Lincoln Park Co. has a bond outstanding with a coupon rate of 5.76 percent and semiannual payments. The yield to maturity is 6.3 percent and the bond matures in 21 years. What is the market price if the bond has a par value of $2,000?a. $1,876.09b. $1,880.53c. $1,878.06d. $1,912.67e. 1,875.17
Answer:
e. 1,875.17
Explanation:
The computation of the market price i.e. present value is as follows:
Given that
RATE = 6.3% ÷ 2 = 3.15%
NPER = 21 × 2 = 42
PMT = $2,000 × 5.76% ÷ 2 = $57.6
FV = $2,000
The formula is given below:
=-PV(RATE,NPER,PMT,FV,TYPE)
After applying the above formula, the market price is $1,875.17
Suppose that today you buy a bond with an annual coupon rate of 10 percent for $1,120. The bond has 17 years to maturity. What rate of return do you expect to earn on your investment
Answer:
8.63%
Explanation:
The expected rate of return on the bond can be determined using a financial calculator bearing in mind that the calculator would be set to its end date before making the following inputs:
N=17(number of annual coupons in 17 years)
PMT=100(annual coupon=face value*coupon rate=$1000*10%=$100)
PV=-1120(the current price is $1,120)
FV=1000(the face value of the bon is $1000)
CPT
I/Y=8.63%
EXCEL APPROACH:
=rate(nper,pmt,-pv,fv)
nper=N=17
=rate(17,100,-1120,1000)
rate=8.63%
If the Fed sells Treasury bills (bonds/securities) this will shift the Group of answer choices money demand curve to the right. money supply curve to the right money demand curve to the left. money supply curve to the left.
Answer: money supply curve to the left.
Explanation:
The sale of Treasury Bills by the Fed is part of its contractionary monetary policy and is used to reduce the amount of money in the economy. By selling the bills, people pay money to the Fed which then takes the money out of circulation thereby reducing the amount of money in the economy.
The effect of this would be a leftward shift in the money supply curve to indicate that there is now less money in the economy. The Fed does this when it feels that the economy is overheated and so economic growth needs to be reduced to a more sustainable level.
Professional baseball teams in the United States use only wooden bats. If aluminum bats were permitted, the impact on the wooden bat market would be
Answer: b. a lower price for wooden bats.
Explanation:
If aluminum bats were permitted for use in baseball then a lot of teams would begin to use them instead. This would reduce the demand for wooden bats and lead to their prices falling.
The reason the price will fall is that the demand curve for the wooden bats will shift to the left to show that the demand has fallen. The curve would then intersect with the supply curve at a lower equilibrium price.
Essentially what happens is that, with people demanding less wooden bats, their prices would have to fall to entice people to buy them.
"The Four Ps and Three Cs form the basis of a simple model for TQM to take organizations successfully into the twenty-first century". Explain your understanding about statements with examples in a business
Answer:
Total quality management is a strategic ideal of all organizations today, operating in a highly competitive and globalized environment, where quality is an essential attribute for a company's good positioning and success in the active market.
Marketing and quality management tools, such as the four Ps and the three Cs will help companies to implement TQM in a simple and cheap way, through their own characteristics and analysis of their market. Using as an example a logistics company, the 4 ps of marketing and the 3 cs will help the company to improve its internal environment and consequently increase confidence in the external environment, because by improving communication, especially the organizational culture is strengthened, the strategies are more innovative and there is more staff capacity to set realistic goals and targets that can be achieved, by aligning organizational values with those of the potential audience, increasing quality, reducing waste, improving technology, reducing cost, etc.
Classify the source of market failure in each case listed.
Market Failure Market Power External ity
A single public utilities company is responsible for supplying electricity for an entire state. As a result, the utilities company can set the price of electricity.
A house party plays music at a very high volume, disturbing other residents in the neighborhood.
Answer:
Market Power
Externality
Explanation:
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
The utility company is a monopoly
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
A natural monopoly occurs due to the high start-up costs or a large economies of scale.
