The selling price for each independent bond issuance is determined using the PV calculations as follows:
1st Bond's Selling Price = $303/26
2nd Bond's Selling Price = $308.87
3rd Bond's Selling Price = $498.49
4th Bond's Selling Price = $282.81
How are bonds' prices determined?The price of a bond is determined by discounting the expected cash flows to their present value using the discount (market) rate.
This can be achieved by calculating the present value of the bond using the present value annuity factor, table.
We can also use an online finance calculator as follows:
Data and Calculations:Market rate = 10%
First Bond Issuance:N (# of periods) = 5 years
I/Y (Interest per year) = 10%
PMT (Periodic Payment) = $80 ($1,000 x 8%)
FV (Future Value) = $0
Results:
PV = $303.26
Sum of all periodic payments = $400 ($80 x 5)
Total Interest = $96.74
Second Bond Issuance:N (# of periods) = 10 (5 years x 2)
I/Y (Interest per year) = 10%
PMT (Periodic Payment) = $40 ($1,000 x 8% x 1/2)
FV (Future Value) = $0
Results:
PV = $308.87
Sum of all periodic payments = $400 ($80 x 5)
Total Interest = $91.13
Third Bond Issuance:N (# of periods) = 20 (10 years x 2)
I/Y (Interest per year) = 10%
PMT (Periodic Payment) = $40 ($1,000 x 8% x 1/2)
FV (Future Value) = $0
Results:
PV = $498.49
Sum of all periodic payments = $800 ($40 x 20)
Total Interest = $301.51
Fourth Bond Issuance:N (# of periods) = 30 (15 years x 2)
I/Y (Interest per year) = 12%
PMT (Periodic Payment) = $30 ($500 x 12% x 1/2)
FV (Future Value) = $0
Results:
PV = $282.81
Sum of all periodic payments = $900 ($30 x 30)
Total Interest = $617.19
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Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be
a. $662.75
b. $710.73
c. $663.75
d. $656.00
e. None of these choices are correct.
Answer:
e. None of these choices are correct.
Explanation:
Calculation for the gross amount of each bonus check
Using this formula
Gross amount=Net bonus/(1-Supplemental rate-
FICA taxes)
Note that FICA taxes includes :
Social Security tax = 6.2%
Medicare tax on earnings=1.45%
Let plug in the formula
Gross amount=$500/(1-22%-6.2%-1.45%)
Gross amount=$500/(1-14.35%)
Gross amount=$500/0.1335
Gross amount= $3,745.32
Therefore the gross amount of each bonus check would be $3,745.32
Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be
Many people know the brand name BMW when thinking about automobile choices. This, or any, widely recognized brand name is a source of:________
a. A cost competitive advantage
b. Market augmentation
c. A product/service differentiation competitive advantage
d. A niche competitive advantage
Answer:
c. A niche competitive advantage
Explanation:
Note, the term niche is often synonymous with the term target market In other words, any widely recognized brand name like BMW has a niche competitive advantage, like been a luxury car, etc.
By niche, we mean when people think about a BMW they remember it's for the high-class persons, who fancy luxury cars, and there is this competitive advantage that arises as people long to get this high-class product.
Huxley Building Supplies' last free cash flow was $1.75 per share . Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. WACC is 12%. Huxley has $5 in short-term investments per share and $7 debt per share. What is the best estimate of the current intrinsic stock price?
Answer:
$40.6344 per share
Explanation:2.
Complete question "Huxley has $5 million in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price?"
Calculation of the value of firm is as below
Yr Cash flow Growth rate New c.flow Pv at 12% Pv of cash flows
1 1.75 25% 2.1875 0.893 1.9534
2 2.1875 25% 2.7344 0.797 2.1793
TCM 48.3083 0.797 38.5017
Value of firm 42.6344
Note: TCM = Terminal cash floe = 2.7344*(1.06) / 12% - 6% = 48.3083 million
Now, Market value of firm = 42.6344 + 5 - 7 = 40.6344 million
Market price per share = $40.6344 million/1 million = $40.6344 per share
Revenue from product Y is $6,000, variable costs are $4,000, and allocated fixed costs are $3,000. If you drop product Y in the long term, profit will:_____.a. increase by $2,000.b. increase by $1,000.c. decrease by $3,500.d. decrease by $100.e. decrease by $2,000.
