bichon company purchased equipment for $6,720 on december 1. it is estimated that annual depreciation on the equipment will be $1,680. if financial statements are to be prepared on december 31, the company should make the following adjusting entry:

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Answer 1

The company should make the following adjusting entry Debit Depreciation Expense, $140; Credit Accumulated Depreciation, $140.

A corporation, often known as co., is a legal entity that stands for a group of individuals with a certain goal who are either natural, legal, or a combination of the two. Members of the company work together for a shared cause in order to accomplish clearly stated objectives. Companies come in a variety of shapes.

So that the business itself has limited responsibility as members fulfil or fail to fulfil their obligations in accordance with the publicly stated incorporation, or published policy, a company may be established as a legal entity. It may be necessary to liquidate a company after it closed in order to discharge any outstanding debts. Corporate groupings are the ensuing entities that develop when corporations join forces and register themselves as new businesses.

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If carbon dioxide goes up to roughly 400 parts per million, that is warm enough to melt chunks of land ice. How could this directly affect human health?.

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Answer:

During 9th of May, 2013, CO 2 levels in the air officially reached the level of 400 parts per million (ppmm). This is the first time in human history that this milestone has been passed.

Explanation:

does the use of english measurement units put u.s. companies at a disadvantage when competing on international contracts?

Answers

Converting between different units is the English system of measurement's main drawback. Going from feet to kilometers, pounds to ounces or gallons to pints is not simple. Remembering that 640 acres make up one square mile is a typical illustration.

What is English measurement?

English units are the measurement systems that were in use in England up until 1826 and were a result of the fusion of the Roman and Anglo-Saxon systems. English units have been subject to a variety of standards over time, in various locations, and for various purposes. The inch, foot, yard, and mile are the fundamental units of length and distance measurement in the English system. The rod, furlong, and chain are additional length units. definition of survey foot.

Areas are commonly expressed in square feet or cubic yards in the English system. Feet, inches, and pounds are used in the English measurement system to measure objects. The majority of the units of the metric system are meters and grams, along with prefixes like kilos, milli, and centi. The English method of measurement is intended to make measuring length more challenging.

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You would want your financial planner to provide you with an investment policy statement that details your investment philosophy, your financial situation, and the risks you are willing to take, as well as what the advisor will do for you. TRUE
FALSE

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The statement 'You would want your financial planner to provide you with an investment policy statement that details your investment philosophy, your financial situation, and the risks you are willing to take, as well as what the advisor will do for you' is true.

A financial planner is a person that analyzes your investment policies and guides your finances in such a way that you make valuable choices.

A financial planner will take an insight into your financial situation and also analyze the investment risks that a person wants to take are valuable or not.

The financial planner also guides about the financial services that he will be providing and how the advisor will help in managing the finances of the client.

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george purchased a life annuity for $2,200 that will provide him $55 monthly payments for as long as he lives. based on irs tables, george's life expectancy is 100 months. how much of the first $55 payment will george include in his gross income?

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Of the first $55 payment George will include in his gross income#35.

Amount to be included in gross income from the first $55 payment = $55 - ($2,000 / 100)

= $55 - $20

= $35

What is Gross income?

Gross income is the total of all incomes, salaries, profits, interest payments, rents, and other kinds of income for families and people before any deductions or taxes. It differs from net income, which is calculated as gross income less any applicable taxes and other deductions.

How can I determine my gross income?

As an alternative, you can figure out your gross income by multiplying either your monthly take-home pay before taxes or the number of hours you'll work in a month by your hourly wage rate.

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if the marginal propensity to consume is 0.70 , what is the multiplier, assuming there are no taxes or imports? round to the tenths place.

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If there are no taxes or imports and the marginal propensity to consume is 0.70, the multiplier is 3.33.

To calculate how much spending rises for every dollar of increased income, MPC monitors this connection. MPC is significant since it fluctuates with income and is lowest for those with higher incomes.