Natural monopolies are usually the only company providing a service in a particular region
At the beginning of the year, Crane Company estimates annual overhead costs to be $2400000 and that 400000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 375000 hours is
Answer:
the amount of overhead applied during the year is $2,250,000
Explanation:
The computation of the overhead applied is shown below;
= Estimated annual overhead ÷ machine hours × actual machine hours
= $2,400,000 ÷ 400,000 machine hours × 375,000 hours
= $2,250,000
hence, the amount of overhead applied during the year is $2,250,000
The operating income calculated using variable costing and absorption costing amounts to $9,100 and $11,200. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.
Answer:
$2,100
Explanation:
The difference between variable costing income and absorption costing income arises due to fixed cost deferred in inventory. This is the total fixed manufacturing overhead that will be expensed under absorption costing.
Calculation :
Fixed Cost in Inventory = $11,200 - $9,100
= $2,100
Dorman Company reported the following data:
net income 225,000
depreciation expense 25,000
gain on disposal of equipment 20,500
decrease in accounts receivable 14,000
decrease in account payable 3,600
prepare cash flows from operating actvities section of the statment of cash flows using the indirect method
Answer:
$239,900
Explanation:
Preparation of the cash flows from operating actvities section of the statment of cash flows using the indirect method
Net cash flow from operating actvities:
Net income $225,000
Adjustment:
Add Depreciation expense $25,000
Less Gain on disposal of equipment ($20,500)
Add Decrease in accounts receivable $14,000
Less Decrease in account payable ($3,600)
Net cash flow from operating actvities $239,900
Therefore the cash flows from operating actvities section of the statment of cash flows using the indirect method is $239,900
Which of the following statements is false? Question 21 options: Not all economists are agreed as to whether government should bail out companies in financial trouble. Not all economists prefer a rule-based monetary policy to discretionary monetary policy. Rule-based monetary policy advocates often assert that discretionary monetary policy can be motivated by politics. The tax multiplier is always larger than the government spending mult
Answer:
The tax multiplier is always larger than the government spending multiplier
Explanation:
As we know that
Tax multiplier = mpc ÷ (1 - mpc)
Here mpc means marginal propensity to consume
And,
Government spending multiplier= 1 ÷ (1 - mpc)
So based on this the government spending multiplier should always be more than the tax multiplier
Therefore the last option should be considered
During a recent fiscal year, Creek Company reported pretax income of $125,000, a contribution margin ratio of 25% and total contribution margin of $400,000. Total variable costs must have been:
Answer:
475,000
Explanation:
Hey there! For this question, we will be using the COGS and SG&A formulas.
Basic Formula: Revenue - COGS - SG&A = Pretax profits
How do you calculate the SG&A?
Well, SG & A = (Contribution - Prextax income)
SG & A = ($400,000 - $125,000)
SG & A= $275,000
What's next?
Now, you must calculate for revenue.
Contribution margin/Revenue = Contribution Margin Ratio
Revenue = Contribution Margin/Contribution Margin Ratio
Revenue = $400,000/.25
Revenue = $1.1m
Now, let's use the COGS formula.
COGS: Starting inventory + purchases - ending inventory = cost of goods sold
Revenue - COGS - SG&A = Pretax profits
1.1m - COGS - 400k = 125k
COGS = $1.1m - $125k - $400k
Final answer: 1.100 Million (1,000,000)
Journalise the following transactions of Mr. Aamir Enterprises 4 (i)Mr. Aamirstarted business with Cash ₹60,000.
(ii) Deposited into Bank Rs. 2, 000
(iii). Purchased good for cash Rs. 3, 000
(iv). Building purchased from Hamza Rs. 5, 000.
Answer:
Mr. Aamir Enterprises
Journal Entries:
(i) Debit Cash Rs. 60,000
Credit Capital, Mr. AamirRs. 60,000
To record the amount invested in the enterprise.
(ii) Debit Bank Rs. 2,000
Credit Cash Rs. 2,000
To record amount deposited into the bank.