Answer:
e. decrease by $2,000.
Explanation:
The computation of the profit is shown below:
Contribution margin = Sales revenue from product Y - variable cost
= $6,000 - $4,000
= $2,000
Since there is a contribution margin of $2,000 that absorbs the allocated fixed cost till $2,000 so in the case when the product is discontinued it falls the profit by $2,000
hence, the correct option is e.
following types of businesses are devoted to carrying out marketing activities
Answer:
i think lawyers
Explanation:
In central Florida, the demand for real estate has been increasing rapidly for years. Therefore, the _____ cost of capital is _____ in central Florida's orange groves.a) implicit;decreasingb) explicit;increasingc) implicit;increasingd) explicit;decreasing
Answer:
c) implicit; increasing
Explanation:
Implicit cost may be defined as the cost that has already been occurred in the past but is not necessarily being shown or being reported as some separate expense. It is known by different names like the implied cost, imputed cost, etc. Implicit is something that is not said or mentioned clearly but is implied or suggested.
In the context, the demand for the real estate has increased rapidly in the recent years. Thus we can conclude that the implicit cost of the capital of people has increased in the orange groves of Central Florid.
Juan paid $1,750 in qualifying expenses for his daughter who attended a community college.How much is Juan's lifetime learning credit without regard to AGI limitations or other credits?
A) $825.
B) $250.
C) $1,750.
D) $350.
Answer: $350
Explanation:
From the question, we are informed that Juan paid $1,750 in qualifying expenses for his daughter who attended a community college.
The amount of Juan lifetime learning credit without regard to AGI limitations or other credits will be calculated as:
= $1750 × 20%
= $1750 × 20/100
= $1750 × 1/5
= $350
An American student buys an airline ticket on the Royal Dutch Airlines, KLM. This enters the U.S. balance of payments accounts as a:_____.A. Credit in the financial account. B. Credit in the current account. C. Debit in the financial account. D. Debit in the current account.
Answer:
a
Explanation:
how to make the best of it and I will be there at last minute but I am not sure if I can make it to the meeting tonight but I will be there at last minute.
An American student buys an airline ticket on the Royal Dutch Airlines, KLM. This enters the U.S. balance of payments accounts as (A). Credit in the financial account.
So here is the explanationNow let's understand the man, for example, let's give an example. Now, let's say you have his business owners, Mr. A and Mr. J. Who is Mr. Kay, the customer that Mr. A sells? From now on $ 100 OK Mr. J is Mr. A's trusted customer. Mr. J told Mr. Al that he would pay within two months of the three months.
Expense reports are ok. You have now identified three accounts. However, understanding this example is very questionable to arrive at a solution.
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Last month Peggy Company had a $30,310 profit on sales of $350,000. Fixed costs are $92,190 a month. What sales revenue is needed for Peggy to break even? (Round your answer to the nearest dollar amount.)
A. $122,500
B. $380,310
C. $30,310
D. $263,400
Answer:
D. $263,400
Explanation:
Calculation for the What sales revenue is needed for Peggy to break even
First step is to calculate the contribution ratio
Contribution ratio=(30,310 + 92,190)/350,000
Contribution ratio= 35%
Second Step will be to calculate the Sales Revenue
Sales Revenue=92,190/35%
Sales Revenue= $263,400
Therefore What sales revenue is needed for Peggy to break even is $263,400
Explain the difference between fixed and variable costs and give two examples of each. Can a company budget for variable costs? Explain
Answer:
Fixed cost in an organization does not change and is fixed while the variable cost keep changing if the production is increased.
Explanation:
Fixed cost are said to be that cost which does not change with production level for a certain limit. Let us suppose there is no change in the rent amount if we have only factory for the production of goods.
But the variable cost are those cost which increases as production increases. More will be the variable cost when the production will be more. Also for per unit basis, the variable cost remains the same.
