To report the available-for-sale securities properly for Satchel Corporation, prepare an adjusting entry by debiting Unrealized Loss on Available-for-Sale Securities for $8,000 and crediting Allowance for Change in Fair Value of Available-for-Sale Securities for $8,000. To prepare the adjusting entry to report the available-for-sale securities properly for Satchel Corporation, follow these steps:
1. Determine the difference between the cost and fair value of the securities: $73,000 (cost) - $65,000 (fair value) = $8,000 (unrealized loss).
2. Prepare the adjusting entry:
Debit: Unrealized Loss on Available-for-Sale Securities - $8,000
Credit: Allowance for Change in Fair Value of Available-for-Sale Securities - $8,000
3. Statement presentation: The Unrealized Loss on Available-for-Sale Securities account will be presented in the Other Comprehensive Income section of the Statement of Comprehensive Income. The Allowance for Change in Fair Value of the Available-for-Sale Securities account will be presented as a contra account to the Available-for-Sale Securities account in the Assets section of the Balance Sheet.
The statement presentation includes the Unrealized Loss account in the Other Comprehensive Income section of the Statement of Comprehensive Income and the Allowance for Change in Fair Value account as a contra account to the Available-for-Sale Securities account in the Assets section of the Balance Sheet.
To know more about Allowance refer here:
https://brainly.com/question/13058743#
#SPJ11
4. Andre wants to buy a new car in a few years. He sets a goal to have (c) $ 43,950 in his savings account in order to buy a new car. Andre plans to save money for 5 years by making monthly deposits to a savings account that has an APR of 2.5% compounded monthly, Round answers to two decimal places. a. In order for Andre to reach his savings goal, how much will Andre need to save each month? (3 pt) b. Overall, Andre contributed how much of his own money into the savings account? (4 pt)
Andre needs to save $699.34 each month in order to have $43,950 in his savings account after 5 years, and his total personal contribution to the savings account will be: approximately $41,960.40.
a. To determine the amount Andre needs to save each month, we will use the future value of an ordinary annuity formula:
FV = P * (((1 + r)^nt - 1) / r)
Where FV is the future value of the annuity, P is the monthly deposit, r is the monthly interest rate, n is the number of times interest is compounded per year, and t is the number of years.
First, we need to convert the APR (2.5%) to a monthly interest rate:
2.5% / 12 = 0.2083% or 0.002083 as a decimal
Now, we can plug in the values:
$43,950 = P * (((1 + 0.002083)^60 - 1) / 0.002083)
Solving for P:
P = $43,950 / (((1 + 0.002083)^60 - 1) / 0.002083)
P ≈ $699.34
So, Andre needs to save approximately $699.34 each month to reach his savings goal.
b. To calculate the total amount of Andre's own money contributed to the savings account, we simply multiply the monthly deposit amount by the total number of months:
Total contribution = Monthly deposit * Number of months
Total contribution = $699.34 * 60
Total contribution ≈ $41,960.40
To know more about savings account, refer here:
https://brainly.com/question/30545751#
#SPJ11
Document how the ability of monetary authorities to reduce involuntary unemployment depends on the marginal propensity to consume, on the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate. Please include in charts or graphs to verify your thinking process
Monetary authorities, such as central banks, have the ability to reduce involuntary unemployment through various policies.
The effectiveness of these policies depends on several factors, including the marginal propensity to consume, the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate.
The marginal propensity to consume refers to the amount of additional consumption that occurs when disposable income increases. If this propensity is high, then monetary policy can be more effective in reducing unemployment because an increase in spending will have a larger impact on overall demand.
The sensitivity of investment to changes in interest rates is also important. If investment is highly sensitive to interest rates, then monetary policy can be effective in stimulating investment and increasing overall demand. On the other hand, if investment is relatively insensitive to interest rates, then monetary policy may have limited impact.
Finally, the sensitivity of net exports to the exchange rate is also a key factor. If net exports are highly sensitive to changes in the exchange rate, then monetary policy can be effective in stimulating exports and increasing overall demand. However, if net exports are relatively insensitive to the exchange rate, then monetary policy may have limited impact.
Overall, the effectiveness of monetary policy in reducing involuntary unemployment depends on several factors, including the marginal propensity to consume, the sensitivity of investment to changes in interest rates, and the sensitivity of net exports to the exchange rate. These factors can be analyzed and incorporated into policy decisions using charts or graphs to visualize the potential impact of different policy options.
For more about Monetary authorities:
https://brainly.com/question/14882325
#SPJ11
On February 2, 2022, you bought a 2.21% coupon T-bond, whose quoted asked price is $99.78 per share. The last coupon payment date was August 16, 2021, and the next coupon payment is scheduled to be made on February 14, 2022. Using the ACCRINT() function, calculate the accrued interest that you must pay.
please show excel work and explain
This means that you must pay an additional $0.57 per share on top of the quoted asked price of $99.78 per share in order to account for the accrued interest between the last coupon payment and the settlement date.
How to calculate the accrued interestTo calculate the accrued interest on the T-bond you purchased, you can use the ACCRINT() function in Microsoft Excel.
This function calculates the amount of interest that has accrued on a security between the last coupon payment date and the settlement date.
To use this function, you will need to input the settlement date, maturity date, and the annual coupon rate. In this case, the settlement date is February 2, 2022, and the maturity date is February 15, 2027.
The annual coupon rate is 2.21%.
Using the formula =ACCRINT("2/2/2022","2/15/2027",0.0221,99.78,2), the accrued interest on your T-bond is calculated to be $0.57 per share.
Learn more about Accrued interest at
https://brainly.com/question/17236349
#SPJ11
What is section 85 rollover? How can this benefit a sole proprietorship while incorporating their business?
What are the types of income a CCPC can earn? Kindly explain how an active business income is taxed?
Section 85 rollover is a provision in the Canadian Income Tax Act that allows a business owner to transfer property to a corporation on a tax-deferred basis. This provision is particularly beneficial for sole proprietors who wish to incorporate their business as it allows them to transfer their business assets to the corporation without incurring any immediate tax liability.