MPC is significant because it offers insightful information about how income affects consumer behavior. It aids economists and other specialists in learning about the relationship between an individual's income and their spending, which may affect economic policy.

The spending multiplier = 1 / (1 - MPC)

= 1 / (1 - 0.70)

= 3.33

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If The Consumption Of A Product Creates External Benefits It Should Be Subsidized In Order To Encourage Its Purchase. A. True B. False

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The sentence 'if the consumption of a product creates external benefits it should be subsidized in order to encourage its purchase' is true.

Such products that prove to be beneficial to humans should be encouraged to be subsidized for sales.

Products whose consumptions provide external benefits should be subsidized so that more people purchase the product. In today's market, it is important to promote products that are valuable in order to keep up with the current market trend.

Hence, if there is a product that causes any kind of external benefit, it should be subsidized so that its market value can be enhanced.

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true or false: in early classical growth models if a society wanted to grow its economy it had to save.

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True: in early classical growth models if a society wanted to grow its economy it had to save.

Several economists who wrote about the causes and processes of economic growth in their age, around the 18th and 19th centuries, are included in the modern category of economic theory known as "classical growth theory." Adam Smith and David Ricardo are two significant theorists who are connected to these concepts. In Great Britain, the classical growth theory emerged along with the Industrial Revolution. These classical economists placed a strong emphasis on the analysis of the economic growth process.

The goal of classical economists was to explain the main factors influencing economic growth as well as the mechanisms that underlie it. The main causes behind economic expansion were thought to be the division of labor, trade benefits, and capital accumulation.

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On April 1 of the current year, Troubled Company factored receivables with a carrying value of $85,000 for $60,000 in cash from Scrooge Lenders. The transfer was made without recourse. The arrangement also includes a factoring fee equal to 4% of the total factored amount. On April 1, Troubled would:
Multiple Choice
Credit Deferred Interest Expense for $25,000.
Credit Factored Accounts Receivable for $85,000.
Debit Discount on Liability for $25,000.
Debit Loss on Sale of Receivables for $25,000.

Answers

On April 1, Troubled would debit loss on the sale of accounts receivables for $25,000.

What are accounts receivable?

The term "accounts receivable" refers to a company's legally enforceable claims for payment for goods delivered or services rendered that customers have requested but have not yet paid for. Typically, they take the form of invoices that are generated by businesses and sent to customers for payment within predetermined time frames. An asset on a balance sheet is represented by accounts receivable. It is one of several accounting transactions that deal with charging a customer for the goods and services they have requested. These can be contrasted from notes receivable, which are debts established through formal legal documents known as promissory notes.

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adaptive expectations will speed up the adjustment process that takes place when an economy operates above or below full employment. group of answer choices true false

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This statement is false.

An conjectured process by which people construct their expectations about what will happen in the future based on what has already occurred is known as adaptive expectations in the field of economics.

It is a theoretical idea that has to do with creating expectancies for the future based on experiences and things that have happened recently.

People will anticipate higher inflation in the current year, for instance, if it was higher in the recent past.

Adaptive expectations actually make things go more slowly. Looking backward and analyzing previous economic behavior is necessary when thinking adaptively about the economy. The process of coming to conclusions and adjusting will move slowly.

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the cape cod cotton candy company had the following information available regardinglast year's operations:sales (100,000 units) $200,000variable costs 100,000contribution margin 100,000fixed costs 50,000net income 50,000if sales were to increase by 200 units, what would be the effect on net income?

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The cape cod cotton candy company had the following information available. The effect on net income will be $200.

Net income refers to the quantum an individual or business makes after abating costs, allowances and levies. In commerce, net income is what the business has left over after all charges, including payment and stipend, cost of goods or raw material and levies.

