The budgeted cash collections in June would be $366,800.
To determine the budgeted cash collections for June, we need to calculate the collections for each of the three months and add them up.
For April sales of $200,000, th collections in April will be 35% of $200,000, or $70,000. The collections in May will be 61% of $200,000, or $122,000. The collections in June will be 4% of $200,000, or $8,000. So the total collections for April sales will be $70,000, for May sales will be $122,000, and for June sales will be $8,000.
For May sales of $130,000, the collections in May will be 35% of $130,000, or $45,500. The collections in June will be 61% of $130,000, or $79,300. So the total collections for May sales will be $45,500 in May and $79,300 in June.
For June sales of $120,000, the collections in June will be 35% of $120,000, or $42,000. So the total collections for June sales will be $42,000.
Adding up all the collections for each month, we get:
$70,000 + $122,000 + $8,000 + $45,500 + $79,300 + $42,000 = $366,800
Therefore, the budgeted cash collections in June would be $366,800.
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A new three-year CMO has two tranches. The 'A' tranche has a principal of $28.9 million with an annual.coupon of 3.25%. The 'Z' tranche has a coupon of 5.21% with a principal of $34.7 million. The mortgages backing the security issue have a fixed rate of 6.17% with a maturity of three years. All payments are made and compounded annually at the end of the year. The issue will be over-collateralized with $4.7 million of equity. Priority payments made to the 'A' tranche will consist of A's promised coupon, all mortgage pool amortization, and any interest accrued to the "Z' tranche. Once the 'A' tranche has been repaid, the 'Z' tranche will start to receive its own interest and all mortgage pool amortization. The equity class will only get residual cash flows. How much total cash flow will be received by the 'A' tranche in year 1 of the CMO? $21.75 million $22.35 million $22.96 million $23.56 million $24.17 million Previous Page Next Page Page 12 of 25
The total cash is $12.37945 million.
How to find the total cash flow?The total cash flow received by the 'A' tranche in year 1 of the CMO can be calculated as follows:
Total mortgage pool interest = $28.9 million * 3.25% = $0.93825 million
Total interest payable to 'Z' tranche = $34.7 million * 5.21% = $1.80787 million
Total interest available to 'A' tranche = $0.93825 million + $1.80787 million = $2.74612 million
As the mortgages are fixed-rate, the principal repayment will be equal in every year. Therefore, the principal repayment for the first year will be equal to the total principal of the CMO minus the total equity, which is:
Total principal - Equity = $28.9 million + $34.7 million - $4.7 million = $58.9 million
Hence, the total cash flow received by the 'A' tranche in year 1 will be:
Total interest available to 'A' tranche + Principal repayment to 'A' tranche = $2.74612 million + ($28.9 million / 3) = $2.74612 million + $9.63333 million = $12.37945 million
Therefore, the answer is $12.37945 million.
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The common stock of NCP paid 1.32 in dividends last year. Dividends are expected to grow at an 8% annual rate for an indefinite number of years.
a. If NCP's current market price is $23.50 per share, what is the stock's expected rate of return?
b. If your required rate of return is 10.5 %, what is the value of the stock for that investor?
c. Should you make the investment?
Given that your required rate of return is 10.5% and the stock value ($57.024) is higher than the current market price ($23.50), it is clear that the stock is undervalued and would be a wise investment.
We'll be using the Dividend Discount Model (DDM) to solve the problem.
a. To calculate the stock's expected rate of return, we'll use the following formula:
Expected Rate of Return = (Dividend1 / Current Market Price) + Dividend growth rate
First, we need to find Dividend1, which is the dividend for the next year. We have:
Dividend0 = $1.32 (last year's dividend)
Dividend Growth Rate = 8%
Dividend1 = Dividend0 * (1 + Dividend Growth Rate)
Dividend1 = $1.32 * (1 + 0.08)
Dividend1 = $1.4256
Now, we can calculate the expected rate of return:
Expected Rate of Return = ($1.4256 / $23.50) + 0.08
Expected Rate of Return = 0.06066 + 0.08
Expected Rate of Return = 0.14066 or 14.066%
b. To find the value of the stock for an investor with a required rate of return of 10.5%, we'll use the DDM formula:
Stock Value = Dividend1 / (Required Rate of Return - Dividend Growth Rate)
Stock Value = $1.4256 / (0.105 - 0.08)
Stock Value = $1.4256 / 0.025
Stock Value = $57.024
c. To determine if you should make the investment, compare the stock value with the current market price. In this case:
Stock Value = $57.024
Current Market Price = $23.50
Since the stock value ($57.024) is greater than the current market price ($23.50), it indicates that the stock is undervalued, and it would be a good investment based on your required rate of return of 10.5%.