(iii). Debit Inventory Rs. 3,000
Credit Cash Rs. 3,000
To record the purchase of goods for cash.
(iv). Debit Building Rs. 5,000
Credit Cash Rs. 5,000
To record the purchase of building from Hamza, assumed to be for cash.
Explanation:
a) Data and Analysis:
(i) Cash Rs. 60,000 Capital, Mr. AamirRs. 60,000
(ii) Bank Rs. 2,000 Cash Rs. 2,000
(iii). Inventory Rs. 3,000 Cash Rs. 3,000
(iv). Building Rs. 5,000 Cash Rs. 5,000
Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $10,000 working at other occupations. Refer to Scenario 13-21. What is the economic profit for the family farm
Answer:
0
Explanation:
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
accounting profit = revenue - explicit cost
Explicit cost includes the amount expended in running the business.
100,000 - (25,000 + 40,000 + 25,000) = 10,000
economic profit = 10,000 - 10,000 = 0
The net asset value of shares in a closed-end investment company is $36. An investor buys the shares for $34 in the secondary market. The company distributes $1 and after one year, the net asset rises to $42. The investor sells the shares for $43 in the secondary market. What is the percentage return on the investment
Answer:
Closed-End Investment Company
The percentage return on the investment is:
= = 29.41%
Explanation:
a) Data and Calculations:
Net asset value of share = $36
Price paid by an investor = $34
Dividend distributed = $1
Net asset value after one year = $42
Selling price in the secondary market by the investor = $43
Total amount realized by the investor = $44 ($43 + $1)
Cost of investment = $34
Dollar return on the investment = $10 ($44 - $34)
Percentage return on the investment = Return on investment/Cost of investment * 100
= $10/$34 * 100
= 29.41%
Acme Air Compressor Company has decided to limit the number of compressors it will supply to some of its distributors that it suspects are selling a line of compressors made by one of its competitors. Acme is using its referent power in its distribution channel.
a. True
b. False
Answer:
b. False
Explanation:
A Referent power in an organization my be defined as the power of a person or a company that is based on high level of identification with that of admiration or inspiration or out of respect.
Thus in the context, the Acme company does not uses its referent power to its distribution channel when the company decides to limit the supply of the its compressors to some of its distributors as the distributors are selling some of the air compressors of the competitor company.
Hence the answer is FALSE.
Gizmo Inc. purchased a one-year insurance policy on October 1 for $5,280. The adjusting entry on December 31 would be: (If an amount box does not require an entry, leave it blank.)
Answer and Explanation:
The adjusting entry is shown below:
Insurance Expense ($5,280 × 3 months ÷ 12 months) $1,320
To Prepaid Insurance $1,320
(being the insurance expense is recorded)
Here the insurance expense is debited as it increased the expense and credited the prepaid insurance as it decreased the assets
Cash balance, December 1, 2016 is $18,200
Transactions:
Dec.
1 Common stock was issued to stockholders for $7,800 cash.
7 Purchased equipment for $1,700 on account.
14 Paid $20,000 cash for land.
17 Paid cash expenses: office rent, $1,700; employees' salaries, $1,500; utilities, $90.
23 Paid cash dividends of $2,600.
26 Earned service revenue for the month, $5,000, receiving cash.
Required:
Journalize the entries.
Answer:
Journal Entries:
Dec. 1 Debit Cash $7,800
Credit Common stock $7,800
To record the issuance of common stock for cash.
Dec. 7 Debit Equipment $1,700
Credit Accounts Payable $1,700
To record the purchase of equipment on account.
Dec. 14 Debit Land $20,000
Credit Cash $20,000
To record the payment for land.
Dec. 17 Debit Office Rent expenses $1,700
Debit Salaries expenses $1,500
Debit Utilities expense $90
Credit Cash $3,290
To record the payment for cash expenses.
Dec. 23 Debit Cash dividends $2,600
Credit Cash $2,600
To record the payment of cash dividends.