Calculating the problem:

Selling cost per unit = $ 200,000 ÷ $ 100,000

                                    = 2

Variable cost per unit = $ 100,000 ÷ 100,000

                                  = 1

sales = 100,200× 2 = 200 ,400

Variable cost = 100,200 × 1

                        = 100,200

Contribution margin = 100,200

Fixed cost = 50,000

Net income = 50,200

So , net increase is $ 200.

Generally, net income is synonymous with profit since it represents the final measure of profitability for a company. Net income is also appertained to as net profit since it represents the net quantum of profit remaining after all charges and costs are abated from profit.

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the chief audit executive set up a computerized spreadsheet to facilitate the risk assessment process involving a number of different divisions in the organization. the spreadsheet included the following factors: pressure on divisional management to meet profit goals complexity of operations competence of divisional personnel the monetary amount of subjectively influenced accounts in the division, such as accounts in which management’s judgment can affect the expense, e.g., postretirement benefits the cae used a group meeting of internal audit managers to reach a consensus on the competence of divisional personnel. other factors were assessed as high, medium, or low by either the cae or an internal audit manager who had performed an engagement at the division. the cae assigned a weight ranging from 0.5 to 1.0 to each factor and then computed a composite risk score. which statement is true? the risk analysis is not appropriate because it mixes both quantitative and qualitative factors, thereby making expected value calculations impossible. the weighting is subjective and should have been determined through a process such as multiple-regression analysis. assessing factors at discrete levels such as high, medium, and low is inappropriate for the risk assessment process because the ratings are not quantifiable. using a subjective group consensus to assess personnel competence is appropriate.

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Assessing factors at discrete levels such as high, medium, and low is inappropriate for the risk assessment process because the ratings are not quantifiable.

The definition of quantifiable is something that can be measured or counted. An example of quantifiability is the number of people in a room. your dictionary. Quantifiable.

Quantitative skills are skills that involve the use or manipulation of numbers. It is the ability to reason with numbers. For example, statistics, economics, and algebra are fields where quantitative skills are essential, but quantitative tools appear in all fields.

When you quantify something, make it a number. Answer 5 when asked to quantify the fingers on your hand. If you like mathematics, this word is for you: Quantification is counting or representing something with numbers.

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The sales philosophy and process that emphasizes a commitment to maintaining customer relationships over the long term and investing in opportunities that are mutually beneficial to all parties is known as ________ selling.

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The selling philosophy outlines how a company thinks about the income process, assessing purchaser needs, diagnosing problems, qualifying opportunities, and producing revenue.

What promoting focuses on building lengthy time period relationships with customers?

Relationship promoting is a approach in which a sales rep prioritizes their connection with the patron over all different components of the sale. They enhance have confidence — commonly by means of including fee and spending a lot of time with potentialities — earlier than attempting to close.

What is the important philosophy of marketing?

Marketing is referred to as the procedure of creating, communicating and handing over merchandise for the clients in order to satisfy their desires and wants. The reason of a advertising and marketing philosophy is to pick out these wants and fulfil them.

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jake has saved $30 per week to buy a new blu-ray player. he compares two different models: a panaview that is priced at $130 and a zony model that is priced at $140. jake decides to purchase the zony blu-ray player for $140. identify what role money plays in each of the following parts of the story. hint: select each role only once. role of money medium of exchange unit of account store of value jake saved $30 per week. jake pays $140 for the blu-ray player. jake can easily determine that the panaview model has a lower price than the zony model. grade it now save

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Jake has saved $30 per week to buy a new Blu-ray player. Jake can easily determine that the pageview model has a lower price than the zony model. grade it now save

a.  unit of account

b.  store of value

c.  medium of exchange

A stand-by myself unit that plays Blu-ray player and DVD film discs. It also plays song from CDs, and more recent models have built-in Netflix aid, as well as get right of entry to to different streaming services. A "Blu-ray player" is an input supply for a television or domestic theater, while a "Blu-ray drive" is a peripheral tool for a pc.