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the future value of an ordinary annuity table is used when calculating multiple choice question. the present value of a series of payments. the present value of a single amount. the future value of a series of payments.
The future value of an ordinary annuity table is a tool used to calculate the future value of a series of payments made at the end of each period over a certain number of periods.
This table helps individuals determine the amount they will have in the future based on their current investment or savings plan. By using the table, investors can estimate the value of their investment at the end of the investment period, assuming they make regular, equal payments.
The table is also useful in calculating the present value of a series of payments. By taking the future value of these payments and discounting it back to the present, individuals can determine the amount they would need to invest today to achieve their desired future value. This is known as the present value of an ordinary annuity.
The present value of a single amount is also important to consider when investing. This refers to the value of a lump sum payment today that will grow over time, assuming a certain rate of return. By understanding the present value of a single amount, investors can better determine how much they need to invest to reach their financial goals.
In summary, the future value of an ordinary annuity table is a valuable tool for investors to determine the future value of their investments and savings plans. It can also be used to calculate the present value of a series of payments and a single lump sum payment.
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Your stock has a β = 2.77, the expected return on the stock
market is 16.67%, and the yield on T-bills is 6%. What is the
expected return on your stock?
To calculate the expected return on your stock, we can use the following formula: Expected return = risk-free rate + β * (market return - risk-free rate)Plugging in the given values, we get:
Expected return = 6% + 2.77 * (16.67% - 6%)
Expected return = 6% + 2.77 * 10.67%
Expected return = 6% + 29.50%
Expected return = 35.50%
Therefore, the expected return on your stock is 35.50%.The expected return on the stock can be calculated using the Capital Asset Pricing Model (CAPM):Expected return on stock = Risk-free rate + Beta*(Expected market return - Risk-free rate)
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In many nonindustrial societies, adolescence is considered to be either nonexistent or NON existant or growth leading too Sexual maturityq (true or false)
False. In many nonindustrial societies, adolescence is considered to be a distinct period of life, characterized by physical, cognitive, and social changes, although the concept and experience of adolescence may differ from that of industrial societies.
In many nonindustrial societies, adolescence is seen as a transitional period between childhood and adulthood, marked by physical changes such as growth spurts and the onset of puberty, as well as social and cultural changes such as increased responsibilities, initiation rites, and gender roles.
However, the experience of adolescence may vary greatly across different nonindustrial societies, depending on factors such as cultural values, economic conditions, and religious beliefs. For example, some societies may emphasize the importance of marriage and childbearing for adolescent girls, while others may encourage exploration and experimentation before settling into adult roles.
Overall, while the concept of adolescence may not be universal or static, it remains an important period of development and transition in many nonindustrial societies.
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Deposits of P are placed into a fund at the end of each year for 10 years. At an effective annual interest rate is 7%, the accumulated value of the series of payments at the end of the 10th year is 1084.31. Find P. a. 73.35 b. 78.48 c. 93.88 d. 88.61 e. 88.75
The answer is (b) 78.48.
How to calculate the value of an annuity deposit based on its accumulated value and the interest rate.?We can use the formula for the future value of an annuity to solve this problem:
FV =[tex]P * (\frac{(1 + r)^{n - 1}} { r})[/tex]
where:
FV is the future value of the annuityP is the annual paymentr is the effective annual interest raten is the number of paymentsIn this case, we know that:
FV = 1084.31
r = 7% = 0.07
n = 10
Substituting these values into the formula, we get:
1084.31 = P * [tex](\frac{(1 + 0.07)^{10 - 1)} }{ 0.07})[/tex]
Solving for P, we get:
P = 1084.31 * [tex](\frac{0.07 } {((1 + 0.07)^{10 - 1}})[/tex] ≈ 78.48
Therefore, the answer is (b) 78.48.
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___________ occurs when a supervisor earns less than his or her subordinates
a) Role conflict
b) Role ambiguity
c) status incongruence
d) informal status
The "status incongruence" occurs when a supervisor earns less than his or her subordinates. The correct option is C.
Status incongruence is a term used to describe a situation where an individual's position or rank within a social hierarchy is incongruent or inconsistent with their income, power or prestige.