Fixed cost are not important in decision making if there is an excess of capacity available.
For example,
Direct labor, direct material -- variable cost
Salary of supervisor, rent of factory -- fixed cost
Even though there is not much change in the variable cost, like for suppose material price increases, a company can still make a budget that is based on the past experience and predicting the market prices. Similarly, if there is a machine that uses three units of direct material for a piece if finished product, which is not going to change in the future. Thus the company can make a budget.
You are considering quitting your job where you earn $3,300 per month and opening a new business. The cost of renting an office is $2,500 per month, hiring employees would cost $3,100 per month, and utilities would cost $200 per month. The new business will earn a total revenue of $6,300 per month.
Required:
What is your economic profit?
Answer:
Economic profit= -$2,800
Explanation:
Giving the following information:
Old job= $3,300
The cost of renting an office is $2,500 per month, hiring employees would cost $3,100 per month, and utilities would cost $200 per month.
The new business will earn a total revenue of $6,300 per month.
The economic profit incorporates the opportunity cost of the old job.
Economic profit= 6,300 - 2,500 - 3,100 - 200 - 3,300
Economic profit= -$2,800
If a stock's P/E ratio is 13.5 at a time when earnings are $3 per year and the dividend payout ratio is 40%, what is the stock's current price?
A) $24.30
B) $18.00
C) $22.22
D) $40.50
Answer:
D) $40.50
Explanation:
The computation of the stock current price is as follows:
Stock price is
= Price earning ratio × Earning per share
= 13.5 × $3
= $40.50
Hence, the stock current price is $40.50
Therefore the correct option is d.
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Suppose your company has an option that gives them the right to sell $1 for 5 Reals in 3 months, what would you recommend your company do with the option?
A- Do not use the option but sell coffee in Brazil
B- Throw the option aways as it is not useful
C- Do not use the option but buy coffee in Brazil
D- Use the option and buy coffee in Brazil
E- Use the option and sell coffee in Brazil
Answer:
E- Use the option and sell coffee in Brazil
Explanation:
Real is the currency of the country Brazil.
In the context, it is said that, the exchange rate of the one dollar is five Brazilian reals in three months. Therefore I would recommend the company to sell the coffee in Brazil because they have a higher rate of exchange and this will help to earn more profit.
Therefore, I would recommend to use the option and would sell coffee in Brazil.
There are 200 units in inventory at the start of week 1. What are the net requirements in week 4 if there is a scheduled receipt of 100 units every other week and a two week production lead time?
1 2 3 4 5
Gross Requirements 550 450 400 400 500
Scheduled receipts 100 0 100 0 100
Projected ending Inventory
Net Requirements
Planned Receipts 350 450
Planned Orders 350 300
a. 250
b. 300
c. 350
d. 400
Answer:
a. 250
Explanation:
______________________ 1 _____ 2 _____ 3 _____ 4
Gross Requirements _____ 550 ___450 ____400 ___400
Scheduled receipts ______ 100 ____ 0 _____ 100 ___ 0
Beginning Inventory _____ 200 ____100 ____ 100____150
Net Requirements _______ 250____350____ 200____250
Planned Receipts ________350 ____450_____350 ___ 300
Projected Ending Inventory _100____ 100_____ 150____ 50
Planned Orders __________350 ___ 300_____300____ 0
The net requirement in week 4 is 250 units
Working
Formulas or calculations
Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory
Projected Ending Inventory = PLanned receipt - Net requirements
Week 4
Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory
PLacing values in the formula
Net Requirements = 400 - 0 - 150 = 250
Sarah and Jane formed a partnership with capital contributions of $210,000 and $123,000, respectively. Peter contributed $86,000 to acquire an ownership interest of 12% in the new partnership. How much is the total bonus for the existing partners?
