Carla Vista Co. had the following assets on January 1, 2017. Item Cost Purchase Date Useful Life (in years) Salvage Value Machinery $63,900 Jan. 1, 2007 10 $ 0 Forklift 27,000 Jan. 1, 2014 5 0 Truck 30,064 Jan. 1, 2012 8 2,704 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $10,800. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2016.

Answers

Answer 1

Answer:

I have no Idea ask your teacher


Related Questions

Pearl Corporation reported net income of $49,100 in 2020. Depreciation expense was $17,200. The following working capital accounts changed.

Accounts receivable $11,200 increase
Available-for-sale debt securities 16,900 increase
Inventory 7,300 increase
Nontrade note payable 14,400 decrease
Accounts payable 13,300 increase

Required:
Compute net cash provided by operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answers

Answer:

Net operating cash flow   $68,300

Explanation:

Operating cash flow is the amount of cash generated by a company from its main and normal business activity. This cash flow is useful to gauge the financial viability of a firm's business activity; the larger the better.

It is essentially computed as the net movement of cash inflow and outflow in respect of a business activities.

It is computed as follows:                          

                                                                  $

Net income                                              49,000

Add deprecation                                      17,200

Less increase in receivable                    (11.200)

add increase in payables                         13,300

Net operating cash flow                           68,300

Note that only items that relate to trading which is the core business area of the Pearl Corporation are considered. Depreciation is  added because it is a non-cash item initially deducted from net income.

An increase in receivable means a reduction in cash while an increase in payables implies cash savings

Net operating cash flow   $68,300

Olivia wants to buy some vacant land for investment purposes. She currently cannot afford the full purchase price. Instead, Olivia pays the landowner $8,000 to obtain an option to buy the land for $175,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $10,000. What is the amount and character of Olivia's gain or loss

Answers

Answer:

$2,000 gain

Explanation:

Calculation to determine the amount and character of Olivia's gain or loss

Based on the information given we were told that she pays the landowner the amount of $8,000 in order for her to obtain an option to buy a land in which after purchasing the option she sells the option for the amount of $10,000 making her to gain the amount of $2,000.

Olivia's gain =$10,000-$8,000

Olivia's gain =$2,000

Therefore The amount and character of Olivia's gain will be $2,000

Answer: $2000

Explanation:

The amount and character of Olivia's gain or loss will be gotten by calculating the amount that Olivia paid the landowner $8,000 to obtain an option to buy the land and the amount she eventually sold the option. This will be:

= $10000 - $8000

= $2000

Therefore, she had a capital gain of $2000

Suppose that a hot dog vendor uses a cart (K) and his time (L) to make and sell hot dogs. The vendor's production function is , where Q is the number of hot dogs per day. Suppose that the rental on hot dog carts is $50 per day and that the vendor wants to produce 500 hot dogs per day. The demand for labor is ____.

Answers

Answer:

L = 2084.75 W^-0.3

Explanation:

The computation of the demand of the labor is shown below:

At the optimum input

As we know that

MRTS = MPL ÷ MPK = w ÷ r

0.7(K ÷ L)^0.3 ÷ 0.3(L ÷ K)^0.7 = w ÷ 50

7K ÷ 3L = w ÷ 50

K = (3 ÷ 350)wL

Now apply the production function

Q = K^0.3L^0.7

500 = ((3 ÷ 350)wL)^0.3 L^0.7

500 = (3 ÷ 350)^0.3 × w^0.3 × L

L = 2084.75 × w^-0.3.

1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent.) 3. What percentage of the throughput time was spent in non–value-added activities? (Round your percentage answers to the nearest whole percent.) 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place.)

Answers

Answer:

1. Throughput time.

This is the length of time it takes to transform a raw material into finished goods.