In the workplace, the supervisor earns less than subordinates, that can lead to low job satisfaction, low morale, and decreased productivity. There are several supervisor role like counselor, director, and sponsor.
Therefore, the correct option is C, which is status incongruence.
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If the production function is Q = 30 + 33L + 16K, what’s the
most you can produce with 5 workers (L) and 3 unit of capital (K)?
Enter as a value.
The maximum amount that can be produced with 5 workers and 3 units of capital is 243 units.
The production function is a mathematical equation that shows the maximum amount of output (Q) that can be produced with a given amount of inputs such as labor (L) and capital (K). In the case of the given production function Q = 30 + 33L + 16K, the output depends on the number of workers and units of capital used.
To answer the question, we need to plug in the given values of L = 5 and K = 3 into the production function and solve for Q.
Q = 30 + 33(5) + 16(3)
Q = 30 + 165 + 48
Q = 243
Therefore, the maximum amount that can be produced with 5 workers and 3 units of capital is 243 units.
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A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's _organizational structure. (true or false)
The given statement "A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's organizational structure." is True.
Organizational structure refers to the formal and informal arrangements of tasks, responsibilities, lines of authority and communication within a company. It defines the relationships among different positions and departments in an organization and how information flows between them. A well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts. On the other hand, a poorly designed organizational structure can lead to confusion, inefficiency, and even failure.
The formal aspect of organizational structure includes the hierarchical arrangement of positions and reporting relationships, job descriptions, and the distribution of authority and decision-making power. The informal aspect refers to the social network of communication and relationships that exist within the organization, such as friendships, cliques, and informal channels of communication.
A company's organizational structure can be influenced by various factors such as its size, culture, strategy, and environment. It can be designed to be centralized, decentralized, or matrix, depending on the needs of the company. Ultimately, a well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts.
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8. Determine the beta of a portfolio formed by 30% risk-free asset, 25% stocks of UBS with a volatility of 15% and with a beta of 0.8; 65% in Unilever stocks with a variance of 0.0012 and a beta equal to 0,6 and a short selling position equal to 20% in corporate bonds of Eon with a beta of 0,3. A) Beta between 0, 45 and 0,55 B) Beta between 0,6 and 0,7 C) Beta between 0,33 and 0,43 D) None of the above
The beta of the given portfolio is beta between 0.45 and 0.55 Therefore, the correct option is A.
To determine the beta of a portfolio, we need to calculate the weighted average of the betas of each component in the portfolio. Given the information in your question, we have:
1. 30% risk-free asset (beta = 0)
2. 25% UBS stocks (beta = 0.8)
3. 65% Unilever stocks (beta = 0.6)
4. -20% Eon corporate bonds (short selling, beta = 0.3)
Now, we'll calculate the weighted average beta:
Portfolio beta = (0.30 * 0) + (0.25 * 0.8) + (0.65 * 0.6) + (-0.20 * 0.3)
Portfolio beta = (0) + (0.2) + (0.39) + (-0.06)
Portfolio beta = 0.53
Based on the calculated portfolio beta of 0.53, the correct answer is A) Beta between 0.45 and 0.55.
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the upper paleolithic refers to the time period between ___________ and ___________ years ago.
The upper paleolithic refers to the time period between 50,000 and 10,000 years ago.
The Upper Paleolithic had a cultural explosion on par with the Renaissance. Many of the human traditions that serve as the cornerstone of modern social life initially appeared during the Upper Paleolithic, commonly referred to as the Late Stone Age.
Dates for the Upper Paleolithic range from 50,000 to 10,000 years ago. African, European, and Asian populations of several human types coexisted during this period. They significantly improved instruments and artistic mediums. Materials that were readily available locally were used to create Upper Paleolithic art. Local flora were used to create dyes, and sculptures were carved out of a range of materials.
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The one-year interest rate is 4%. The interest rate for a two-year security is 6%. According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to A. 8.00% B. 8.04% C. 10.00% D. 5.00%.
According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to 8.04%. The answer is B.
According to the unbiased expectations theory, the expected future one-year interest rate one year from now (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
Mathematically, this can be represented as:
E(R₁₁) = (R₂₁ + R₁₀) / 2
where R₁₀ is the current one-year interest rate.
Rearranging the equation to solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
Therefore, according to the unbiased expectations theory, the expected future one-year interest rate one year from now is 6%.
