
a. WTO
b. GATT
c. global marketing
d. legal environment
Answer:
global marketing
Explanation:
Global marketing is defined is marketing a country or company's product not only locally but also internationally.
it is the process of producing, placing, and marketing a business' or nations goods or services worldwide.
On September 12, Vander Company sold merchandise in the amount of $6,200 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,200. Jepson uses the periodic inventory system and the gross method of accounting for purchases. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Jepson makes on September 18 is:
Answer:
Accounts Payable $ 6200 Dr
Purchases Discounts $ 124 Cr
Cash $ 6076 Cr
Explanation:
Periodic inventory system is one in which the entries are passed periodically after a specific length of time.
In the Books of Jepson
Periodic Inventory
Gross Method
Journal Entry
Particulars Debit Credit
Accounts Payable $ 6200 Dr
Purchases Discounts $ 124 Cr
Cash $ 6076 Cr
Discount within the first ten days will be of 2%
$ 6200 *2%= $124
Remaining amount 6200-124 = 6076 will be paid in cash.
IBM expects to pay a dividend of $2 next year and expects future dividends and earnings to grow at 9% a year in perpetuity. The price of IBM is $100 per share. What is IBM's cost of equity capital
Answer:
Cost of equity = 11%
Explanation:
Cost of equity can be ascertained using the dividend valuation model. The model states that the price of a stock is the present value of future dividends discounted at the required rate of return.
Cost of equity (Ke) =( Do( 1+g)/P ) + g
g- growth rate in dividend, P- price of the stock
g - 9%, P - 100, D(1+g)= 2
D(1+g) represents the dividend payable in year 1 and is already given as 2
Cost of equity = (2/100 + 0.09)× 100
Cost of equity = 11%
_____ is best described as a firm's ownership of its production of needed inputs or of the channels by which it distributes its outputs.
Answer:
Vertical integration
Explanation:
Vertical integration is a technique in which a corporation owns or manages the ownership or supply chain of its suppliers , distributors, or retail locations.
It is required when the firms want to expand their business by purchasing another company that operates over and above supply chain management
Therefore according to the given situation the correct answer is Vertical integration.
Splish Brothers Inc. issues $4.8 million, 5-year, 7% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium. Prepare the journal entry to record interest expense and bond premium amortization on December 31, 2017, assuming no previous accrual of interest.
Answer and Explanation:
The Journal entries are shown below:-
Interest expense Dr, $316,800
Premium on bonds payable Dr, $19,200 ($96,000 ÷ 5)
To Interest payable $336,000 ($4,800,000 × 7%)
(Being interest expense and bond premium amortization is recorded)
Here we debited the interest expenses and premium on bonds as it increased the expenses and we credited the interest payable as it also increased the liabilities