Dec. 26 Debit Cash $5,000
Credit Service revenue $5,000
To record the receipt of cash for earned services.
Explanation:
a) Data and Transactions Analysis:
Dec. 1 Cash $7,800 Common stock $7,800
Dec. 7 Equipment $1,700 Accounts Payable $1,700
Dec. 14 Land $20,000 Cash $20,000
Dec. 17 Office Rent expenses $1,700 Salaries expenses $1,500 Utilities expense $90 Cash $3,290
Dec. 23 Cash dividends $2,600 Cash $2,600
Dec. 26 Cash $5,000 Service revenue $5,000
Nancy Lerner is taking a course from Professor Goodheart who will count only her best midterm grade and from Professor Stern who will count only her worst midterm grade. In one of her classes, Nancy has scores of 30 on her first midterm and 50 on her second midterm. When the first midterm score is measured on the horizontal axis and her second midterm score on the vertical, her indifference curve has a slope of zero at the point (30, 50). Therefore this class could
Answer:
be professor Goodheart's but could not be Professor Stern's.
Explanation:
The indifference curve has a slope zero when marginal rate of substitution is zero. The marginal rate of substitution for Nancy is zero when she scores 30 in her first midterm. She scores 50 in her second midterm. The Professor Goodheart's count best midterm grades so Nancy grades must belong to Professor Goodheart.
Economists generally believe that rent control is Question 7 options: an efficient and fair way to help the poor. inefficient but the best available means of solving a serious social problem. a highly inefficient way to help the poor raise their standard of living. an efficient way to allocate housing, but not a good way to help the poor.
Answer:
a highly inefficient way to help the poor raise their standard of living.
Explanation:
Price control can be defined as standard restrictions or regulatory conditions that are typically set and enforced by the government of a country.
This ultimately implies that, price controls are used to impose the minimum and maximum prices set by the government, which are to be charged for various goods and services in the market.
Rent control can be defined as the system of laws, regulations or government legislation administered by a public institution or court of law in order to set the maximum price that can be charged by landlords. Thus, rent control is a form of price ceiling.
Generally, economists believe that rent control is a highly inefficient way to help or assist the poor raise their standard of living.
This ultimately implies that, economists generally believe that the implementation of rent control wouldn't avail the poor an opportunity or ability to improve and raise their standard of living in the society.
All of the following are true of measuring the effectiveness of security policies, except: A. you can get a basic understanding if individuals are being held accountable for adherence to security policies by examining policy violations, incidents, and security awareness. B. measuring accountability is easier than measuring effectiveness. C. the best measurement of whether employees are following policies is the actual reduction in risk that occurs. D. to ensure accountability, you need to measure if employees are following the policies.
Answer:
All of the following are true of measuring the effectiveness of security policies, except:
B. measuring accountability is easier than measuring effectiveness.
Explanation:
Measuring the effectiveness of security policies requires using quantitative tools to demonstrate that the security policies are working as they should. But measuring accountability requires the use of qualitative measurements, including understanding individuals, examining policy violations, analyzing incidents, and determining security awareness.
What would happen to GDP if the government hired unemployed workers who had been receiving an amount $0.5 TR in unemployment benefits, as government employees and now paid them $1 TR
Answer:
GDP will increase by $1 TR.
Explanation:
If the government is giving an amount to the unemployed worker then it will not account for the GDP because GDP calculation does not account the government transfers. Moreover, when the government hires them and paid them $1 TR. Thus this will consider as salary and salary is included in the GDP. Therefore, GDP will increase by $1TR.
A friend has $1,400 that he has saved from his part-time job. He will need his money, plus any interest earned on it, in six months and has asked for your help in deciding whether to put the money in a bank savings account at 5.90% interest or to lend it to Victor. Victor has promised to repay $1,470 after six months.
Required:
a. Calculate the interest earned on the savings account for six months.
b. Calculate the rate of return if the money is lent to Simone. Round your percentage answer to two decimal places.
c. Which alternative would you recommend? Explain your answer.