Answer:
$35,720
Explanation:
The computation of the total bonus for the existing partners is shown below;
Total capital is
= $210,000 + $123,000 +$86,000
= $419,000
Now
Share of new partner
= $419,000 × 12%
= $50,280
But the actual amount that needs to pay is $86,000
So, the bonus would be
= $86,000 - $50,280
= $35,720
Hence, the total bonus for the existing partners is $35,720
How long do financial records remain on your credit report?
Webster Corporation is preparing a master budget for the first quarter. The company budgets production of 2,980 units in January, 2,750 units in February and 3,490 units in March. Each unit requires 0.7 hours of direct labor. The direct labor rate is $14 per hour. Compute the budgeted direct labor cost for the first quarter budget.
Answer:
Total direct labor cost= $90,356
Explanation:
First, we need to determine the total direct labor hour for each month:
January= 2,980*0.7= 2,086
February= 2,750*0.7= 1,925
March= 3,490*0.7= 2,443
Total direct labor hours= 6,454
Now, the direct labor cost for the first quarter:
Total direct labor cost= 14*6,454
Total direct labor cost= $90,356
Snap On Inc has a beta of 2.67 and the expected market return is 0.19. In addition, Treasury bills (risk-free asset) are currently yielding 0.02. Find the expected return for Snap On Inc.
Answer: Expected Return = 0.47
Explanation:
Using the CAPM, The Capital Asset Pricing Model formulae , we have that
Expected Return = Risk Free Rate + Beta(Market Return - Risk Free Rate)
Where
market return is 0.19
Beta =2.67
risk-free asset= 0.02
Expected Return=0.02 +2.67 X (0.19 - 0.02)
=0.02 +2.67 X (0.17)
0.02 +0.4539
Required Return=0.47
Therefore Expected Return for Snap On Inc is 0.47
Zeta Corporation is a manufacturer of sports caps, which require soft fabric. The standards for each cap allow 2.00 yards of soft at a cost of $2.00 per yard. During the month of January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. What is Zeta Corporation's materials price variance for the month of January? a. $2.000 F b. $2,000 U c. $2.500 F d. $2,500 U
Answer:
Direct material price variance= $2,500 favorable
Explanation:
Giving the following information:
The standards for each cap allow 2.00 yards of soft for $2.00 per yard. During January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2 - 2.1)*25,000
Direct material price variance= $2,500 favorable
RetRyder Hand Trucks has a preferred share issue outstanding that pays a dividend of $1.30 per year. The current cost of preferred equity for RetRyder is 7.40 percent. If RetRyder issues additional preferred shares that pay exactly the same dividend and the investment banker retains 8.60 percent of the sale price, what is the cost of the new preferred shares for RetRyder?
What is the current price of preferred shares?
Answer:
Current price of preferred shares = P(ps)
= D/K(ps)
= $1.3 / 0.074
= 17.567568
= $17.56
Cost of preferred equity = Kps
= D / P(ps)*(1-f)
= $1.3 / $17.56(1 - 0.086)
= $1.3 / $16.04984
= 0.080998
= 8.09%
The beta of RicciCo.'s stock is 3.2, whereas the risk-free rate of return is 9 percent. If the expected return on the market is 18 percent, then what is the expected return on RicciCo.?a. 28.80%b. 48.60%c. 57.60%d. 37.80%
Answer:
d. 37.80%
Explanation:
Calculation for what is the expected return on RicciCo
Using this formula
Expected return = Risk free rate + Beta *(Market return - Risk free rate)
Let plug in the formula
Expected return = 9 + 3.2*(18-9)
Expected return = 9 + 3.2*9
Expected return= 37.80%
Therefore the expected return on RicciCo will be
37.80%
The shoe department accounts for 2,700 square feet in a store and achieved sales per square foot of $800. Calculate the total sales for the shoe department.
Answer:
$2,160,000
Explanation:
if the sales per square foot are $800 and the area covered by the shoe department is 2,700 square feet, then total sales = $800 x 2,700 = $2,160,000
Sales per square foot are an important tool when measuring sales performance of brick and mortar stores, especially those located in malls. The malls with the highest sales per square foot are also expensive or premium malls, e.g. Bal Harbour in Miami Beach sells on average $3,185 per square foot.