A DVD is a popular definition device. You won't get excessive-definition movie viewing to your DVD, simply 480 SD.

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A company that wants to use scenes from the pixar movie soul in its advertising campaign would have to have a __________ with the pixar company to use the movie.

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Answer:

Explanation:

Presto is the proprietary software developed and used in-house by Pixar Animation Studios in the animation of its features and short films.

given that a​ firm's return on equity is 15 percent and management plans to retain 41 percent of earnings for investment​ purposes, what will be the​ firm's growth​ rate?

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A​ firm's return on equity is 15 percent and management plans to retain 41 percent of earnings for investment​ purposes, so the​ firm's growth​ rate is 27%.

A firm's growth​ rate refers to the extent to that a selected variable modified over a delegated amount of your time. the expansion rate might mirror however quickly or what quantity one thing modified. for instance, a rate might represent what quantity revenue modified from month to month.

A management plan is a formal designing tool that aims to style the longer term operations of the ability. it's a writing that outlines: the aims and objectives of the ability — what are we have a tendency to attempting to succeed? the methods accustomed meet the objectives — however can we have a tendency to achieve it?

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When using the indirect method, adding a decrease in prepaid insurance to net income eliminates the effect of recording insurance expense that ______.

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When using indirect method, adding decrease in prepaid insurance to net income eliminates effect of recording insurance expense that has not been paid in cash.

What is net income?

In the world of finance and business, net income (also referred to as total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) refers to an entity's income less costs of goods sold, expenses, depreciation and amortization, interest payments, and taxes for a specific accounting period. It is calculated as the total of the period's revenues, profits, and losses less the sum of the expenses, gains, and losses. It has also been referred to as the net increase in equity held by shareholders as a result of business operations. It differs from gross income because gross income only deducts the cost of the goods sold from revenue. Net income for families and individuals is their (gross) income less any applicable taxes and other deductions.

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which type of control advocates that if structure, leadership, technology, human resources, or operations inhibit the attainment of the organization’s goals, that aspect of the organization should be changed?

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Strategic control is the  type of control advocates that if structure, leadership, technology, human resources, or operations inhibit the attainment of the organization’s goals, that aspect of the organization should be changed.

What is meant by strategic control?

Strategic control is a specialized form of management control that is used by businesses to oversee the creation and implementation of their strategic plans. It differs from other management control methods (particularly operational control) in that it must deal with ambiguity and uncertainty.

Strategic control is the process of determining an organization's path based on its implicit or explicit goals, objectives, strategies, and ability to perform in the face of shifting external conditions and rivalry.

Reevaluating a strategy in response to a sudden, unanticipated incident may be a part of strategic control. For instance, a business must promptly reevaluate its strategy if its flagship product is quickly becoming obsolete. Putting a plan into action frequently entails a set of actions

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Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows. Capital Requirements ($) ) Alternative Number Alternative Net Present Value ($) Year 1 Year 2 Year 3 1 Limited warehouse expansion 4,500 3,000 1,000 4,000 2 Extensive warehouse expansion 5,500 2,500 3,500 3,500 3 Test market new product 11,000 6,000 4,000 5,000 4 Advertising campaign 4,500 2,000 1,500 1,800 5 Basic research 7,500 5,000 1,000 4,000 6 Purchase new equipment 2,500 1,000 500 900 Capital funds available 10,500 7,000 8,750 (a) Develop an integer programming model for maximizing the net present value in $). Let x = 1 if investment alternative i is selected for 1 = 1, 2, 3, 4, 5, 6. 16.) O otherwise Max 4500x, + 5500x7 + 11000x.: + 4500x4 + 7500x3 + 2500x6 s.t. Year 1 3000x4 + 2500x2 + 6000x3 +2000x4 + 5000x5 + 1000x6 < 10500 Year 2 1000x, + 3500x, + 4000x3 + 1500x4 + 1000x5 + 500x6 S 7000 Year 3 1000x, + 3500x, +5000x3 + 1800x4 + 1000x + 900x48750 According to this model, what is the maximum net present value in $)? $ 24300 X (b) Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). In addition to the constraints from part (a), what additional constraint should be added to the integer programming model? *1 + x2 <1 According to this model, what is the maximum net present value in $)? $ 24300 (b) Assume that only one of the warehouse expansion projects can be implemented. Modify your model from part (a). In addition to the constraints from part (a), what additional constraint should be added to the integer programming model? x1 + x2 <1 According to this model, what is the maximum net present value (in $)? $ 17000 (C) Suppose that if test marketing of the new product is carried out, the advertising campaign also must be conducted. Modify your formulation from part (b) to reflect this new situation. In addition to the constraints from part (a) and part (b), what additional constraint should be added to the integer programming model? *4 -*3=0 According to this model, what is the maximum net present value (in $)? $ 24000