= Inspection time + Process time + Move time + Queue time

= 0.7 + 2.8 + 1.3 + 4.1

= 8.9 days

2. Manufacturing Cycle Efficiency:

= Value added time / Throughput time * 100%

= 2.8 / 8.9 * 100%

= 31%

3. Percentage of time spent on none valuable activities:

= 1 - Manufacturing cycle efficiency

= 1 - 31%

= 69%

4. Delivery Cycle time:

= Wait time + Throughput time

= 16.2 + 8.9

= 25.1 days

5. New MCE.

Queue time is eliminated:

= 8.9 - 4.1

New Throughput time = 4.8 days

MCE = 2.8 / 4.8

= 58%

name two considerations by the Minister of finance when setting up a budget​

Answers

Answer:

1. Revenue

2. Expenditure

Explanation:

Given that a country's budget is a robust plan usually prepared by the government of the country under the watchful eye of the Minister of Finance which thereby is used in presenting the country's expected or predicted revenues and proposed expenditure for the subsequent financial year.

Hence, two considerations by the Minister of finance when setting up a budget​ are REVENUE and EXPENDITURE.

Sarah is working on the layout of a company newsletter. What should she keep in mind?

Answers

Answer:

should understand deeply to put well the newsletter in approximately file card so as to avoid misplace and disappear of potential file.

Garland Inc. offers a new employee a single-sum signing bonus at the date of employment, June 1, 2021. Alternatively, the employee can receive $44,000 at the date of employment plus $15,000 each June 1 for four years, beginning in 2024. Assuming the employee's time value of money is 9% annually, what single amount at the employment date would make the options equally desirable

Answers

Answer: $‭84,902.17‬

Explanation:

Find the present value of the $44,000 and the $15,000 each June for 4 years.

First find the present value of the $15,000 in June 2024:

= 15,000 * Present value interest factor of Annuity due, 4 years, 9%

= 15,000 * 3.5313

= $‭‭52,969.5‬0

Then present value it to 2021:

= 52,969.50 / (1 + 9%)³

= $40,902.17

Add this to the $44,000 on June 2021:

= 44,000 + 40,902.17

= $‭84,902.17‬

Employee will be indifferent if $‭84,902.17‬ is received.

Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment. Multiple Choice Gain of $5,000. Loss of $35,000. Gain of $20,000. Loss of $5,000.

Answers

Answer:

Loss of $5,000

Explanation:

loss to be recorded on the sale of equipment is $5,000

Presented below is a condensed version of the comparative balance sheets for Ravensclaw Corporation for the last two years at December 31.

2019 2018
Cash $230,100 $101,400
Accounts receivable 234,000 240,500
Investments 67,600 96,200
Equipment 387,400 312,000
Accumulated Depreciation-Equipment (137,800 ) (115,700 )
Current liabilities 174,200 196,300
Common stock 208,000 208,000
Retained earnings 399,100 230,100

Additional information:
Investments were sold at a loss of $13,000; no equipment was sold; cash dividends paid were $39,000; and net income was $208,000.

Required:
Create a Statement of Cash Flows for 2019.

Answers

Answer:

Ravensclaw Corporation

Statement of Cash Flows for the year ended December 31, 2019:

Net income                           $208,000

Add non-cash expense:

Depreciation expense              22,100

Loss from sale of investment  13,000

Cash from operations         $243,100

Adjustments of working capital:

Accounts receivable               $6,500

Current liabilities                    -22,100

Net cash from operations $227,500

Investing activities:

Cash from investment sale   15,600

Equipment                            -75,400

Financing activities:

Cash dividends paid            -39,000

Net cash flows                   $128,700

Explanation:

a) Data and Calculations:

                                            2019          2018      Differences

Cash                               $230,100     $101,400  +$128,700

Accounts receivable       234,000     240,500   -$6,500

Investments                      67,600        96,200   -$28,600

Equipment                      387,400       312,000   +$75,400

Accumulated Depreciation-

Equipment                    (137,800)      (115,700)   +$22,100 Depreciation Exp.