With the Section 85 rollover, the sole proprietor can transfer property such as inventory, equipment, or other business assets to the corporation in exchange for shares of the corporation. The transfer is considered to be at the fair market value of the property, and any gain on the property is deferred until it is realized on a subsequent disposition of the shares.
Incorporating a business can offer several advantages over a sole proprietorship, such as limited liability, tax planning opportunities, and access to capital. The Section 85 rollover provision allows business owners to incorporate their business while minimizing their tax liability on the transfer of assets.
A Canadian Controlled Private Corporation (CCPC) can earn different types of income, including active business income, passive income, and capital gains. Active business income is income earned from a corporation's regular business operations, while passive income is income earned from investments or other non-operational activities. Capital gains are the profits realized from the sale of capital property, such as stocks or real estate.
Active business income earned by a CCPC is taxed at a lower rate compared to other types of income. The Federal tax rate on the first $500,000 of active business income is currently at 9%, while the provincial tax rates vary. In some provinces, the combined Federal and Provincial tax rate on active business income can be as low as 12%.
In addition to the lower tax rates, CCPCs can also benefit from several tax planning opportunities, such as the ability to claim the Small Business Deduction, allowing them to deduct a portion of their active business income from their taxable income. CCPCs may also be eligible for other tax credits and deductions, such as the Scientific Research and Experimental Development (SR&ED) Tax Credit and the Accelerated Capital Cost Allowance (ACCA).
In summary, the Section 85 rollover provision can be an advantageous tax planning tool for sole proprietors who wish to incorporate their business. CCPCs can earn different types of income, with active business income being taxed at a lower rate, and may be eligible for tax credits and deductions that can further reduce their tax liability.
Click the below link, to learn more about Income Tax Act:
https://brainly.com/question/515458
#SPJ11
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1.0 is 14.0%. According to the capital asset pricing model:
Required:
a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.)
b. What would be the expected return on a zero-beta stock?
Answer:
Explanation:
Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model:
a. What is the expected return on the market portfolio?
b. What would be the expected return on a zero-beta stock?
c. Suppose you consider buying a share of stock at a price of $40. The stock is expected to pay a dividend of $3 next year and to sell then for $41. The stock risk has been evaluated at β = - .5. Is the stock overpriced or underpriced?
The correct answer would be:
a. 12%
b. 4%
c. Underpriced
TRUE / FALSE 1. Intent to discriminate must be proven for a disparate impact case to be successful. 2. If the plaintiff proves their prima facie case under the McDonnell Douglas standard, the burden of proof shifts to the defendant to evidence a legitimate and nondiscriminatory reason for the discriminatory action. 3. them. Generally, regarding employment at-will, employees may be fired just because the boss doesn't like 4. An independent contractor is not considered an employee but is entitled to minimum wage and overtime protections. 5. One of the principal's duties is to keep an accounting during the agency relationship. 6. If an agent is acting within the scope of her employment, should she commit an intentional tort harming a third party the principal may be liable for the injuries sustained. The Social Security Act is funded through mandatory employment taxes paid by both the employer and employee. 8. The Fair Labor Standards Act does not cover all employees. 9. When an employee suffers a job related injury, the employee always has a choice of suing the employer in court or seeking workers' compensation. 10. Once an employee has established that she has a covered disability, the Americans with Disabilities Act requires that the employer make reasonable accommodations allowing the employee to perform the essential functions of the job.
1. FALSE. In a disparate impact case, intent to discriminate does not need to be proven, but rather the plaintiff must prove that a neutral policy or practice disproportionately affects a protected group.
2. TRUE. If the plaintiff proves their prima facie case, the burden of proof shifts to the defendant to provide evidence of a legitimate and nondiscriminatory reason for the action.
3. FALSE. Although employment at-will allows for termination without cause, employees cannot be fired for reasons that violate anti-discrimination laws.
4. TRUE. Independent contractors are not considered employees, but they are entitled to minimum wage and overtime protections under the Fair Labor Standards Act.
5. TRUE. One of the principal's duties in an agency relationship is to keep an accounting of the agent's actions.
6. TRUE. If an agent is acting within the scope of her employment and commits an intentional tort, the principal may be liable for the resulting injuries sustained by a third party.
7. TRUE. The Social Security Act is funded through mandatory employment taxes paid by both the employer and employee.
8. TRUE. The Fair Labor Standards Act does not cover all employees, but only those who meet certain criteria such as being non-exempt from overtime pay.
9. FALSE. When an employee suffers a job-related injury, the employee typically cannot sue the employer but instead must seek workers' compensation benefits.
10. TRUE. Once an employee establishes that they have a covered disability, the employer is required under the Americans with Disabilities Act to make reasonable accommodations allowing the employee to perform the essential functions of the job.
To know more about Labor Standards Act click on below link:
https://brainly.com/question/12300130#
#SPJ11
As the text reveals, the __________ (French/British) have a preference for top-loading washing machines, while the _____________ (French/British) prefer front-loaders forcing appliance makers to produce multiple models.
The British have a preference for top-loading washing machines, while the French prefer front-loaders, forcing appliance makers to produce multiple models. This difference in preference is influenced by cultural and market factors, where consumer habits and preferences vary between countries.
In the British market, top-loading washing machines are more commonly used and preferred, while in the French market, front-loaders are more popular. As a result, appliance manufacturers need to cater to these differing preferences by producing different types of washing machines to meet the demands of both markets. This illustrates how cultural and market dynamics can impact consumer preferences and product offerings in different regions.
learn more about Preference here:
https://brainly.com/question/27881780
#SPJ11
• Calculate WACC when cost of equity is 15%, and cost of debt is 5%, tax is 20%, and E/D=2 • Write the firm value with WACC method when the firm has the following cash flows, starting in year 0: Cash Flow -$100 $10 $20 $120 • (extra credit) What is the value of this firm if it extended its operations and will generate the $120 cash flow forever, starting year 4?