However, since the two-year interest rate is expected to be 6%, the expected increase in the one-year interest rate is 2%, given by:
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
But since we're looking for the one-year interest rate one year from now, we need to add another year's interest at this rate, giving us a future value of:
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
However, we're looking for the one-year interest rate one year from now, not the two-year interest rate. Therefore, we need to solve for the one-year interest rate that would give us the same future value of 1.1236, given by:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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The one-year interest rate in one year must be the same as 8.04%, according to the unbiased expectations hypothesis. The solution is B.
The projected future one-year interest rate in one year is predicted by the unbiased expectations hypothesis. (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
E(R₁₁) = (R₂₁ + R₁₀) / 2
Here R₁₀ is the current one-year interest rate.
Solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
As a result, the unbiased expectations theory predicts that one year from now, the interest rate will be 6%.
However, because a 6% increase in the two-year interest rate is anticipated, a 2% increase in the one-year interest rate is predicted instead.
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
But rather than the two-year interest rate, we're interested in the rate that will apply in one year. Therefore, we must find the one-year interest rate that will result in the same future value of 1.1236 using the following formula:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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Mannix Corporation stock currently sells for $110 per share. The market requires a return of 9 percent on the firm's stock. If the company maintains a constant 4 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?
The most recent dividend per share paid on the stock was $3.36.
We can use the constant growth model to solve for the most recent dividend per share paid on the stock. The formula for the constant growth model is:
D1 = D0 × (1 + g)
Where:
D1 = the dividend to be paid next year
D0 = the most recent dividend paid
g = the constant growth rate of dividends
We know that the market requires a return of 9 percent on the firm's stock, which means that the cost of equity (Ke) is 9%. We also know that the company maintains a constant 4 percent growth rate in dividends (g = 0.04).
Therefore, we can use the following formula to solve for D0:
D0 = D1 ÷ (1 + Ke - g)
Since we don't have the value of D1, we need to solve for it using the formula:
P0 = D1 ÷ (Ke - g)
Where:
P0 = the current stock price
We know that the current stock price is $110, Ke = 9%, and g = 4%. Plugging these values into the formula, we get:
$110 = D1 ÷ (0.09 - 0.04)
Solving for D1, we get:
D1 = $110 × (0.09 - 0.04) = $5.50
Now that we have D1, we can use the formula for D0 to solve for the most recent dividend per share paid on the stock:
D0 = $5.50 ÷ (1 + 0.09 - 0.04) = $3.36
Therefore, the most recent dividend per share was $3.36.
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Strategic management focuses on integrating management, ________, and information systems to achieve organizational success.
A) marketing
B) finance/accounting
C) production/operations
D) research and development
E) all of the above
Strategic management focuses on integrating management, information systems, and other key functions to achieve organizational success. In this context, the correct answer is E) all of the above.
Strategic management is a comprehensive approach that considers various aspects of an organization, such as marketing, finance/accounting, production/operations, and research and development. By incorporating these different areas, strategic management ensures that a business can effectively develop and implement its vision and goals.
Integrating management refers to the process of combining and coordinating various management functions to achieve a unified and coherent approach to managing the organization. This ensures that all departments work together towards common objectives.
Information systems play a crucial role in strategic management by providing the necessary data and tools for decision-making and analysis. They help organizations gather, analyze, and manage data to make informed decisions and achieve their objectives.
To summarize, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success.
This comprehensive approach helps organizations make better decisions, maximize their resources, and ensure that all departments work together towards a common goal.
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you are purchasing a new machine that costs $12 million, and that has a 7 year expected life span. After 7 years, the estimated salvage value is $2 million. What is the yearly straight-line depreciation? (answer in MILLION dollars, but without the dollar sign, e.g. "0.42" is $0.42 million) Type your answer...
The yearly straight-line depreciation for the machine is $1.43 million.
The yearly straight-line depreciation for the new machine that costs $12 million and has an expected life span of 7 years with a salvage value of $2 million is calculated by subtracting the salvage value from the cost of the machine and dividing it by the expected life span. In this case, the calculation would be:
($12 million - $2 million) / 7 years = $1.43 million per year
Therefore, the yearly straight-line depreciation for the machine is $1.43 million.
Straight-line depreciation is a common method used to calculate the decrease in the value of assets over time. It assumes that the value of the asset decreases by an equal amount each year. In this case, the depreciation expense for the machine is spread out evenly over its expected life span of 7 years. The salvage value is also taken into account to determine the total amount of depreciation. The yearly straight-line depreciation can be useful for companies to determine the cost of owning and operating assets over their useful lives.
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a(n) _________ is a social entrepreneur who creates something new through the combination of diverse and different elements.