Sandall and Schwartz describe six types of curriculum modifications that can help children with special needs participate fully; these include all EXCEPT:_______
a. Simplify activities.
b. Adaptive devices.
c. Specialized packaged and purchased curriculum.
d. Environmental support.
Answer:
Option C:specialized packaged and purchased curriculum.
Explanation:
It was a term from the building blocks curriculum (Sandall & Schwartz 2008). Specialized package are special programs for the children to aid their learning.
Programs that are good and help children grow Developmentally are based on What is known about how children develop and learn, individual differences between children, and qualities of their families and culture.
Developmentally good curriculum helps the various aspects of child development, individual differences, and the families and culture of the children in the program.
The next dividend payment by Hoffman, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 7.5% forever. Assume the stock currently sells for $49.30 per share. A. What is the dividend yield?B. What is the expected capital gains yield?
Answer:
A. Dividend yield;
= Next Dividend / Stock price
= 2.85/49.30
= 5.78%
B. Expected capital gains yield.
The stock price is going to increase by the amount that the dividend increases by so the capital gains yield will be the same as the growth rate which is;
= 7.5%
The sales level that results in a project's net income exactly equaling zero is called the _____ break-even.
A) operational
B) leveraged
C) accounting
D) cash
E) present value
Answer:
i think it c
Explanation:
The Patient Protection and Affordable Care Act subsidizes parts of the insurance industry in an attempt to lower insurance and health care costs.
O True
False
Answer:
the answer is true
Explanation:
List 5 Skills that demonstrate good professionalism:
Sunland Company purchased a new machine on October 1, 2017, at a cost of $80,360. The company estimated that the machine has a salvage value of $7,910. The machine is expected to be used for 70,800 working hours during its 7-year life. Compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a December 31 year-end. (Round answers to 2 decimal places, e.g. 5,275.25.) 2017 2018 The depreciation expense under the straight-line method
Answer:
2017 = $2,587.50
2018 = $10,350
Explanation:
The computation of the depreciation expense using the straight line method for the year 2017 and 2018 are shown below:
As we know that
The formula to compute the depreciation expense under the straight-line method is
= (Purchased Cost - salvage value) ÷ useful life
For 2017 year
= ($80,360 - $7,910) ÷ 7 year
= $10,350
For 3 months, it is
= $10,350 × 3 ÷ 12
= $2,587.50
And, for 2018, it is $10,350
A July sales forecast projects that 9,000 units are going to be sold at a price of $11.00 per unit. Management forecasts 2% growth in sales each month. Total August sales are anticipated to be:_______
a. $76,950.
b. $71,250.
c. $68,400.
d. $67,500.
e. $74,100.
Answer:
the expected august sales is $100,980
Explanation:
The computation of the expected august sale is shown below:
July Sales (9,000 units × $11 per unit) $99,000
Add: Growth ($99,000 × 2%) $1,980
Total August Sales $100,980
This is the answer but the same is not provided in the given options
Hence, the expected august sales is $100,980
The same is to be considered
A 7.05 percent coupon bond with 25 years left to maturity can be called in eight years. The call premium is one year of coupon payments. It is offered for sale at $1,075.85. What is the yield to call of the bond? (Assume interest payments are semiannual.)
Answer:
Yield to call is 5.88% annually
Explanation:
The rate of return bondholders receives on a callable bond until the call date is called Yield to call.
Yield to Call = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
It is assumed that face value of Bond is $1,000
C = Coupon Payment = $1,000 x 7.05% x 6/12 = $35.25
F = Face value = $1,000
P = Call price = $1,075.85
n -= number of periods to call = 8 x 2 = 16 periods
Yield to Call = [ $35.25 + ( $1,000 - $1075.85 ) / 16 ] / [ ( $1,000 + $1075.85 ) / 2 ]
Yield to Call = [ $35.25 - 4.74 ] / $1,037.925
Yield to Call = $30.51 / $1,037.925
Yield to Call = 0.0294
Yield to Call = 2.94% semiannually
YTC = 2.94% x 12/6 = 5.88% annually