Current liabilities           174,200       196,300     -$22,100

Common stock            208,000      208,000      $0

Retained earnings        399,100      230,100      +$169,000

Cash dividends                                                    +$39,000

Net income = $208,000 ($169,000 + $39,000)

Cash from sold investments = $15,600 ($28,600 - $13,000)

Theory Enterprises uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 The variable-overhead spending and efficiency variances for Theory are: Variable-Overhead Spending Variance Variable-Overhead Efficiency Variance A. $ 0 $ 0 B. $ 0 $ 2,000 unfavorable C. $ 2,000 unfavorable $ 0 D. $ 2,000 favorable $ 2,000 unfavorable E. $ 2,000 unfavorable $ 2,000 favorable

Answers

Answer:

See below

Explanation:

a. Variable overhead spending variance

= AH × ( AR - SR)

Where

AH = Actual Hours worked = 24,000

AR = Actual variable overhead rate = $50,000

SR = Standard variable overhead rate = $48,000

Therefore,

Variable overhead spending variance

= 24,000 × ($50,000 - $48,000)

= $48,000

Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct materials requirement per unit is 2 ounces (oz.). The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month. There was 3,160 ounces of direct material in inventory at the start of July. The total ounces of direct materials to be purchased in July is:

a. 15,720 oz.
b. 15,880 oz.
c. 16,200 oz.
d. 15,800 oz.
e. 19,040 oz.

Answers

Answer:

Purchases= 15,880 ounces

Explanation:

Giving the following information:

Production:

July= 7,900

August= 8,100

The direct materials required per unit are 2 ounces (oz.).

Desired ending inventory= 20% of the units of budgeted production in the following month.

Beginning inventory= 3,160 ounces

To calculate the direct material purchase, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 7,900*2 + (8,100*2)*0.2 - 3,160

Purchases= 15,880 ounces

Pleaseeeee helppppp!!!!

Answers

Answer:

they are interns hope it help

They are interns because they follow people around to gain real life experience and instead of money it’s for college points.

You have acquired a new CT scanner at a cost of $750,000. You expect to perform 7,000 procedures per year over the estimated 5-year life of the scanner. Assuming no salvage value and an annual increase in replacement cost of 10 percent, what capital charge per procedure should the hospital levy to provide for replacement cost in the second year

Answers

Answer:

The capital charge per procedure that the hospital should levy to provide for replacement cost in the second year is:

= $64.82 per procedure.

Explanation:

a) Data and Calculations:

Cost of CT Scanner = $750,000

Annual increase in replacement cost = 10%

Estimated useful life of the scanner = 5 years

Number of procedures per year over the estimated 5-year life = 7,000

Total number of procedures = 35,000 (7,000 * 5)

Replacement cost in 2 years = $750,000 * FV factor

= $750,000 * 1.21

= $907,500

Amount to charge per procedure = $907,500/14,000

= $64.82

On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterestbearing note requiring five annual payments of $20,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $100,000 on December 31, 2025. A 10% interest rate properly reflects the time value of money in this situation.Required:Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021.

Answers

Answer:

Barrett Company

The amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021 is:

= $125,500.

Explanation:

a) Data and Calculations:

Non-interest-bearing note annual payment = $20,000

Date of annual payments = December 31

Lump sum payment on December 31, 2025 = $100,000

Interest rate reflecting the time value of money = 10%

The amount for the note payable and corresponding merchandise on January 1, 2021 is:

PV annuity factor for 4 years at 10% = 3.170

Total PV of annual payments = $63,400 ($20,000 * 3.170)

PV of lump-sum payment =         62,100 ($100,000 * 0.621)

Total PV of payments =           $125,500

Desert Company exchanged 3,000 shares of its stock, for equipment from Jungle Company. Desert's stock has a par value of $50 per share and at the time of the exchange was not actively traded on a market but 12 months ago was sold at a value of $49 per share. The quoted fair value of the equipment is $170,993. What is the amount Desert should record as the historical cost of the equipment?

Answers

Answer:

Desert Company

The amount that Desert should record as the historical cost of the equipment is:

= $170,993.

Explanation:

a) Data and Calculations:

Value of stock exchanged = $150,000 (3,000 * $50)

Fair value of equipment = $170,993

Gain from exchange of Equipment for shares = $20,993

b) The quoted fair value of Jungle's equipment should be used to record the historical cost in the financial statement of Desert Company.   This value represents the only verifiable value.  This value should then be compared to the value of the Desert shares exchanged with Jungle to determine if there is a loss or a gain from the exchange.