Answer:
a. The interest earned on the savings account for six months is:
= $41.30
b. The rate of return if the money is lent to Victor is:
= 10%
c. Based on the calculations alone, lending the $1,400 to Victor is better than saving in the bank, provided that there is no risk of default on the part of Victor.
Explanation:
a) Data and Calculations:
Savings from part-time job = $1,400
Interest rate in a bank savings account = 5.90%
Period of savings in the bank = 6 months
Future value of the $1,400 savings = $1,441.30
Victor repayment if $1,400 was instead lent to him = $1,470
From a financial calculator, the future value of $1,400 at 5.9% after six months is $1,441.30
Loan Amount 1400
Loan Term 0 years 6 months
Interest Rate 5.9
Compound Semi-annually
Pay Back 6 Months after
Results:
Payment Every 6 Months = $1,441.30
Total of 1 Payments = $1,441.30
Total Interest = $41.30
Interest paid by Victor = $70 ($1,470 - $1,400)
This translates to 5% for six months and 10% for 1 year
5% = ($70/$1,400 * 100)
On receiving a client's bank cut-off statement, an auditor most likely would trace
A. Checks dated after year end listed in the cut-off statement to the year-end outstanding checklist.
B. Prior-year checks listed in the cut-off statement to the year-end outstanding checklist.
C. Deposits in transit listed in the cutoff statement to the year-end bank reconciliation.
D. Deposits recorded in the cash receipts journal after year-end to the cutoff statement.
Answer:
B. Prior-year checks listed in the cut-off statement to the year-end outstanding checklist.
Explanation:
Bank cutoff statement can be regarded as bank statement that is produced as of a date which is seen as date that is subsequent to the date of the balance sheet. At a point in time, this date would be the one that will give permission for most of outstanding checks to clear the bank at the year-end. Cutoff bank statement is utilized in verifying reconciling items on the bank statement which been Mailed directly to the auditor. One of the purpose of cutoff bank statements is in verification of reconciling items on the year-end bank reconciliation of clients which comes with evidence that it can't be accessible to the client. It should be noted that On receiving a client's bank cut-off statement, an auditor most likely would trace Prior-year checks listed in the cut-off statement to the year-end outstanding checklist.
Suppose your client wishes to purchase an annuity that pays $110,000 each year for 8 years, with the first payment 5 years from now. At an interest rate of 5%, how much would the client need to invest now
Answer:
Initial investment= $557,050.6
Explanation:
Giving the following information:
Annual payment= $110,000
Interest rate= 5%
Number of payments= 8
First, we need to determine the value of the annuity five years from now. We will use the following formula:
PV= A*{(1/i) - 1/[i*(1 + i)^n]}
A= annual payment
PV= 110,000*{(1/0.05) - 1/[0.05*(1.05^8)]}
PV= $710,953.40
Now, the initial investment now:
PV= FV / (1 + i)^n
PV= 710,953.4 / (1.05^5)
PV= $557,050.6
A corporation issued 6,200 shares of $10 par value common stock in exchange for some land with a market value of $94,000. The entry to record this exchange is:
Answer:
Debit Land $94,000; credit Common Stock $62,000; credit Paid-In Capital in Excess of Par Value, Common Stock $32,000
Explanation:
Preparation of what The entry to record this exchange is:
Debit Land $94,000
Credit Common Stock $62,000
(6,200*$10)
Credit Paid-In Capital in Excess of Par Value, Common Stock $32,000
($94,000-$62,000)
(To record exchange)
What would be the most challenging part of working in Information technology
Answer:
The most challenging part of working in information technology are as given below:
1. Workload
2. Cybersecurity
3. Skills gaps
4. Digital transformation
5. Cloud computing
6.Budget
7.Leadership support in prioritizing new skills development
8.Analytics and data management
9.Automation
Explanation:
Many have been facing a new hurdle—not confined to IT. As millions of people adjust to the new norm of remote working, employees, as well as supervisors had to learn quickly how to improve virtual communication and collaboration. For those who don't have the habit of working from home, it may be a fight to avoid distractions that aren't a factor if you work at an office. (e.g. family members, house chores, Netflix).