Answers

The net present value will be 17,500,

There is only one project for warehouse expansion that can be carried out, and if test marketing of the new product is done, an advertising campaign must also be done and vice versa. Assume as well that basic research or a significant warehouse expansion is required before the acquisition of new equipment can be made.

Create the corresponding model to maximize net present value while adhering to the aforementioned constraints Yi (1 if investment alternative is selected, o otherwise).

I = 1, 2, 3, 4, 5, 6

Max Z = $4,000y1 + 6,000y2 + 10,500y3 + 4,000y4 + 8,000y5 + 3,000y6.

So, NPV = 17,500.

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sing corporation began the year with a $190,000 balance in its equipment account. during the year, equipment with an original cost of $25,000 was sold. the ending balance in the equipment account was $210,000. which of the following statements is true?

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Sng corporation began the year with a (Beginning balance) $190,000 - (Equipment sold) $25,000= $165,000. (Ending balance) $210,000 - $165,000 = $45,000 Equipment purchased  statements is true.

A corporation is an employer—typically a group of people or a employer—legal via the nation to act as a single entity and recognized as such in regulation for positive functions. Early incorporated entities had been hooked up by means of constitution. most jurisdictions now permit the introduction of new agencies through registration.

An organisation is a criminal entity that is separate and wonderful from its owners. beneath the regulation, groups own among the same rights and obligations as people. they could enter contracts, loan and borrow cash, sue and be sued, lease employees, own belongings, and pay taxes.

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a process that has natural causes of variation, and considered in good control, but produces some product that does not meet upper and lower specification limits is referred to as

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A process that has natural causes of variation, and considered in good control, but produces some product that does not meet upper and lower specification limits is referred to as out of control.

Where do the limits of specifications come from?

Limits on specifications are set by your customer. They are restrictions on a product's attributes that specify the conditions under which it operates and does not operate. Specification limitations specify the permitted departure from a desired or ideal value.

Customer specification limitations, which are frequently based on input from the Voice of the Customer, are the goals that customers or market performance have set for a product or a process. In other words, it is the outcome that the metric that we measure is supposed to produce.

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alex and marilyn started ono yo, an organic and fresh fruit frozen yogurt truck. as the demand for organic and healthier desserts rose, demand for ono yo's products grew. because of the growth in demand for ono yo's product, alex's and marilyn's

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Alex and Marilyn started Ono yo, an organic and fresh fruit frozen yoghurt truck, and the demand for workers increased.

Demand is the intention of a consumer to buy a particular good or service. Market demand is the demand for a particular good on the market. Aggregate demand is the term used to describe the entire economy's demand for goods and services.

The demand planning process forecasts product or service demand to ensure that customers are satisfied. The goal of demand planning is to strike a balance — to have enough inventory to meet orders without having a surplus.

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13. beaksley, inc., is a very cyclical type of business, which is reflected in its dividend policy. the firm pays a $2:00 a share dividend every other year. the last dividend was paid last year. five years from now, the company is repurchasing all the outstanding shares at a price of $50 a share. at an 8% rate of return, what is this stock worth today?