The WACC is calculated as follows:
WACC = (E/V) * Re + (D/V) * Rd * (1 - T)
Where:
Re = cost of equity = 15%
Rd = cost of debt = 5%
T = tax rate = 20%
E/D = 2
Plugging in the values, we get:
WACC = (2/3) * 15% + (1/3) * 5% * (1 - 20%) = 11.33%
Using the WACC method, the firm value can be calculated as the present value of the cash flows discounted at the WACC. The firm value is:
Firm value = -$100 / (1 + 11.33%)^0 + $10 / (1 + 11.33%)^1 + $20 / (1 + 11.33%)^2 + $120 / (1 + 11.33%)^3 = $86.38
The WACC is the weighted average of the cost of equity and cost of debt, taking into account the proportion of equity and debt in the firm's capital structure, and adjusted for the tax benefit of debt. In this case, the firm has a debt-to-equity ratio of 2:1, which means that for every $2 of debt, there is $1 of equity. Using the WACC formula, we calculate the WACC to be 11.33%.
To calculate the firm value using the WACC method, we discount each cash flow by the appropriate discount factor, which is calculated as 1 / (1 + WACC)^n, where n is the number of years from the present. We then sum up the present values of all cash flows to arrive at the firm value.
In the second part of the question, we assume that the firm will generate a perpetual cash flow of $120 starting from year 4. To calculate the firm value in this scenario, we can use the perpetuity formula, which is CF / r, where CF is the cash flow and r is the discount rate (which is the WACC in this case). Plugging in the values, we get:
Firm value = $120 / (11.33% - 0%) = $1,059.44
For more questions like Cash click the link below:
https://brainly.com/question/10714011
#SPJ11
a seller of a business agrees not to open another business establishment similar to that being sold for six months. such an agreement is called a:
A seller of a business agrees not to open another business establishment similar to that being sold for six months. Such an agreement is called a non-compete clause or a non-compete agreement.
A non-compete clause is a contract between an employer and an employee or between a seller and a buyer of a business that restricts the employee or seller from engaging in similar business activities that compete with the employer's or buyer's business for a certain period of time and within a specific geographic area.
Non-compete clauses are common in industries where employees or sellers have access to confidential information, trade secrets, or customer lists that can be used to benefit a competing business. Non-compete clauses are often used to protect a company's interests and to prevent employees or sellers from taking advantage of their knowledge and skills to compete with their former employer or buyer.
However, non-compete clauses are also controversial because they can restrict an individual's ability to work and to earn a living, and they can be difficult to enforce in some jurisdictions.
To know more about seller of a business, refer here:
https://brainly.com/question/31418209#
#SPJ11
A life insurance company requires $100,000 to provide a guaranteed annuity of $7,500 per year for 20 years, with the first payment in one year. What is the rate of return on this annuity? A. 3.22% B. 2.22% C. 5.22% D. 4.22%
A life insurance company requires $100,000 to provide a guaranteed annuity of $7,500 per year for 20 years, with the first payment in one year. The rate of return on this annuit is B. 2.22%
To determine the rate of return on the annuity provided by the life insurance company, we can use the Present Value of Annuity (PVA) formula: PVA = PMT * [(1 - (1 + r)^-n) / r], where PMT is the annuity payment ($7,500), n is the number of years (20), and r is the rate of return we need to find. The life insurance company requires $100,000 for this annuity, so PVA = $100,000.
Rearranging the formula, we get: r = [PMT / PVA - (1 - (1 + r)^-n)]. Plugging in the values, we have: r = [$7,500 / $100,000 - (1 - (1 + r)^-20)].
After solving for r, we find that the rate of return is approximately 2.22%. This means that the life insurance company's annuity offers a 2.22% annual return on the investment of $100,000, providing a guaranteed payment of $7,500 per year for 20 years. A life insurance company requires $100,000 to provide a guaranteed annuity of $7,500 per year for 20 years, with the first payment in one year. The rate of return on this annuit is B. 2.22%
Learn more about investment at:
https://brainly.com/question/30105963
#SPJ11
QUESTION 1 The modern digital revolution, brought about by ubiquitous internet connectivity and widespread use of mobile phones, has created enormous opportunities for payment systems to grow. One example is the emergence of sophisticated advanced payment apps, such as e-wallets implemented on consumer cell phones, facilitated by the growth of flexible payment providers that try to suggest more incentives to retailers and consumers than banks previously did. The ewallet is a transaction structure in which an internet programme or service allows clients to manage data related to acquisitions, affiliation, loyalty, and finance information in a centralised location.
REQUIRED: Illustrate the challenges and prospects of using e-wallets in Malaysia, and what it means for businesses and customers. Discuss the strategies to leverage the strengths and opportunities as well as overcome the weaknesses and threats.
Answer:
E-wallets offer significant opportunities for businesses and customers in Malaysia, but they also present challenges that need to be addressed. By leveraging the strengths of e-wallets and adopting the strategies outlined above, businesses and customers can maximize the benefits of this emerging payment technology.
Explanation:
The emergence of e-wallets in Malaysia has brought about numerous opportunities and challenges for businesses and customers. On the one hand, e-wallets have the potential to revolutionize the way payments are made and to enhance financial inclusion. On the other hand, they present significant challenges, such as security concerns and limited access to technology among some segments of the population.
Prospects of e-wallets in Malaysia:
Convenience: E-wallets provide users with a convenient way of making payments. Customers can simply use their mobile phones to make transactions, eliminating the need for cash or credit cards.
Increased financial inclusion: E-wallets can help to increase financial inclusion by providing access to financial services to those who may not have a bank account or credit history.
Improved security: E-wallets are often more secure than traditional payment methods such as cash and credit cards. They can include features like two-factor authentication and biometric verification.
Cost savings: E-wallets can save businesses money by reducing the costs associated with cash handling and credit card processing fees.
Challenges of e-wallets in Malaysia:
Security concerns: E-wallets can be vulnerable to fraud and hacking, which can result in financial losses for both businesses and customers.
Limited access to technology: Not all segments of the population have access to smartphones or the internet, which limits the adoption of e-wallets.