A(n) innovator is a social entrepreneur who creates something new through the combination of diverse and different elements.
Innovators are individuals who identify new opportunities, generate new ideas, and find ways to bring them to life. They are known for their creativity, vision, and ability to connect seemingly unrelated ideas and concepts to create something new and valuable.
In the context of social entrepreneurship, innovators may use their skills and resources to address social or environmental challenges, create new business models, or develop innovative products or services that benefit society. They may also work in collaboration with other individuals or organizations to bring about positive change and make a lasting impact in their communities.
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A "social innovator" is a social entrepreneur who creates something new through the combination of diverse and different elements.
Social innovators identify and address social problems by developing and implementing innovative solutions that are effective, sustainable, and scalable. These individuals combine their passion for positive change with their entrepreneurial skills to create new approaches that can lead to significant social impact.
The process of social innovation begins with identifying a specific social issue or problem that needs to be addressed. Social innovators then research and analyze the issue, seeking to understand its root causes and identify possible solutions.
Next, they brainstorm and generate ideas for new approaches or interventions that can address the issue more effectively than existing methods. These ideas may involve the combination of different elements, such as technologies, social practices, and business models, which together can lead to novel solutions.
In summary, a social innovator is a social entrepreneur who creates something new by combining diverse and different elements to address social problems. Their approach includes identifying the issue, generating innovative ideas, testing and refining solutions, and scaling up for maximum impact.
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A(n) ________ methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one.
A. explicit
B. tacit
C. conversion
D. structured
E. parallel
A structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is D. structured.
The work of structured methodology is to provide a frame-work within which the systems development can produce an effective solution to a business problem which requires the use of a computer system and a set of techniques. Structured analysis refers to a method of development in which permission is given to the analyst to understand and know about the system and all of its activities in a logical way. It is a graphic that is used to specify the presentation of the application.
Thus, a structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is option D.
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Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, what is the price of the bond today? Under what condition is it sold?
a. OR $7,276.70, discounted
b. Or $7,276.70, with premium
c. Or $3,279.40, with premium
d. $3,279.40, discounted
e. OR $7,276.70, per pair
Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, period of bond is $3,279.40, and on discounted condition. Correct alternative is d.
Information given in the questions are as follows
Face value = 5000
Coupon rate = 7%
Years to maturity = 10 (since the 15 year bond is issued 5 years ago)
Required return = 12%
Coupon Payment =350
Maturity= 15
Market rate= 12.00%
Number of times compounded= 2
PV(0.12/2,15*2,-350/2,-5000)
= $3,279.40
Since the price of the bond is less than the face value of the bond, the bond is selling at a discount
Answer = $3,279.40, discount
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Customers should be billed for back-orders when a. The back-ordered goods are shipped b. The original goods are shipped c. Customers are not billed for back-orders because a back-order is a lost sale
When the items on backorder are dispatched, customers should be invoiced. Here option A is the correct answer.
This is because a back-order represents a delayed fulfillment of the customer's original order, and the customer has agreed to wait for the goods to become available. Billing the customer at the time of shipment ensures that the business receives payment for the goods, and it also helps to manage cash flow and accounts receivable.
Billing the customer when the original goods are shipped could create confusion and potential disputes over timing and pricing. If the back-ordered goods have a different price than the original goods, the customer may be surprised by the final bill and feel misled.
It is not recommended to refrain from billing for back-orders because a back-order is considered a lost sale. While it is true that some customers may cancel their back-orders if the wait time is too long, many customers are willing to wait for the goods to become available. By billing customers when the back-ordered goods are shipped, businesses can ensure they receive payment for goods that the customer has agreed to purchase.
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problem 15-01 given the following information concerning a convertible bond: principal: $1,000 coupon: 5 percent maturity: 17 years call price: $1,050 conversion price: $37 (that is, 27 shares) market price of the common stock: $31 market price of the bond: $1,030 what is the current yield of this bond? round your answer to two decimal places. % what is the value of the bond based on the market price of the common stock? use the given above number of shares into which the bond may be converted. round your answer to the nearest dollar. $ what is the value of the common stock based on the market price of the bond? use the given above number of shares into which the bond may be converted. round your answer to the nearest cent. $ what is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? round your answer to the nearest dollar. $ nonconvertible bonds are selling with a yield to maturity of 7 percent. if this bond lacked the conversion feature, what would the approximate price of the bond be? assume that the bond pays interest annually. use appendix b and appendix d to answer the question. round your answer to the nearest dollar. $ what is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? round your answer to the nearest dollar. $ what is the probability that the corporation will call this bond? since the price of the stock is -select- than the exercise price of the bond, the probability of the bond being called is -select- .