Answers

All future earnings will be converted into today's dollar to estimate an investment's present value.However, the estimated present value will be affected if the selected discount rate changes.

D1-D5 equals $2; the purchase price equals $50; I equals 8%.

What is PV, or present value?

The current value of a future sum of money or stream of cash flows at a certain rate of return is known as present value (PV).The discount rate is how future cash flows are discounted, and the higher the discount rate, the lower their present value is.

Example of how to calculate present value

T is equal to four years.n = 1 due to the annual compounding of the amount.The interest rate is r = 7% = 0.07.PV = 6500 / (1 + 0.07/1)1(4) = 6500 / (1.07)4 = 5,000 (The number given has been rounded to the nearest thousand).

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the common stock of sterling co. has an expected return of 14.7 percent and a beta of 1.3. the expected return on the market is 12.0 percent. what is the risk-free rate?

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The risk-free rate is 3%. A market risk premium in finance and economic is used to measure how much the level of risk.

A risk premium means a measure of excess return that is used by an individual to compensate being subjected to an improved degree of risk. A risk premium is the common definition being the expected risky return less the risk-free return.

To find the amount of risk free rate, we can calculate it use this formula:

ER = rf + β (rm - rf)

Where,

ER = Expected Return = 14.7% = 0.147

rf = Risk free rate

β = beta = 1.3

rm = Return market = 12% = 0.12

Hence,

0.147 = rf + 1.3 (0.12 - rf)

0.147 = rf + 0.156 - 1.3rf

0.147 - 0.156 = -0.3 rf

-0.009 = -0.3 rf

rf = 0.03

Thus, the risk-free rate is 3%.

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You have a position with respect to an asset that will lose money as the price of that asset increases. You have a __________ position.
Group of answer choices
short
long
in-the-money
out-of-the-money
at-the-money

Answers

an asset that will experience a loss as its value rises. Your have a long position .

What exactly does it mean to be in a long position?

A long position in a financial instrument in the context of finance denotes ownership of the financial instrument by the position holder. The position holder anticipates that the value of the financial instrument will rise. A bullish stance is what this is.

For investors that go long, the primary risk is a decline in the value of the asset they possess, which could result in a loss. The main danger to people who are shorting stocks is an increase in the value of the borrowed shares.

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a manufacturer is contemplating a switch from buying to producing a certain item. setup cost would be the same as ordering cost. the production rate would be about double the usage rate. compared to the eoq, the maximum inventory would be approximately:

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Compared to the EOQ, the maximum inventory would be approx 30% lower.

To calculate most stock levels, use the subsequent formula maximum stock tiers = reorder point + reorder amount minimum consumption × minimum lead time. minimum and maximum inventory ranges are inventory limits for the customer region product that the patron has the same opinion upon as the dealer.

The projected inventory ought to now not to fall beneath the minimal inventory stage. For extra facts, see Calculation of Projected stock. The inventory degree is one of the methods wherein companies manage the number of products in their warehouses. The venture of any organization is to satisfy the call for its merchandise.

Therefore, corporations should do the entirety viable to keep away from walking out of stock and at the equal time save you overstocking most quantities is a threshold fee that the stock ought to no longer exceed. The most quantity is required, for. instance, for replenishment control.

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what is the accounting rate of return for a project that is estimated to yield total income of $375,000 over three years and costs $861,000?

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111000$ will be the accounting rate of return for a project that is estimated to yield a total income of $375,000 over three years and costs $861,000.