Lack of interoperability: Different e-wallet providers may not be compatible with each other, making it difficult for customers to use multiple e-wallets.
Regulatory issues: E-wallets are subject to regulations from multiple government agencies, which can create complexity and uncertainty for businesses.
Strategies to leverage the strengths and opportunities of e-wallets:
Build trust and security: E-wallet providers should prioritize building trust and security by implementing strong authentication and fraud prevention measures.
Focus on customer education: E-wallet providers should educate customers on how to use their services safely and securely.
Increase interoperability: E-wallet providers should work towards interoperability between different e-wallet providers to make it easier for customers to use multiple e-wallets.
Collaborate with regulators: E-wallet providers should collaborate with regulators to ensure compliance with regulatory requirements and to advocate for regulatory clarity.
Offer incentives: E-wallet providers should offer incentives to customers to encourage adoption and usage of their services, such as cashback and loyalty programs.
For more such questions on payment, click on:
https://brainly.com/question/25898631
#SPJ11
an organization's production server recently crashed right after they completed installing a security patch. to minimize the probability of this happening again, what should the organization do? the organization should thoroughly test the patch before sending it into the production environment the organization should apply the patch according to the vendor's patch release notes the organization should ensure that there is a good change management process in place the organization should approve the patch only after doing a proper risk assessment
When an organization's production server crashes after installing a security patch, it can be a frustrating and costly experience.
How to prevent the crash in organization's productionTo prevent this from happening again, the organization needs to take a few steps.
First, they should thoroughly test the patch before sending it into the production environment. This will help identify any potential issues before they cause any harm.
Secondly, they should apply the patch according to the vendor's patch release notes. This will ensure that the patch is being applied correctly and that it's compatible with the current system.
Thirdly, the organization should ensure that there is a good change management process in place. This will help ensure that all changes are properly documented and approved before implementation.
Finally, the organization should approve the patch only after doing a proper risk assessment. This will help identify any potential risks and allow the organization to take necessary precautions. By taking these steps, the organization can minimize the probability of another security patch-related crash.
Learn more about organization at
https://brainly.com/question/31060495
#SPJ11
Copy and paste the following data into Excel: P Q $137.00 10135 $124.67 10347 $119.19 10884 $116.45 11480 $115.08 11766 $112.34 12378 $106.86 12571 $102.75 12801 a. Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P).
b. Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination.
c. What is the point price elasticity of demand when P=$119.19? What is the point price elasticity of demand when P=$107.50? d. To maximize total revenue, what would you recommend if the company was currently charging P=$116.45? If it was charging P=$107.50? e. Use your first demand function to determine an equation for TR and MR as a function of Q, and display a graph of P and MR on the vertical and Q on the horizontal axis. f. What is the total-revenue maximizing price and quantity, and how much revenue is earned there? (Round your price to the nearest cent, your quantity to the nearest whole unit, and your TR to the nearest dollar.) Compare that to the TR when P = $119.19 and P = $107.50.
Demand function represents the relationship between the quantity of a good or service that consumers are willing and able to purchase and the various factors that influence their purchasing decisions.
Here are the steps to do it and also the steps for ascertaining further answers.
a. To determine the demand function as P = f(Q), we can use Ordinary Least Squares (OLS) regression analysis in Excel.
Here's how to do it:
1. Enter the given data into two columns in Excel, with P in column A and Q in column B.
2. Select the data in both columns, including the column headers.
3. Go to the "Data" tab in Excel and click on "Data Analysis" in the "Analysis" group.
4. Choose "Regression" from the list of analysis tools and click "OK".
5. In the Regression dialog box, select column A as the "Y Range" (dependent variable) and column B as the "X Range" (independent variable).
6. Make sure the "Labels" box is checked if your data has column headers.
7. Click on "Add-Ins" and check the "Residuals" and "Line Fit Plots" options if you want additional output.
8. Click "OK" to run the regression analysis.
The output of the regression analysis will provide the estimated coefficients of the demand function, including the intercept and the slope. Based on the regression results, you can assess the statistical significance of the estimated equation and the confidence you have in it. Higher R-squared value and lower p-values for the coefficients indicate a better fit of the estimated equation to the data and higher confidence in the results.
To invert the demand function to Q = f(P), we can rearrange the estimated demand equation in terms of Q as the dependent variable and P as the independent variable.
b. To calculate the point-price elasticity for each (P,Q) combination, we can use calculus to determine dQ/dP, which represents the derivative of quantity with respect to price. The point-price elasticity is then calculated as dQ/dP multiplied by P/Q, where P is the price and Q is the quantity.
c. To calculate the point price elasticity of demand when P=$119.19 and P=$107.50, we can use the previously determined derivative dQ/dP and plug in the corresponding values of P and Q from the given data.
d. To maximize total revenue, we can use the concept of elasticity. If the demand is elastic, a decrease in price will result in a more than proportionate increase in quantity demanded, leading to an increase in total revenue. If the demand is inelastic, a decrease in price will result in a less than proportionate increase in quantity demanded, leading to a decrease in total revenue.
Based on the calculated elasticity and the given prices, we can recommend a price adjustment that would maximize total revenue for the company.
e. To determine the equations for total revenue (TR) and marginal revenue (MR) as a function of Q using the demand function, we can plug in the previously calculated demand equation into the formulas for TR and MR. TR is calculated as P multiplied by Q, and MR is calculated as the derivative of TR with respect to Q.
Once we have the equations for TR and MR, we can plot them on a graph with Q on the horizontal axis and P and MR on the vertical axis.
f. To find the total-revenue maximizing price and quantity, we can use the formulas for TR and MR, and find the quantity at which MR is equal to zero. This is the point of maximum total revenue. We can then plug this quantity back into the demand function to find the corresponding price.
We can also compare the total revenue earned at this point with the total revenue at the given prices of $119.19 and $107.50 to assess the impact of price changes on total revenue.