Muecke Inc. is working on its cash budget for April. The budgeted beginning cash balance is $40,000. Budgeted cash receipts total $150,000 and budgeted cash disbursements total $158,000. The desired ending cash balance is $50,000. To attain its desired ending cash balance for April, the company needs to borrow: Group of answer choices $18,000 $0 $50,000 $82,000

Answers

Answer:

See

Explanation:

At the end of 2009, the following information is available for Clobes Company, Snyder Company, and Welz Company (you must show your calculations to receive full credit): Required: Which company has the highest level of financial risk? Using an appropriate ratio, support your answer. Which company is the most profitable from the owners' perspective? Using an appropriate ratio, support your answer. (3) Which company is getting the greatest return on assets? Show calculations.

Answers

Answer:

Answer is explained in the explanation section below.

Explanation:

Note: This question is incomplete and lacks necessary data to solve for this question. However I have found similar question on the internet and I will be using that data. Besides, I have attached the data used in the attachment below.

Solution:

1. The debt-to-equity ratio is the best way to assess financial risk. A higher debt-to-equity ratio indicates a higher level of financial risk. This ratio represents the willingness of the equity of the owners to fulfil their obligations.

Formula used:

Debt-to-equity ratio  =  Total liabilities divided by owner's equity

For Clobes:

Total liabilities = 100,000

Owners' equity =  200,000

Debt-to-equity ratio = 100000/200000 = 0.5

For Snyder:

Total liabilities = 300,000

Owners' equity = 200,000

Debt-to-equity ratio = 300000/200000 = 1.5  

For Welz:

Total liabilities = 300,000

Owners' equity = 100,000

Debt-to-equity ratio = 300000/100000 = 3

Welz faces the greatest financial risk because it has the highest debt-to-equity ratio. It has a debt-to-equity ratio of three. Even though it depends on the industry, a company's debt-to-equity ratio should be between 1 and 1.5 if it is considered optimal. In this case, Welz's financial risk is considerably higher.

2. calculate Return on Equity(ROE)

Formula used:

ROE = Net income / Owner's equity

For Clobes:  

Net income = 25,000

Owners' equity = 200,000

ROE = 25,000 / 200000 = 0.125

For Snyder:

Net income = 30,000

Owners' equity = 200,000

ROE = 30000 / 200000 = 0.15

For Welz:  

Net income = 20,000

Owners' equity = 200,000

ROE = 20000 / 100000 = 0.2

Welz has the highest return of equity (ROE) of 0.2.

As a result, Welz is the most profitable company.

3. Return on assets:

Formula used

Return on Assets = Net income / Total assets

For Clobes:  

Net income = 25,000

Total assets = 300,000

Return on Assets  = 25,000  / 300000 = 0.08

For Snyder:  

Net income = 30,000

Total assets = 500000

Return on Assets  = 30000 / 500000 = 0.06

For Welz:  

Net income = 20,000

Total assets = 400,000

Return on Assets  = 20000 / 400000 = 0.05

Hence,

Clobes has the highest return on assets, which is 0.08.

TryFit Co. uses process costing to account for the production of energy food bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $13,000 in materials and $10,000 in conversion costs. April costs were $42,000 for materials and $46,000 for conversion costs. During April 14,000 units were completed. Ending work in process inventory was 10,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to: (Round your intermediate calculations to four decimal places.) Multiple Choice $30,487.40 $37,654.00 $79,520.80 $46,454.00

Answers

Answer:

$37,654.00

Explanation:

beginning WIP = $13,000 + $10,000 = $23,000

costs added during the month = $42,000 + $46,000 = $88,000

total materials costs = $55,000

materials cost per EUP = $55,000 / 24,000 units = $2.29

total conversion costs = $56,000

conversion cost per EUP = $56,000 / 19,000 = $2.95

ending inventory = (10,000 x $2.29) + (10,000 x $2.95 x 50%) = $37,650

One of the typical characteristics of management fraud is: Multiple Choice Illegal acts committed by management to evade laws and regulations. Falsification of documents in order to misappropriate funds from an employer. Victimization of investors through the use of materially misleading financial statements. Conversion of stolen inventory to cash deposited in a falsified bank account.