The net profit or loss of an investment over a period of time, is expressed as a percentage of the original cost of the investment.When calculating returns, we determine the percentage change from the beginning of the period to the end.Return on Investment (RoR) is used to measure the profit or loss of an investment over time.The metric can be used for a wide variety of assets, from stocks to bonds to real estate to art.The effect of inflation is not included in the simple rate of return calculation but is included in the real rate of return calculation. Internal rate of return (IRR) takes into account the time value of money.over time aims to account for the time value of money (TVM) that CAGR ignores. Discounted cash flows take the return on investment and discount each cash flow based on a discount rate. The discount rate represents the lowest rate of return acceptable to investors or the assumed rate of inflation. In addition to investors, companies use discounted cash flows to assess the profitability of their investments.

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What would help a company reduce the risk of developing products for which there is little or no demand?.

Answers

Limiting budget allocated to R&D department would help company to reduce risk of developing products for which there is little or no demand.

What is R&D?

Research and development (R&D), also referred to as research and technical development (RTD) in Europe, is a set of creative activities carried out by businesses or governments to create new services or products or to enhance those already on the market. The initial stage in the development of a potential new service or production method is research and development. R&D activities vary from institution to institution, with the two main models of an R&D department being either staffed by engineers and charged with directly developing new products, or staffed by industrial scientists and charged with conducting applied research in scientific or technological fields, which may aid in the development of future products. However, R&D is essential for capturing higher market shares through the commercialization of innovative products.

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professional management is less of a concern with exchange-traded funds because exchange-traded funds invest in: (fill in the blank)

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professional management is less of a concern with exchange-traded funds because exchange-traded funds invest in stocks, bonds, or other assets.

Professional management of exchange-traded funds?

Exchange-traded funds (ETFs) are investment firms that are registered with the SEC to provide investors with a mechanism to pool their cash in a fund that invests in stocks, bonds, or other assets. Investors are given a stake in the fund as payment. Investment advisers that are registered with the SEC professionally handle the majority of ETFs. An industry with both strong performers and recent entrants with growth potential is the focus of this strategy, which seeks to provide diversified exposure to it. Stock ETFs have reduced costs and do not actually own any securities, in contrast to stock mutual funds, which do.

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suppose that a firm uses only two inputs in its production process. the ratio of the marginal products of these inputs always exceeds the ratio of the prices of the inputs. what can you say about the cost-minimizing point of the firm?

Answers

If cost-minimizing point exists for the firm's marginal product, it must be at the corner.

What is marginal product?

The marginal product or marginal physical productivity of an input (factor of production) in economics, and especially in neoclassical economics, is the change in output that results from using one more unit of a specific input (for example, the change in output whenever a firm's labor is increased from five to six units), assuming that the quantities of many other inputs are kept constant. According to the "law" of decreasing marginal returns, the marginal output initially rises as more of one input, like labor, is used while maintaining the same level of the other input, like capital. Labor is the variable input in this case while capital is the fixed input (in a hypothetical two-inputs model). The marginal product decreases as labor, a variable input, is used more frequently.

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A 10-year bond pays 5% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond? Use annual analysis.
Less than $900
(WRONG answer) More than $900 and less than $1,100
More than $1,100
Not enough information is given to tell.

Answers

A 10-year bond pays 5% on a face value of $1,000. If similar bonds are currently yielding 10%, The market value of the bond is Less than $900 i.e. $ 692.77

Given:

Par = $1,000

Coupon payment = $1,000 × 5% = $50

N = 10

I = 10%

Calculate the market value of the bond:

Price = [tex]50 \frac{1 - (1+10 Percent)^-^1^0 }{10 Percent} + \frac{1,000}{(1 + 10 percent) ^1^0}[/tex]

Price = $ 692.77

Bond valuation is a method of figuring out the hypothetical fair value (or par value) of a specific bond.It entails figuring out the bond's face value, or projected value at maturity, as well as the present value of expected future coupon payments, or cash flow.Bond valuation enables investors to determine what rate of return would make a bond investment profitable since a bond's par value and interest payments are fixed.Since bonds play a crucial role in the capital markets, investors and analysts want to understand how a bond's many characteristics interact to ascertain its underlying worth.

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