To know more about OLS regression analysis visit:
https://brainly.com/question/28298210
#SPJ11
Salwid-Mort, a mortgage broker, has hired you to develop a spreadsheet they will use with their clients. They’ve noticed that thirty-year loans with an interest offset facility are popular with their clients. They want a spreadsheet that demonstrates some of the characteristics of this type of loan to their clients. Broadly, they’d like to show their clients a graph with three curves on it: one, the declining outstanding balance of a traditional principle and interest loan, two, as above, but with an interest offset facility, tracking fortnightly savings of $1000, and three, as above, but the client gives a fortnightly savings amount greater than $1 000. To achieve these objectives, you have been asked to develop the following. Develop a spreadsheet with at least two sheets. One sheet, titled ‘Inputs’ consists of the following.
1. The Salwid-Mort logo 2. CY21, the Australian 10-year government bond yield for calendar year 2021 (i.e., the 10-year government bond yield on 31 December 2021, a j2 rate)* 3. The rate of interest for the 30-year mortgage, given by 130 basispoints over CY21 4. The initial loan amount, $1 000 000 5. The fortnightly cash deposit amount of $1 000 6. A second, higher (than $1 000), fortnightly cash deposit amount. One sheet, titled ‘Graphs’ consists of the following a line graph, with three curves. The curves are as follows. 1. The outstanding balance of the loan, with no offset (i.e., a traditional principle and interest loan). 2. The outstanding balance of the loan with an offset facility (described below) generated by saving $1 000 a fortnight. 3. The outstanding balance of the loan with an offset facility generated by saving more than $1 000 a fortnight. * [15 marks] The axes should be labelled: ‘Loan balance’ (vertical axis) and ’Time elapsed’ (horizontal axis, in years). The graph should include a legend, indicating which curve is which. In doing your calculations, note the following. 1. Treat the loan as running for 24 fortnightly (evenly spaced) periods each year over 30 years. 2. Deposits to the savings account are made at the end of each fortnightly period. They can be either $1 000 or a higher amount. 3. The initial balance of the savings account is zero. 4. The savings account earns compound interest at an effective annual rate equivalent to the mortgage rate (given above). 5. The interest offset facility is modelled as follows: the interest earnings at the end of each fortnight are credited towards the loan—and so the savings account no longer accumulates with interest. 6. The loan starts with an outstanding balance of $1 000 000. Interest is charged at the end of each fortnight, when a loan repayment is also made. The repayment is at a level to extinguish the loan after thirty years at the given mortgage rate (ignoring any interest offset facility). 7. If the interest offset facility is operating, then, at the end of each fort- night, the interest from the savings account is credited towards the loan.
The spreadsheet will provide Salwid-Mort's clients with a visual representation of the benefits of using an interest offset facility, as well as the impact of different fortnightly savings amounts on the outstanding balance of the loan over time.
How did we arrive at this assertion?To create the said spreadsheet, we will need two sheets. The first sheet will be called "Inputs," and it will contain all of the necessary inputs for the calculation. The second sheet will be called "Graphs," and it will contain the graph with the three curves.
In the Inputs sheet, we will include the Salwid-Mort logo, followed by the necessary inputs:
CY21, the Australian 10-year government bond yield for calendar year 2021 (i.e., the 10-year government bond yield on 31 December 2021, a j2 rate)*The rate of interest for the 30-year mortgage, given by 130 basis points over CY21The initial loan amount, $1,000,000The fortnightly cash deposit amount of $1,000A second, higher (than $1,000), fortnightly cash deposit amount.*Note: We will assume that the CY21 value has been provided to us and will not be calculated in this spreadsheet.
In the Graphs sheet, we will create a line graph with three curves. The curves will represent:
The outstanding balance of the loan, with no offset (i.e., a traditional principal and interest loan).The outstanding balance of the loan with an offset facility generated by saving $1,000 a fortnight.The outstanding balance of the loan with an offset facility generated by saving more than $1,000 a fortnight.The vertical axis will be labeled "Loan balance," and the horizontal axis will be labeled "Time elapsed" (in years). The graph will include a legend, indicating which curve is which.To calculate the outstanding balance of the loan, we will use the following formula:
Outstanding balance = Initial loan amount * ((1 + r/2)^n - (1 + r/2)^p) / ((1 + r/2)^n - 1)
where:
r is the interest rate for the 30-year mortgage, given by 130 basis points over CY21
n is the total number of fortnights over 30 years (24 fortnightly periods each year over 30 years)
p is the number of fortnights elapsed
The fortnightly cash deposit amount will be added to the savings account at the end of each fortnight
The savings account earns compound interest at an effective annual rate equivalent to the mortgage rate
If the interest offset facility is operating, then, at the end of each fortnight, the interest from the savings account is credited towards the loan
We will use the PMT function in Excel to calculate the loan repayment required to extinguish the loan after thirty years at the given mortgage rate (ignoring any interest offset facility).
Once we have calculated the outstanding balance of the loan for each curve, we can plot the three curves on the graph in the Graphs sheet.
Overall, the spreadsheet will provide Salwid-Mort's clients with a visual representation of the benefits of using an interest offset facility, as well as the impact of different fortnightly savings amounts on the outstanding balance of the loan over time.
learn more about spreadsheet: https://brainly.com/question/4965119
#SPJ1
Larry the Cucumber has been offered $14 million to star in the lead role of the next three Larry Boy adventure movies. If Larry takes this offer, he will have to forgo acting in other Veggie movies that would pay him $5 million at the end of each of the next three years. Assume Larry's personal cost of capital is 10% per year.
Explain why the NPV decision rule might provide Larry with a different decision outcome than the IRR rule when evaluating Larry's three movie deal offer.
Okay, here are the steps to evaluate this decision using NPV vs IRR for Larry the Cucumber:
NPV (Net Present Value) approach:
* Larry's $14 million offer for the next 3 Larry Boy movies has a present value of $14 / (1.1)^3 = $10.9 million (using 10% discount rate)
* The $5 million per year for 3 years from other movie roles has a present value of $5 * (1 + 0.1)^3 = $15 million
So the NPV of taking the $14 million 3-movie deal is $10.9 million, while passing it up for the $5 million per year roles has an NPV of $15 million. Hence, NPV favors passing up the $14 million offer.