Answers

Answer:

Victimization of investors through the use of materially misleading financial statements

Explanation:

Management fraud is when the management of a company defrauds either their investors and creditors by using misleading financial statement

Marigold Corp. took a physical inventory on December 31 and determined that goods costing $155,000 were on hand. Not included in the physical count were $28,000 of goods purchased from Pelzer Corporation, FOB shipping point, and $21,800 of goods sold to Alvarez Company for $30,400, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Marigold report as its December 31 inventory

Answers

Answer: $‭204,800‬

Explanation:

When a good is shipped FOB shipping point, it means that the buyer assumes responsibility for the goods as soon as the goods reach the place they will be shipped from. The purchase from Pelzer should therefore be included in inventory because it has already been shipped.

A good shipped FOB Destination means that the buyer only assumes responsibility after the goods have been delivered to them. As the sale to Alvarez was still in transit, it is still the responsibility of Marigold and should be included in inventory.

Inventory is therefore:

= 155,000 + 28,000 + 21,800

= $‭204,800‬

The United States is said to have an absolute advantage in producing food compared with Japan. What does that mean?

It must import most of its food from Japan.
It produces food more efficiently than Japan.
It produces food at a higher cost than Japan.
It must export most of its food to Japan.

Answers

Answer:

It produces food more efficiently than Japan.

Explanation:

Given that an ABSOLUTE ADVANTAGE is when a country or company can produce the same quantity of goods more efficiently than another country or company with lesser input or produce more quantities of goods with more efficiently with the same input.

Hence, in this case, when it is said that the United States has an absolute advantage in producing food compared with Japan, it means that "It produces food more efficiently than Japan."

The correct answer would be B: It produces food more efficiently than Japan

Ted owns a small florist shop. Since his business is booming, his realizes he will soon need one more delivery van. He decides he will purchase a full size van versus a minivan, which he currently owns. The van he is looking to buy in 3 years will cost him $25,000. How much should he invest each quarter into an account that pays 3% per year compounded quarterly, so that he can have the desired funds in 3 years

Answers

Answer:

$1998.79

Explanation:

Quarterly payment = future value /annuity factor

Annuity factor = {[(1+r)^mn] - 1} / r

r = interest rate  = interest rate / number of compounding 3%/4

N = number of years

m = number of compounding

Annuity factor =[ (1.0075)^12 - 1] / 0.0075 = 12.507586

Quarterly payment = $25,000 / 12.507586 = $1998.79

is it possible for a company to be too liquid

Answers

Answer:

yes it is possible ......

Answer:

A company can have too much liquidity, which may be a sign that it's holding onto cash that could be invested. In a sense, even borrowing money is another typical source of liquidity for businesses. To meet its obligations, the ability to take out loans will be a factor in its liquidity.

Explanation:

Beyond grades, what else would make a student stand out to an admissions counselor?

Answers

Answer:

Extracurricular Activity

Colleges prefer students who are active in academics as well as off it. This shows diversity in the student and is a trait that the counselors would be looking for.

Extracurricular activities like after-school jobs, sports and even volunteering at NGOs weigh heavily in the assessment of a student's ability to fit in a college and if you had great grade whilst doing these activities, you will have a better chance at being admitted.

A congresswoman from a state with several semiconductor factories argues that the government should impose a tariff on semiconductors because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of semiconductors and thus, in case of war, unable to make enough weapons to defend itself. Which of the following justifications is the senator using to argue for the trade restriction on semiconductors?

a. Infant-industry argument
b. Using-protection-as-a-bargaining-chip argument
c. Jobs argument
d. Unfair-competition argument
e. National-security argument

Answers

Answer:

National-security argument

Explanation:

Governments may intervene in markets for any reason at all.