In the event of a difficult transition to remote work, we offer various training courses designed specifically to help teams maximize virtual technologies and enhance soft skills, which are more critical when staff is in separate places.
On its year 1 financial statements, Seatax Corporation, an accrual-method taxpayer, reported federal income tax expense of $570,000. On its year 1 tax return, it reported a tax liability of $650,000. During year 1, Seatax made estimated tax payments of $700,000. What book-tax difference, if any, associated with its federal income tax expense should Seatax have reported when computing its year 1 taxable income? Is the difference favorable or unfavorable? Is it temporary or permanent?
Answer: $570000
Explanation:
The book-tax difference, that's associated with its federal income tax expense that Seatax should have reported when computing its year 1 taxable income will be $570000.
It should be noted that the $570000 for the book tax difference is permanent as it isn't reversible for.the next fiscal period.
whole number. a. Before the tax is imposed, the equilibrium price is $ 1.5 per bottle and the equilibrium quantity is 4 billion bottles. b. After the excise tax is imposed, consumers pay a price of $ 2 per bottle.c. After the excise tax is imposed, the price (or amount) producers keep after the tax is paid is $ per bottle.After the tax is imposed, the equilibrium quantity is 3 billion bottles.e. The government is able to collect $ billion of tax revenue from the tax.
Answer: hello your question is poorly structured attached below is the missing graph and missing part of the question
Assume the government imposes a $1.00 excise tax on the sale of every 2 liter bottle of soda. The tax is to be paid by the producers of soda. The figure below shows the annual market for 2 liter bottles of soda before and after the tax is imposed.
answer :
a) $2 , 4 billion
b) $2.5
c) $1.5
d) 3 billion
e) $3 billion
Explanation:
a) equilibrium price = $2 per bottle
equilibrium quantity = 4 billion bottles
b) After imposition of excise tax
consumers will pay = $2.5
c) The amount producers keep after the imposition of taxes
= $2.5 - tax
= 2.5 - 1 = $1.5
d) New equilibrium quantity ( after tax is imposed )
= 3 billion bottles ( from graph attached ) i.e. intersection of S2 and D
e) Amount of tax revenue collected by the government from the imposition of tax
= quantity of bottles sold * $1
= 3 billion * $1 = $3 billion
A Systematic Approach to Long-Term Capacity Planning - Purple Swift manufactures birdhouses in lots of 10. Each birdhouse takes 45 minutes to paint. After 10 birdhouses are painted, the company switches paint color which requires a 1-hour changeover. The company works 8 hours per shift, one shift per day, 220 days per year. Currently the company has one paint booth. What is Purple Swift’s paint capacity cushion if it builds 2,000 birdhouses per year?
Answer:
3.4%
Explanation:
The computation of the Purple Swift’s paint capacity cushion is shown below:
Time to paint 10 birdhouses (45 × 10 ÷ 60) 7.5 hours
Changeover time 1 hours
Total Operations time per lot (7.5 + 1) 8.5 hours
Hours available per year (8 × 220) 1760
Capacity (number of lots each year) (1760 ÷ 8.5) 207.06
Capacity (number of birdhouses each year) =207.06*10 2070.6
Actual Production given 2000
Utilization (2000 ÷ 2070.6) 96.6%
Capacity cushion = 100% - Utilization
= 100% - 96.6%
= 3.4%
The manager of Quick Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,400 for 1,400 inspections to $4,200 for 1,000 inspections. Please use the high-low method to calculate the variable cost per inspection.
Answer:
Variable cost per unit= $0.5 per inspection
Explanation:
Giving the following information:
The costs ranged from $4,400 for 1,400 inspections to $4,200 for 1,000 inspections.
To calculate the variable cost under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (4,400 - 4,200) / (1,400 - 1,000)
Variable cost per unit= $0.5 per inspection