a. The current yield of the bond is 4.85%.
b. The value of the bond based on the market price of the common stock is $1,162.
c. The value of the common stock based on the market price of the bond is $33.
d. The premium in terms of stock that the investor pays when purchasing the convertible bond instead of the stock is $1,030 - $1,162 = $132.
e. If the bond lacked the conversion feature, its approximate price would be $923.
f. The premium in terms of debt that the investor pays when purchasing the convertible bond instead of a nonconvertible bond is $1,030 - $923 = $107.
g. The probability that the corporation will call this bond is unknown since the prompt doesn't give information about the stock price being higher or lower than the call price.
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be 9 yes Financial results may a misleading indicator of strategic health of a company do you agree with this statement? Explain start with with this statement or agree I do not agree Strictly one page: Strateg-effectiveness effia oncy - financial is operations : *Machoki - Readings FOC FIDEL MWAKI 4 COMPANY ADVOCATES$
I agree with the statement that financial results may be a misleading indicator of the strategic health of a company. While financial performance is undoubtedly important, it cannot be the only metric for evaluating a company's overall success.
A company may have strong financial results but still struggle with operational efficiency, or its strategic goals may not align with its financial performance.
For example, a company may have achieved high profitability through cost-cutting measures, but at the expense of investing in long-term growth opportunities.
Alternatively, a company may have incurred short-term losses in pursuit of a strategic shift that will position it for long-term success.
Therefore, it is essential to evaluate a company's overall strategy, effectiveness, efficiency, and operations alongside financial performance to gain a comprehensive understanding of its strategic health. Focusing solely on financial results can lead to a short-sighted view of a company's long-term prospects.
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Had to split question into two photos for words to remain clear and visible
Question 13 The firm is evaluating a proposal to extend credit to a group of new customers. The new customers will they will pay in 30 days. The variable contrato eCOGS) is 80% of sales, collection expenses are 5% Cocor upront, while the collection cost out on the date in which the customer's payment is recal one day's sales the firm grants credit?
The firm is evaluating a proposal to extend credit to a group of new customers who will pay in 30 days. The variable cost (COGS) is 80% of sales, and collection expenses are 5%. The collection cost is incurred on the date when the customer's payment is received. The question asks if the firm should grant credit to these new customers.
Step 1: Analyze the costs and benefits associated with extending credit.
The variable cost (COGS) represents 80% of sales, which is the cost of producing the goods sold. Collection expenses are 5% of the sales, which are the costs associated with collecting payments from customers.
Step 2: Evaluate the risks and potential returns.
Extending credit to new customers can lead to increased sales and revenue. However, it also comes with the risk of non-payment or delayed payments, which can affect cash flow and profitability.
Step 3: Compare the potential returns to the costs.
To determine if granting credit is a wise decision, the firm needs to weigh the potential increase in sales and revenue against the costs associated with extending credit and collecting payments.
Step 4: Make a decision.
If the potential returns outweigh the costs and risks, the firm should consider extending credit to the new customers. However, if the costs and risks are too high, it might be more prudent to avoid granting credit to these customers and explore other options for growing sales and revenue.
In summary, to decide whether to grant credit to the new customers, the firm should carefully analyze the costs and benefits, evaluate the risks and potential returns, and compare these factors before making a final decision.
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Using Return Distributions Suppose the returns on long-term government bonds are normally distributed. Based on the historical record, what is the approximate probability that your return on these bonds will be less than −3.9 percent in a given year? What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99 percent of the time?
The Range of return of the following is given as:
The probability that the return will be less than -3.9% is 16%The required range of returns for 95 percent of the time for long term government bonds is -13.7% to 25.5%.The range of returns for 99 percent of the time for long term government bonds is -23.5% to 35.3%.Any type of investment instrument, including real estate, bonds, equities, and fine art, can be subject to a rate of return (RoR). Any asset can be used with the RoR as long as it is acquired once and generates cash flow at some point in the future.
The attractiveness of various investments may be determined, in part, by comparing their historical rates of return to those of comparable assets. A needed rate of return is frequently chosen by investors before making an investment decision.
