Suppose a State of New York bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.5%, how much is the bond worth today

Answers

Answer 1

Answer:

Answer:

Price of Bond = 585.43

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).

The question does not provide information about interest payment therefore the price of the bond is the present value.

PV of redemption Value

PV = F × (1+r)^(-n)

F-1000, r-0.055, n- 10 ×2

PV = 1,000 × 1.055^(-10)

PV = 585.43

Price of Bond =$ 585.43

Related Questions

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Disney and other global firms have successfully bridged the cultural gap by producing advertising that appeals to the same target market across Multiple Choice a. regions. b. countries. c. demographics. d. counties. e. countercultures.
A _____ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership.
Apply What You’ve Learned - Managing Credit Cards and ConsumerLoansScenario: You are 30 years old, married, have two children, and household income (take-home pay) of$3,500 per month. Your credit and consumer debt is as follows:_______.• Car loan, 6% interest rate, $10,000 balance, $295 per month• Department store card, 28% interest rate, $600 balance, minimum payment 5% of balance• Discover Card, 12% interest rate, $2,000 balance, minimum payment 2% of balance• VISA Card, 13% interest rate, $3,000 balance, minimum payment 2% of balance• MasterCard 1, 14% interest rate, $4,000 balance, minimum payment 2% of balance• MasterCard 2, 14% interest rate, $0 balance, minimum payment 2% of balance• Gasoline card, 21% interest rate, $300 balance, minimum payment 5% of balanceAssume all credit cards will assess a $35 late fee and ongoing penalty interest of 8% above the currentrate if you miss a payment. Your recent VISA card statement came with a blank cash advance check(for up to $10,000) with terms of 23.99% APR and a fee of 3% if you use it. Your recent MasterCard 2statement came with a balance transfer oFer (up to $4,000) with no fee and 0% APR for 12 months,after which the normal interest rate applies. You recently found an incorrect amount charged on yourVISA card from a store you frequent often. You’d like to come up with a plan to eliminate all of yourcredit card debt.In general, is it a good idea to make only minimum payments on your credit cards?Yes, you can invest the money saved each month to earn interest.No, it will cause your interest rate to go up.No, the small payment requirement is mathematically guaranteed to keep you in debt for manyyears.Yes, this allows you more ±exibility in your cash budget.Assuming you have $1,500 in your budget this month with which to pay down your credit cards, howmuch should you pay on each card?CardInterestrateOutstandingRequired minimumRecommendedbalancepayment(%)payment($)debtrepaymentamountstore cardDiscover Card12%2,0008%VISA Card13%3,00010%MasterCard 114%4,0008%MasterCard 214%010%Gasoline card21%30015%Total$9,900$1,500
Firm B has a 12% ROE. Other things held constant, what would its expected growth rate be if it paid out 25% of its earnings as dividends?

The cost of an asset is $ 1 comma 050 comma 000, and its residual value is $ 130 comma 000. Estimated useful life of the asset is ten years. Calculate depreciation for the second year using the doubleminusdecliningminusbalance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

Answers

Answer:

$168,000

Explanation:

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life)

Depreciation factor = 2 x (1/10) = 0.2

depreciation expense in year 1 = 0.2 x $1,050,000 =$210,000

book value at the beginning of year 2 = $1,050,000 - $210,000 = $840,000

depreciation expense in year 2 = 0.2 x $840,000 = $168,000

Perfect Clean, Inc. provides housekeeping services. The following financial data have been provided.Service Revenue

$80,000

Cleaning Supplies Used

22,000

Wages Expense

19,350

Office Rent Expense

5,150

Depreciation Expense—Machinery

550

Calculate the contribution margin and the contribution margin ratio. (Round your contribution margin to the nearest dollar, and your contribution margin ratio to two decimal places.)

A) $38,650; 48.31% B) $74,850; 93.56%

C) $60,650; 75.81% D) $32,950; 41.19%

Answers

Answer:

A) $38,650; 48.31%

Explanation:

The computation of the contribution margin and the contribution margin ratio is shown below:

Contribution margin = Service Revenue - Cleaning Supplies Used - wages expense

= $80,000 - $22,000 - $19,350

= $38,650

The variable cost is Cleaning Supplies Used + wages expense

And, the contribution margin ratio equals to

= (Contribution margin ÷ sales) × 100

= ($38,650 ÷ $80,000) × 100

= 48.31%

Assume the supply of bananas decreases due to rising costs ofproduction, while demand increases due to consumer preferences. What
will happen to the new equilibrium price and quantity?
A) price increases; quantity increases
B) price increases; quantity is unknown
C)price decreases; quantity decreases
D)price decreases; quantity increases
E)price is unknown; quantity increases

Answers

Answer:

c option price decreases;quantity decreases

A market economy is regulated by the interactions between which two things?

Answers

Answer:

b is the answer

Explanation:

producers and consumers

Case Description Tablets have become an ubiquitos part of our lives. The first models were launched in US in the year 2010.
Sales data is available for the first seven years (See below). As part of your analysis on the outlook for this industry:
a) How would you characterize the future for tablets? Are consumers crazy about this technology or are luke warm?
b) Prepare a five year forecast for this industry; has the market reached its peak (please identify the demand peak).

Please use the Bass Model Estimator provided. Use the spreadsheet tab called "Analysis Report"
Please clearly provide market size assumptions and justifications.
Year Annual Sales (Units Sold)
2010 3,000,000
2011 10,000,000
2012 25,000,000
2013 34,000,000
2014 39,000,000
2015 45,000,000
2016 51,000,000

Answers

Answer:

a) According to the published sales statistics, it appears that the initial release of tablets in 2010 was warmly accepted by customers, since sales increased quickly in the years that followed. With only a 13% rise in revenue from 2015 to 2016, the rate of growth has slowed recently. This shows that customer enthusiasm for the technology may be waning.

b) We will utilize the Bass Model Estimator available on the "Analysis Report" page to project sales over the following five years. The "coefficient of innovation" (p) of this model accounts for the number of customers who have embraced the technology as well as the number of potential consumers who have not yet adopted the technology but may be persuaded to do so.

Explanation:

A bank system contains data on customers (identified by name and address) and their accounts. Each account has a balance and there are 2 type of accounts: one for savings which offers an interest rate, the other for investments, used to buy stocks.a. True
b. False

Answers

Answer:

a. True

Explanation:

The system of the bank contains the customers data i.e. name and the address by which they could be identified also their accounts are identified. Each and every account has the balance option also it involved two types of accounts i.e. saving that provides the rate of interest and the other one is for investment that used to purchase the stocks

Hence, the given statement is true

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