IRR (Internal Rate of Return) approach:
* The $14 million 3-movie deal generates $14 million in total cash flows over 3 years.
* The $5 million per year for 3 years generates $15 million in total cash flows.
To calculate IRR, we set the present value of cash flows equal to the initial investment amount:
$14 million / (1 + IRR)^3 = $10.9 million
IRR = 34.8%
$15 million / (1 + IRR)^3 = $0
IRR = 20%
So the IRR of the $14 million 3-movie deal is 34.8% which is higher than the 20% IRR of the $5 million per year roles.
Hence, IRR favors taking the $14 million 3-movie deal offer.
In summary, NPV recommends passing up the offer while IRR recommends taking the offer, giving different decisions due to judging the offer based on either present value or internal return. Let me know if you need more details!
assuming interest rates are positive, it is impossible for the present value of a given lump sum to exceed its future value of the same series. True or false?
The statement "assuming interest rates are positive, it is impossible for the present value of a given lump sum to exceed its future value of the same series" is true. Because lump sum will increase over time by earning interests.
When interest rates are positive, the present value of a lump sum will always be less than its future value. This is because the lump sum will earn interest over time, causing its value to increase in the future. The relationship between present value, future value, interest rate, and time can be expressed using the present value formula:
Present Value = Future Value / (1 + Interest Rate)ⁿ
where n represents the number of periods.
As interest rates are positive, the denominator (1 + Interest Rate) ⁿ will always be greater than 1, resulting in a present value that is less than the future value.
Thus, the given statement is true.
Read more about "Interest rate": https://brainly.com/question/29451175
#SPJ11
A temporary insurance policy that is typically issued when one applies for insurance is called a(n) a. ?insuring agreement. b. ?endorsement. c. ?binder. d. ?rider.
A temporary insurance policy that is typically issued when one applies for insurance is called a binder, option c.
An insurance binder provides temporary proof of insurance coverage until the full insurance policy is issued. This allows the insured to have coverage during the time it takes for the insurer to process and finalize the insurance policy.
Temporary insurance is inclusion that you might get when you apply for a particular sort of life coverage like term extra security. It can be a great way to get quick, instant coverage, especially while you wait for the results of your insurance application.
To learn more about insurance policy: https://brainly.com/question/25855858
#SPJ11
The temporary insurance policy that is typically issued when one applies for insurance is called a binder. It serves as a temporary agreement between the insurance company and the policyholder until a formal insurance policy can be issued.
The temporary insurance policy that is typically issued when one applies for insurance is called a "binder". A binder is a temporary agreement that provides immediate coverage until the actual insurance policy is issued. It is usually valid for a short period, such as 30 or 60 days, and provides proof of insurance until the formal policy documents can be prepared and signed. Once the policy is issued, the binder is no longer in effect, and the policy terms and conditions take over. Binders are commonly used in situations where time is of the essence, such as when buying a new car or purchasing a home.
Learn more about purchasing here:
https://brainly.com/question/24112214
#SPJ11
Assume that the equilibrium real federal funds rate is 2% and the target for inflation is 1.0%. Suppose that the inflation rate is at 4.0%, leading to an inflation gap of 3.0% (equal to 4.0%minus1.0%), and real GDP is 1.0% above its potential, resulting in a positive output gap of 1.0%.
The Taylor rule suggests that the federal funds rate should be set at:
A.6.00%.
B.9.00%.
C.8.00%.
D.4.00%.
The Taylor rule suggests that the federal funds rate should be set at 8.00%. The correct answer is option c.
The Taylor rule is an economic formula that suggests the appropriate target federal funds rate based on the inflation gap and the output gap. The formula is:
Target federal funds rate = equilibrium real federal funds rate + current inflation rate + (0.5 x inflation gap) + (0.5 x output gap)
Using the given values:
Equilibrium real federal funds rate = 2%
Current inflation rate = 4%
Inflation gap = 4% - 1% = 3%
Output gap = 1%
Plugging these values into the Taylor rule formula, we get:
Target federal funds rate = 2% + 4% + (0.5 x 3%) + (0.5 x 1%) = 8%
Therefore, the answer is C. 8.00%. According to the Taylor rule, the federal funds rate should be set at 8.00% in order to close the inflation gap and output gap and achieve the target inflation rate of 1.0%.
To know more about Taylor rule refer to-
https://brainly.com/question/29554978
#SPJ11
monahegan plasma company is facing a performance downturn and realizes that a major rethinking of its strategy is in order. under these circumstances, monahegan plasma would benefit from a(n):
Monahegan Plasma would benefit from a strategic management process to identify and address the causes of its performance downturn.
A strategic management process involves analyzing the company's internal and external environment to identify strengths, weaknesses, opportunities, and threats. This information is used to develop a new strategy and plan of action to achieve the company's goals.
By going through this process, Monahegan Plasma can identify the root causes of its performance downturn and develop a new strategy that aligns with its strengths and takes advantage of opportunities in the market. This can help the company to turn its performance around and achieve sustainable growth in the future.
For more questions like Management click the link below:
https://brainly.com/question/11599959
#SPJ11
Suppose a five-year $1000 bond with annual coupons has a price of $900 and a yield to maturity of 6%. What is the Bonds coupon rate?
Answer:
We can use the present value formula to solve for the coupon rate of the bond:
PV = C / (1 + r)^1 + C / (1 + r)^2 + ... + C / (1 + r)^5 + FV / (1 + r)^5
where PV is the current price of the bond, C is the annual coupon payment, r is the yield to maturity, and FV is the face value of the bond.
Plugging in the given values:
PV = $900
C = ?