A tariff is simply known as a tax

that is imposed on imports. There are various reasons why trade is restricted for product or services. The different arguments for restricting trade includes:

1. jobs argument

2. national security argument

3. infant-industry argument

4. unfair-competition argument

5. protection-as-bargaining-chip argument

The national security argument state that industries or product important to national security should be protected from foreign competition and not allow to focus mainly on dependence on imports that could be scattered during wartime.

The National Security Response is said to be as good as long as we base policy on true security needs.

Suppose a monopolist is producing a level of output such that MR > MC. Which of the following best describes what will happen as the firm moves to its profit-maximizing equilibrium? A) Marginal revenue will rise and marginal cost will fall. B) Marginal cost and marginal revenue will both rise. C) Marginal revenue will fall and marginal cost will rise. D) Marginal cost and marginal revenue will both fall.

Answers

Answer: C) Marginal revenue will fall and marginal cost will rise.

Explanation:

The profit-maximizing equilibrium is the production point where the Marginal Revenue equals the Marginal cost.

As the monopolist moves towards this point, they will see their marginal costs increase because they will be producing more goods.

For a monopolist to sell more goods however, they will need to reduce their prices. This means that Marginal revenue will come down.

Marginal revenue will keep decreasing and Marginal cost will keep increasing until both of them become equal to each other.

On January 1, 2021, Carla Vista Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Carla Vista to make annual payments of $195000 at the beginning of each year for 5 years beginning on January 1, 2021 with the title passing to Carla Vista at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Carla Vista uses the straight-line method of depreciation for all of its fixed assets. Carla Vista accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $813124 at an effective interest rate of 10%.

In 2022, Carla Vista should record interest expense of:________

a. $67994.
b. $48494.
c. $61812.
d. $42312.

Answers

Answer:

In 2022, Carla Vista should record interest expense of:________

 

c. $61,812.

Explanation:

a) Data and Calculations:

The Present Value (PV) of a 5-year noncancelable lease of equipment = $813,124

Annual lease payments = $195,000

Effective interest rate = 10%

Estimated lease term = 5 years

Estimated useful life of equipment = 7 years

Salvage value of equipment = $0

Method of Depreciation = Straight-line method

Lease period percentage = 71% (5/7)

Interest expense:

December 31, 2021 = $81,312 ($813,124 * 10%)

December 31, 2022 - $61,812 ($813,124 - $195,000 * 10%)

Because testing of nuclear bombs was halted internationally in 1992, the Department of Energy has developed a laser system that allows engineers to simulate (in a laboratory) conditions in a thermo-nuclear reaction. Due to soaring cost overruns, a congressional committee undertook an investigation and discovered that the estimated development cost of the project increased at an average rate of 2% per six-months over a 5-year period. If the original cost was estimated to be $3.1 billion 5 years ago, what is the expected cost today?

Answers

Answer:

The estimated development cost of the project will increase from the original cost of $3.1 billion 5 years ago to $3.7727 billion today.

Explanation:

Data and Calculations:

Original estimated development cost = $3.1 billion

Average rate  of interest = 2% per six months or 4% per year (2 * 2%)

Period of project = 5 years using 4% or 10 using 2%

Using a future value factor of 1.217 from a future value table at 4% per year for 5 years:

The expected cost today = $3.1 billion * 1.217 = $3.7727 billion

Using an online financial calculator:

Results:

FV = $3,778,882,701.98

Total Interest $678,882,701.98

N (# of periods)  10

I/Y (Interest per year)  4

PV (Present Value)  $3,100,000,000

PMT (Periodic Payment)  0

Settings

P/Y (# of periods per year)  2

C/Y (# of times interest compound per year)  2

Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 8.80%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:

Answers

Answer:

$775,751

Explanation:

the effective semiannual rate = 1.088 = (1 + r)²

r = 4.3072%

we must first determine the present value of the face value = $1,000,000 / (1 + 4.3072%)¹⁰ = $655,927.02

now the present value of the coupon payments = $15,000 x [1 - 1/(1 + i)ⁿ ] / i = $15,000 x [1 - 1/(1 + 0.043072)¹⁰ ] / 0.043072 = $119,823.98

market price = $775,751

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