Return range for a security with returns of normal distribution:
When a security's returns are regularly distributed, they are symmetrical around the mean return amount. There is a 68% likelihood that the return in this situation will be within one standard deviation of the mean. A 95% possibility exists that the return will fall between two standard deviations of the mean. Additionally, there is a 99% likelihood that the return will fall within a three standard deviation range of the mean.
With the standard deviation([tex]\sigma[/tex]) and the mean (R) , different probability of the return to fall in a range are mentioned below.
Probability Range
About 68% → [tex]R \pm \sigma[/tex]
About 95% → [tex]R \pm 2\sigma[/tex]
About 95% → [tex]R \pm 3\sigma[/tex]
The approximate probability that your return on these bonds will be less than −3.9 percent in a given year:
[tex]R \pm \sigma =[/tex] (5.9 - 9.8) to (5.9 + 9.8)
= -3.9% to 15.7%.
Hence, the approximate probability that the return will be less than -3.9% is 16%.
With standard deviation = 9.8% and mean = 5.9%
[tex]R \pm 2\sigma =[/tex] (5.9 - 2x9.8) to (5.9 + 2x9.8)
= (5.9% - 19.6%) to (5.9% + 19.6%)
= -13.7% to 25.5%
Hence the required range of returns for 95 percent of the time for long term government bonds is -13.7% to 25.5%.
With standard deviation = 9.8% and mean = 5.9%
[tex]R \pm 3\sigma =[/tex] (5.9 - 3x9.8) to (5.9 + 3x9.8)
= (5.9% - 29.4%) to (5.9% + 29.4%)
= -23.5% to 35.3%
Hence, required range of returns for 99 percent of the time for long term government bonds is -23.5% to 35.3%.
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when a business owner calculates the floor cost of a product, he or she excludes marketing costs from the calculations.group startstrue or false
True. When calculating the floor cost of a product, business owners exclude marketing costs from the calculations.
Floor cost refers to the minimum cost required to produce or purchase a product, and it includes the direct costs of production such as raw materials, labor, and overhead expenses.
Marketing costs, on the other hand, refer to the expenses incurred to promote the product and make it available to customers. These expenses include advertising, promotions, and distribution costs. Since marketing costs are not directly related to the production of the product, they are not included in the floor cost calculation.
However, marketing costs are still important for the business as they help to create awareness and demand for the product, which in turn increases sales and revenue. Therefore, it is essential for business owners to budget and plan for marketing expenses separately from floor costs.
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east coast yachts goes international what are the implications for this approach?how can the company hedge its exchange rate risk? what are the implications for this approach?
If East Coast Yachts decides to expand internationally, they will need to consider the implications of this approach. One of the main implications is the exposure to exchange rate risk. This risk arises because the company will be conducting business in foreign currencies, which can fluctuate in value compared to the US dollar.
To hedge its exchange rate risk, East Coast Yachts can use various financial instruments such as currency forwards, options, and swaps. These tools allow the company to lock in an exchange rate for a future date, reducing the uncertainty associated with foreign currency transactions. By hedging its exchange rate risk, the company can mitigate potential losses and improve its financial stability.
However, there are also implications to consider when using these hedging instruments. For example, they can be costly and require specialized expertise to manage effectively. Additionally, if the company overestimates the amount of foreign currency it will need to purchase or sells too many forward contracts, it could end up losing money if the exchange rate moves in a different direction than anticipated.
Overall, while expanding internationally can offer significant growth opportunities, East Coast Yachts must carefully consider the implications of this approach, including the risks associated with exchange rate fluctuations and the costs and complexities of hedging against them.
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Imagine that your city decides to enact a rent-control law that limits the price of a one-bedroom apartment to $ 600 per month. Using the table below, answer the following questions.
Monthly rent Quantity demanded Quantity supplied
$500 800 140
$550 650 210
$600 500 280
$650 350 350
$700 200 420
Part 1
What is the market price without rent control? $
Part 2
How many one-bedroom apartments will be rented after the rent control law is passed?
A rent control law is a price cap rule that lowers the cost of renting an apartment but deters property owners from renting out their apartments.
Does rent regulation represent a pricing floor or ceiling solution?Rent control is a prime example of a price cap. Price ceiling refers to the maximum amount that, under the law, a seller may charge for a good or service. A landlord's ability to charge rent is restricted by rent control.
Does rent regulation represent a price floor? Is it real or not?A price ceiling, not a price floor, is what rent control is an example of. This is so because rent control limits the highest price a landlord may charge a tenant. A price floor is the lowest permitted price.