FV = $1,000
r = 6%
n = 5
Solving for C, we get:
PV = C / (1 + r)^1 + C / (1 + r)^2 + ... + C / (1 + r)^5 + FV / (1 + r)^5
$900 = C / (1 + 0.06)^1 + C / (1 + 0.06)^2 + C / (1 + 0.06)^3 + C / (1 + 0.06)^4 + C / (1 + 0.06)^5 + $1,000 / (1 + 0.06)^5
$900 = $60 / (1 + 0.06)^1 + $60 / (1 + 0.06)^2 + $60 / (1 + 0.06)^3 + $60 / (1 + 0.06)^4 + $60 / (1 + 0.06)^5 + $1,000 / (1 + 0.06)^5
$900 = $56.60 + $53.40 + $50.37 + $47.59 + $45.03 + $747.26
$900 = $1,000.25C / (1 + 0.06)^5
$900 x (1 + 0.06)^5 / $1,000.25 = C
$900 x 1.33823 / $1,000.25 = C
C = $1.20
Therefore, the coupon rate of the bond is $1.20 / $1000 = 0.12 or 12%.
u.s. tax law is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities. tax legislation is combined into a single section of the federal statutory law commonly referred to as:
The tax legislation is combined into a single section of the federal statutory law commonly referred to as the Internal Revenue Code.
This code outlines the regulations and guidelines for the administration and enforcement of the U.S. tax law, which is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities.
U.S. tax law is designed to raise revenues for the operations of the federal government and to promote certain socially desirable real estate-related activities. Tax legislation is combined into a single section of the federal statutory law commonly referred to as the Internal Revenue Code (IRC).
For more such questions on tax
https://brainly.com/question/28798067
#SPJ11
How bid- ask spreads are determined? What are the components of
the bid-ask spread?
Bid-ask spreads are determined by market factors such as supply and demand, liquidity, and trading volume.The components of the spread include the bid price, the ask price, and the difference between the two, which is the spread.
A larger spread is usually indicative of lower liquidity and higher volatility in the market. The bid price represents the highest price a buyer is willing to pay for a security, while the ask price represents the lowest price a seller is willing to accept.
Market makers and other intermediaries may also play a role in determining bid-ask spreads by adjusting their quotes based on market conditions and their own risk management strategies. Overall, bid-ask spreads can be influenced by a variety of factors and can have a significant impact on the profitability of trades.
For more such questions on components, click on:
https://brainly.com/question/31114449
#SPJ11
laura has to give a presentation to senior nursing staff at a nursing home. the topic of the presentation is new patient-care products laura's company is introducing. she has the opportunity to talk with the executive director of the nursing home before she starts her presentation. which set of questions is the most useful in helping laura to make appropriate decisions about her presentation?
The MOST useful set of questions for Laura's presentation would be option A: "Are all of your senior nurses native English speakers? How comfortable would they be with an interactive presentation? Is there any terminology I should be aware of to avoid giving offense? ".
This is because it addresses language barriers, presentation style, and potential cultural sensitivity issues that could affect the audience's reception of the presentation. These questions are important because they help Laura tailor her presentation to the audience's needs, ensuring effective communication and engagement.
The question about native English speakers and presentation style will allow Laura to adjust her language and approach to ensure that the audience can understand and follow her presentation.
The question about cultural sensitivity shows that Laura is aware of the potential for offense and shows respect for the audience's culture. Overall, these questions show that Laura is focused on delivering an effective presentation and is willing to take steps to ensure it is well-received by the audience.
Option A holds true.
Learn more about presentation skills: https://brainly.com/question/29547846
#SPJ11
if the spot price of gold is $990 per troy ounce, the risk-free interest rate is 6%, and storage and insurance costs are zero, what should be the forward price of gold for delivery in one year?
The forward price of gold for delivery in one year, assuming zero storage and insurance costs, is $1,049.40 per troy ounce.
To calculate the forward price of gold for delivery in one year, we need to consider the cost of carry. Cost of carry is the cost of holding an asset, which includes storage, insurance, and financing costs.
In this case, we are assuming that storage and insurance costs are zero, so we only need to consider the financing cost, which is the risk-free interest rate of 6%.
The formula for calculating the forward price of an asset is:
Forward price = Spot price x (1 + financing cost)^time
In this case, time is one year, so we can plug in the numbers:
Forward price = $990 x (1 + 0.06)^1
Forward price = $1,049.40
Learn More about insurance here :-
https://brainly.com/question/27822778
#SPJ11
which of the following are questions that managers are likely to ask when beginning the strategic management process? multiple select question. is our vision product- or customer-oriented? how can we achieve our goals? what is our profit? what do we ultimately hope to achieve? what are our values?
Managers are likely to ask the following questions when beginning the strategic management process: How can we achieve our goals? What do we ultimately hope to achieve? What are our values? Is our vision product- or customer-oriented?
When beginning the strategic management process, managers typically ask themselves a series of questions to guide the development of the organization's strategic plan. These questions are designed to help the management team clarify the company's goals, values, and competitive positioning in the market.
The question "How can we achieve our goals?" is focused on identifying the actions and strategies that will help the company accomplish its objectives. "What do we ultimately hope to achieve?" is a question that helps the management team define the company's long-term vision and mission. "What are our values?" is a question that helps the management team identify the principles and beliefs that guide the organization's culture and decision-making.
Finally, "Is our vision product- or customer-oriented?" is a question that helps the management team understand the company's competitive positioning in the market and whether it is focused on meeting the needs of its customers or developing innovative products.
Learn more about strategic management at:
brainly.com/question/28267841
#SPJ4
g two years ago, phutki corp. issued a $1,000 par value, 11 percent (annual payment) coupon bond. at the time the bond was issued it had 15 years to maturity. currently this bond is selling for $1,000 in the bond market. phutki corp. is now planning to issue a $1,000 par value bond with a coupon rate of 9 percent (semi annual payments) that will mature 25 years from today. assuming that the riskiness of the new bond is the same as the previous bond (i.e., the ytm on the new bond is equal to the current ytm on the previous bond), how much will investor's pay for this new bond?
The investors will pay $835.48 for the new bond with a coupon rate of 9% and a maturity of 25 years, assuming the riskiness is the same as the previous bond.
