Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The required simple rate of return on this debt has now risen to 16 percent. What is the current value of this bond? (Round the answer to the nearest whole number.)​

Answers

Answer 1
Answer:

Solving a question by financial calculator method. I am using (Texas Instruments BA II plus)

The answer is Current value = $550

First, since it is Semiannual coupon, then we adjust the interest rate to semi-annual rate and also that multiply by 15 years by 2 since we have 2 semi annual periods per year.

Current value

Also Note that: If using the same calculator as me, key in the numbers first before the function .

Then the Total duration of investment ;N is = 15 * 2 = 30

Then Interest rate; I/Y = 16% / 2 = 8%

After that the Face value; FV = 1000

Now the Semi annual Coupon Payment ; PMT = (8%/2)*1000 = 40

then CPT PV = $549.689

Thus,  the current value of this bond is $550 (rounded to whole number.)

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Answer 2
Answer:

Answer:

Current value = $550

Explanation:

You can solve this question using a financial calculator. I am using (Texas Instruments BA II plus)

First, since it is Semiannual coupon, adjust the interest rate to semi-annual rate and multiply  15 years by 2 since we have 2 semi annual periods per year.

Note: If using the same calculator as me, key in the numbers first before the function .

Total duration of investment ;N = 15 * 2 = 30

Interest rate; I/Y = 16% / 2 = 8%

Face value; FV = 1000

Semi annual Coupon Payment ; PMT = (8%/2)*1000 = 40

then CPT PV = $549.689

Therefore the current value of this bond is $550 (rounded to whole number.)


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Boise, a division of Price Enterprises, currently performs computer services for various departments of the firm. One of the services has created a number of operating problems, and management is exploring whether to outsource the service to a consultant. Traceable variable and fixed operating costs total $80,000 and $25,000, respectively, in addition to $18,000 of corporate administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed operating costs would be reduced by 70%. The irrelevant costs in Boise’s outsourcing decision total:

Answers

Answer:

irrelevant costs in Boise’s outsourcing = $25500

Explanation:

given data

variable costs = $80,000

fixed operating costs = $25,000

administrative overhead = $18,000

fixed operating costs reduced = 70%

to find out

The irrelevant costs in Boise’s outsourcing decision total

solution

we get here first reduction in traceable cost that is

reduction = 30% of $25,000

reduction = $7500

so irrelevant costs in Boise’s outsourcing will be

irrelevant costs in Boise’s outsourcing = administrative overhead + reduction cost

irrelevant costs in Boise’s outsourcing = $18000 + $7500

irrelevant costs in Boise’s outsourcing = $25500

Shamrock Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 161,900
Purchases (gross) 697,000
Freight-in 31,400
Sales revenue 924,000
Sales returns 73,200
Purchase discounts 12,100

Compute the estimated inventory at May 31, assuming that the gross profit is 40% of net sales

Answers

Answer:

The estimated inventory at May 31 is $240,100

Explanation:

The gross profit is the difference between the sales revenue and the cost of good sold.

The gross profit percentage is the ratio of gross profit to net sales expressed as a percentage.

Net sales is the sales less returns and allowances. Similar to net sales is net purchases which is the gross purchase net the allowances and returns.

Net purchases = $697,000 - $12,100

= $684,900

Net sales = $924,000 - $73,200

= $850,800

Gross profit margin percent = gross profit/net sales

gross profit = 0.4 * $850,800

= $212,700

cost of goods sold = $850,800  - $212,700

= $638,100

The movement in the balance of inventory at the start and end of a period is as a result of sales and purchases. While sales reduces the balance in inventory, purchases increases the balance. This may be expressed mathematically as

Opening balance + purchases + freight inward - cost of goods sold = closing balance

$161,900 + $684,900  + $31,400 - $638,100  = Estimated ending inventory

Estimated ending inventory = $240,100

According to the video, what do Financial Analysts analyze? Check all that apply.financial records
travel distances
insurance claims
a company's competitors
fraud

Answers

A-D

-financial records

-a company’s competitors

Answer:

Financial Records

A Company’s Competitors

Explanation:

I got it right on edge 2020 hope this helps!

Plemmon Company adds materials at the beginning of the process in the forming department, which is the first of two stages of its production cycle. Information concerning the materials used in the forming department in April follows: Units MaterialsCosts Work in process at April 1 15,000 $ 8,000 Units started during April 60,000 $38,500 Units completed and transferred to next department during April 65,000 Using the average cost method, what is the materials cost of the work in process at April 30?

Answers

Answer:

$6,200

Explanation:

Beginning Work in progress     $15,000       $8,000

Units started                               $60,000      $38,500

Total process                              $75,000      $46,500

Less: Units transferred to tax    $65,000

Ending work in progress            $10,000

Average cost method material cost of work in progress = Material cost ÷ Total units

$46,500 ÷ $75,000

= $0.62

Material cost of work in progress = $0.62 × $10,000

= $6,200

Final answer:

In April, Plemmon Company started with $8000 worth of materials and used $38500 over the month. 65,000 units were completed, leaving 10,000 units still in process. The materials cost of these remaining units, calculated using the average cost method, is $6,200.

Explanation:

To find the material cost of work in process at April 30 using the average cost method, we first need to calculate the total cost of material used throughout April, which includes both the cost of materials from initial work in process and the materials started during the month. That gives us the sum of $8,000 and $38,500, amounting to $46,500 in total materials cost. Since 65,000 units were completed and transferred out during April, this means 10,000 units (75,000 units at the start and started during April - 65,000 units completed) remain in work in process at the end of April. Average cost per unit is calculated as total cost divided by total units, giving us $46,500 divided by 75,000 units, which equals $0.62 per unit. The material cost of work in process at April 30 is thus 10,000 units times $0.62, giving a result of $6,200.

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Here is some price information on Fincorp stock. Suppose that Fincorp trades in a dealer market. Bid Ask 55.25 55.50 a. Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed

Answers

Answer:

$55.50

Explanation:

The bid price is $55,25 is the price applicable to investors would intend to sell their investment.

The ask price is $55.50 is the price applicable to investors who wish to acquire the Fincorp stock.

The prices have been computed in such a  way that the broker will always gain, whether an investor is buying or selling his/her stake.

Conclusively, the order given to the broker to buy at market would be executed at the ask price of $55.50, not the other way round.

Rooney Company established a predetermined variable overhead cost rate at $9.40 per direct labor hour. The actual variable overhead cost rate was $8.40 per hour. The planned level of labor activity was 74,900 hours of labor. The company actually used 79,900 hours of labor. Required Determine the total flexible budget variable overhead cost variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Answers

Answer:

$32,900 favorable

Explanation:

The computation of the total flexible budget variable overhead cost variance is shown below:

= Total budgeted overhead cost - actual budgeted overhead cost

where,

Total budgeted overhead cost is

= $9.40 × 74,900 hours

= $704,060

And, the actual budgeted overhead cost is

= $8.40 × 79,900 hours

= $671,160

So, the total flexible budget variable overhead cost variance is

= $704,060 - $671,160

= $32,900 favorable

Since the standard cost is greater than the actual cost so it would have favorable variance