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Answer:part 1 is 650$ part 2 is 280
Explanation:
the degree to which people believe a person has their best interests in mind is known as:
The degree to which people believe a person has their best interests in mind is known as perceived benevolence or perceived trustworthiness.
People's perceptions of someone's goodness or trustworthiness might be gauged by how much they think that person has their best interests in mind. Factors including the person's behaviour, communication style, reputation, and degree of competence can all have an impact on this. those are more likely to trust those they believe to be trustworthy, honest, and truly concerned about their welfare.
Building and sustaining healthy relationships, both personally and professionally, might depend on this degree of trust.
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The degree to which people believe a person has their best interests in mind is known as perceived benevolence or perceived trustworthiness. People's perceptions of someone's goodness.
or trustworthiness might be gauged by how much they think that person has their best interests in mind. Factors including the person's behaviour, communication style, reputation, and degree of competence can all have an impact on this. those are more likely to trust those they believe to be trustworthy, honest, and truly The degree to which people believe a person has their best interests in mind is known as perceived benevolence or perceived benevolence trustworthiness. People's perceptions of someone's goodness or trustworthiness might be gauged by how much they think that person has their best interests in mind. Factors including the person's behaviour, communication style, reputation, and degree of competence can all have an impact on this. those are more likely to trust those they believe to be trustworthy, honest, and truly concerned about their welfare. concerned about their welfare. Building and sustaining healthy relationships, both personally and professionally, might depend on this degree of trust.
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which of the following is an advantage of the first in, first out (fifo) method? a. it results in lower tax liability. b. it reduces the risk of spoilage. c. record keeping is simple under this method. d. this method involves no complex calculations.
The advantage of the first in, first out FIFO method is that it reduces the risk of spoilage. Option B is correct.
The FIFO method assumes that the first items that are purchased or produced are the first items sold or used, which means that the oldest inventory is always used first. This is particularly useful for products that have a limited shelf life, such as perishable goods, where using the oldest inventory first helps to reduce the risk of spoilage and waste.
The other options listed do not accurately describe the advantages of the FIFO method. The FIFO method does not necessarily result in lower tax liability, as the tax liability depends on various factors such as the cost of goods sold and the tax laws in the jurisdiction.
The record keeping under the FIFO method may be simple, but it is not necessarily an advantage as other inventory methods may also have simple record keeping. Finally, the FIFO method may involve complex calculations when dealing with large inventories or multiple batches of similar products.
Hence, B. is the correct option.
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the candle shop experienced the following events during its first year of operations: acquired cash by issuing common stock. paid a cash dividend to the stockholders. paid cash for operating expenses. borrowed cash from a bank. provided services and collected cash. purchased land with cash. determined that the market value of the land is higher than the historical cost.
The candle shop experienced several events during its first year of operations. Firstly, they acquired cash by issuing common stock.
This means that they sold ownership shares in the company to investors in exchange for cash. Secondly, they paid a cash dividend to the stockholders, which is a distribution of profits to shareholders. Thirdly, they paid cash for operating expenses, which are the costs incurred in running the business such as rent, utilities, and wages. Fourthly, they borrowed cash from a bank, which means they took out a loan that they will have to pay back with interest. Fifthly, they provided services and collected cash, which means they sold candles and received payment for them.
Lastly, they purchased land with cash. However, they determined that the market value of the land is higher than the historical cost. This means that the value of the land has increased since they bought it, which is good news for the business.
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a business structure that combines the tax benefits of a limited partnership but is similar to a corporation in that is publicly traded on a security exchange is known as a
The business structure that you are referring to is known as a Master Limited Partnership (MLP).
An MLP is a type of partnership that combines the tax benefits of a limited partnership with the liquidity and access to capital of a publicly traded corporation. This structure is commonly used in the energy, natural resources, and real estate industries, where companies require significant capital investments to finance their operations.
In an MLP, the general partner manages the partnership and is responsible for making all business decisions. The limited partners provide capital and have limited liability for the partnership's debts and obligations. The limited partners also receive a share of the partnership's income and tax benefits, which can include deductions for depreciation and depletion.
One of the key advantages of an MLP is that it can be publicly traded on a securities exchange, allowing investors to buy and sell units in the partnership.
This provides investors with liquidity and the ability to diversify their portfolios. Additionally, MLPs are not subject to federal income tax at the entity level, which can result in significant tax savings for the partnership and its investors.
Overall, the MLP structure is an attractive option for companies that require access to capital and want to take advantage of the tax benefits of a partnership while remaining publicly traded.
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