To calculate the price investors will pay for the new bond, we first need to determine the current yield to maturity (YTM) on the previous bond. We can use the information given to calculate this:
- The bond has a $1,000 par value and a coupon rate of 11%, which means the annual interest payment is $110 ($1,000 x 0.11).
- The bond has 15 years to maturity.
Using a financial calculator or spreadsheet, we can find that the current YTM on the bond is 11%.
Now we can use this YTM to calculate the price investors will pay for the new bond:
- The new bond has a $1,000 par value and a coupon rate of 9%, which means the semi-annual interest payment is $45 ($1,000 x 0.09 / 2).
- The new bond will mature in 25 years.
Using a financial calculator or spreadsheet, we can find that the YTM on the new bond is also 11%.
With this information, we can use the bond pricing formula to calculate the price investors will pay for the new bond:
Price = (Coupon Payment / (1 + YTM/2)^n) + (Par Value / (1 + YTM/2)^n)
Where:
- Coupon Payment = $45
- YTM = 11%
- n = 50 (25 years x 2 semi-annual periods per year)
- Par Value = $1,000
Plugging in these values, we get:
Price = ($45 / (1 + 0.11/2)^50) + ($1,000 / (1 + 0.11/2)^50)
Price = $496.61 + $338.87
Price = $835.48
Therefore, investors will pay $835.48 for the new bond with a coupon rate of 9% and a maturity of 25 years, assuming the riskiness is the same as the previous bond.
to know more about investors refer here
https://brainly.com/question/30828591#
#SPJ11
Due to the integrated nature of their capital markets, investors in both the U.S. and U.K. require the same real interest rate, 2.5%, on their lending. There is a consensus in capital markets that the annual inflation rate is likely to be 3% in the U.S. and 2% in the U.K. for next year. The spot exchange rate is currently E$/£ = 1.4.
a. Compute the nominal interest rate per annum in both the U.S. and U.K., assuming that the Fisher effect holds.
b. Using relative PPP, what is the expected future spot dollar-pound exchange rate in one year from now?
c. Using UIP, what is the expected spot dollar-pound exchange rate in one year from now?
The expected spot dollar-pound exchange rate in one year from now will be,
a. The nominal interest rate per annum in the U.S. is 5.5% (2.5% + 3%) and the nominal interest rate in the U.K. is 4.5% (2.5% + 2%).
b. Using the relative PPP, the expected future spot dollar-pound exchange rate in one year from now is E$/£ = 1.4(1.03/1.02) = 1.4148.
c. Using UIP, the expected spot dollar-pound exchange rate in one year from now would be E$/£ = 1.4(1.025/1.025) = 1.4. The UIP states that expected future spot exchange rates should equal the current spot exchange rate.
This means that the expected spot dollar-pound exchange rate should remain the same as the current rate.
Know more about nominal interest rate here
https://brainly.com/question/13324776#
#SPJ11
You have a saving plan. Under that plan, you will deposit $500 in a savings account with 12% (APR) at the end of every month. If you deposit that monthly amount for 10 years, how much your total saving will be at the end of the 10th year?
Your total savings at the end of the 10th year will be $121,962.62.
You have a saving plan in which you deposit $500 every month in a savings account with a 12% APR. To calculate the total savings at the end of 10 years, we need to use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r)^nt - 1] / r
Where:
FV = future value
P = periodic deposit amount ($500)
r = interest rate per period (12%/12 months = 1% = 0.01)
n = number of times the interest is compounded per year (12 times for monthly deposits)
t = number of years (10)
Plugging in the values, we get:
FV = 500 * [(1 + 0.01)¹²ˣ¹⁰ - 1] / 0.01
FV = 500 * [(1.01)¹²⁰ - 1] / 0.01
FV = 500 * 3.43924343 / 0.01
FV = 121,962.62
Therefore, your total savings at the end of the 10th year will be $121,962.62.
To know more about interest rate click on below link:
https://brainly.com/question/13324776#
#SPJ11
Censors working on behalf of the government have banned violent action films, citing the impact they have on social behaviours of viewer of these films. What is likely to happen to the supply and demand curves of these films?
A. The supply curve and the demand curve will both shift left, with the demand curve moving by more than the supply curve B. The supply curve and the demand curve will both shift left, with the demand curve moving by less than the supply curve C. The supply curve and the demand curve will both shift right, with the demand curve moving by more than the supply curve D. The supply curve and the demand curve will both shift right, with the demand curve moving by less than the supply curve [1.5)
B. The supply curve and the demand curve will both shift left, with the demand curve moving by less than the supply curve.
Explanation:
When the government bans violent action films, the supply of these films will decrease, causing the supply curve to shift to the left. At the same time, some viewers who are influenced by the government's stance may reduce their consumption of these films, causing a decrease in demand as well. However, the decrease in demand is likely to be less than the decrease in supply, since there will still be viewers who want to watch these films despite the ban. Thus, the demand curve will also shift to the left, but by a smaller degree than the supply curve.
To know more about the supply curve:
https://brainly.com/question/9228571
#SPJ11
revenues from dining services and athletic programs are examples of auxiliary enterprises revenues for a college or university. group of answer choices true false
Revenues from dining services and athletic programs are examples of auxiliary enterprises revenues for a college or university. The correct answer choice is true.
Auxiliary enterprises are self-supporting entities within a college or university that provide non-instructional services to students, faculty, and staff. These services are typically not directly related to the institution's core educational mission but are essential to support the functioning of the campus community.
Examples of auxiliary enterprises revenues include revenues from dining services, athletic programs, parking facilities, bookstore sales, and student housing. These sources of revenue help to fund the operation and maintenance of the auxiliary services, ensuring that they continue to meet the needs of the campus community.
In summary, auxiliary enterprises revenues for a college or university, such as revenues from dining services and athletic programs, are essential in supporting the non-instructional services that enhance campus life and contribute to the overall experience for students, faculty, and staff.
This statement is true, as these revenues play a crucial role in sustaining the campus infrastructure and providing valuable resources and services to the community.
To know more about auxiliary enterprises refer here
brainly.com/question/28274285#
#SPJ11