Cheyenne Corp. had the following transactions that took place during the year:I.Recorded credit sales of $2250II.Collected $1350 from customersIII.Recorded sales returns of $450 and credited the customer's account.What is the total effect of these transactions on free cash flow?a) No Effectb) Cannot be determinedc) Increased) Decrease

Answers

Answer 1

Answer:

The correct option is d) Decrease.

Explanation:

Free cash flow (FCF) can be described as the cash that is generated by a company after cash outflows required to support operations and maintain the capital assets of the company have been accounted for.

Therefore, FCF can be calculated by adjusting for non-cash expenses, changes in working capital, and capital expenditures to reconcile net income.

The total effect of these transactions on free cash flow can be determined by first calculating the account receivable for the year as follows:

Calculation of account receivable for the year:

Particular                                                     Amount ($)

Credit sales                                                    2,250

Cash collected from the customer              (1,350)

Sales returns                                                   (450)  

Account receivable                                        450  

A partial free cash flow statement can therefore be prepared as follows:

Cheyenne Corp.

Free cash flow statement (Partial)

Particular                                                                   Amount ($)  

Net income                                                                         xx

(Increase) decrease in non-cash current assets:

Increase in account receivable                                       (450)  

Free cash flow                                                                 (450)  

Since the free cash flow is negative or minus $450, it therefore implies that the total effect of these transactions on free cash flow is a decrease.

Therefore, the correct option is d) Decrease.


Related Questions

In an international communication process carried out by a company, the sales force of the company that conveys the encoded message to the intended receiver acts as a(n)

Answers

Answer: message channel

Explanation:

In an international communication process carried out by a company, the sales force of the company that conveys the encoded message to the intended receiver acts as a message channel.

The sales force are said to act as a.mesage channel because they are the ones that pass the message across to the intended receiver.

Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company’s owners such as selling or repurchasing shares of common stocks and paying dividends.
A. True
B. False

Answers

Answer: False

Explanation:

The cash flow from investing activities is a cash flow section that shows cash generated or the cash that is spent which relates to activities involving investment and this include buying physical assets, the investments in securities, or sale of assets or securities.

Therefore, the above analysis I the question is wrong.

Given money demand, by how much would the Moola central bank need to change the money supply to close the output gap?

Answers

Answer:

A. 5%

B. $20

C.-$20

D. $100 increase

E.$2

Explanation:

a. Calculation for the equilibrium interest rate in Moola

When we look at the table we would actually see that Money supply amount of $500 equal the Money demand amount of $500 which means that the equilibrium interest rate will be 5 percent.

b. The level of investment at the equilibrium interest rate.

Since we have 5% as the equilibrium interest rate which means that the investment at the equilibrium interest rate will be $20.

c. If we look at table we are going to see that the potential GDP of the amount of $330 and the actual GDP of the amount of $350 are beside the interest rate of 5 percent and we could as well see that actual GDP is lower than potential GDP which means that there is negative recessionary GDP gap.

Hence,

Recessionary GDP gap= Actual GDP - Potential GDP

Recessional GDP gap=Actual GDP $330- Potential GDP=-$20

Therefore-$20 will be the recessionary GDP gap.

d. In order for us to eliminate the recessionary gap, so that actual GDP amount can equal potential GDP , this means we have to increase the money supply to the amount of $600 which will inturn lead to an increase of $100

e. Calculation for the expenditure multiplier,

Expenditure multiplier=(Potential GDP $350-Actual GDP $330)/($20-$10)

Expenditure multiplier=$20/10

Expenditure multiplier=$2

Therefore the Expenditure multiplier will be $2

The question is incomplete as the table is not given.

In economics, demand and supply are the most important factors for any business to analyze the market. There is an inverse relationship between demand and supply. If the demand is high and supply is low then there will be higher prices of the goods.

The Moola central bank needs to change the supply of money by increasing $100 to close the output gap.

Reason:

In order to make the actual GDP amount to be equal to the potential GDP, that means by increasing the money supply of $600 will give the effect of $100 for covering the gap.

To know more about demand and supply, refer to the link:

https://brainly.com/question/14741584

Bi-Lo Traders is considering a project that will produce sales of $33,300 and have costs of $19,700. Taxes will be $3,500 and the depreciation expense will be $1,900. An initial cash outlay of $1,600 is required for net working capital. What is the project's operating cash flow?

Answers

Answer: $10,100

Explanation:

Based on the information that have been given in the question, the project's operating cash flow goes thus:

Sales. $33,300

Less: cost. $19,700

Less: depreciation. $1,900

Profit before tax $11,700

Less: tax. $3500

Net profit. $8200

Add: depreciation. $1900

Operating cash flow. $10,100

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.9 million to build, and the site requires $940,000 worth of grading before it is suitable for construction.

Required:
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

Answers

Answer:

$33,540,000

Explanation:

initial investment:

opportunity cost of land (resale price of land) = $10,700,000building cost of the facilities = $21,900,000other expenses related to the site (grading) = $940,000total $33,540,000

The purchase cost of the land is considered a sunk costs, since it is not relevant now. What is relevant is the price at which the land could be sold at the moment of starting the project.

Say that you purchase a house for $150,000 by getting a mortgage for $135,000 and paying a $15,000 down payment. If you get a 15-year mortgage with a 6 percent interest rate, what are the monthly payments

Answers

Answer:

Monthly installment  = $1,139.21

Explanation:

When a loan is to be paid over a period of time using a series of periodic equal installments, it is called loan amortization. Each equal installment is meant to liquidate the principal and the accrued interest.

The amount to be financed by way of loan=

= cost of house - down payment

= $150,000 - 15,000  = $135,000

The monthly equal installment is calculated as follows:

Monthly equal installment-= Loan amount/Monthly annuity factor

Monthly annuity factor  

=( 1-(1+r)^(-n))/r

Monthly interest rate (r)

= 6%/12= 0.5%

Number of months ( n) in 15 years

= 15* 12 = 180

Annuity factor  

= ( 1- (1.005)^(-180)/0.005= 118.504

Monthly installment = 135,000/ 118.504 =1139.21

Monthly installment  = $1139.21

At the beginning of 2023, the Mackinac Company purchased a machine for $510,000 (salvage value of $60,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation, but failed to deduct the salvage value in computing the depreciation base. Depreciation has been recorded through 2025. The errors were discovered on 1/10/26; the 2025 books are still open. Correcting journal entries would include what entry to 1/1/25 Retained Earnings?

Answers

Answer:

$10,000 credited

Explanation:

DATA

Machine cost = 510,000

Salvage value = $60,000

Useful life = 6 years

Depreciation = $60,000/6years

Depreciation = $10,000

It means that we have overstated depreciation expense for the year with the amount of $10,000.

Retained earnings will be credited by $10,000 As the depreciation expense was overstated mistakenly by $10,000

Barb bought a house with 20% down and the rest financed by a 30-year mortgage with monthly payments calculated at a nominal annual rate of interest 8.4% compounded monthly. She notices that one-third of the way through the mortgage she will still owe 200,000. Determine the purchase price of the house.

Answers

Answer:

$282,706

Explanation:

Calculation to Determine the purchase price of the house

First step

In order for us to determine the purchase price of the house we would be using TVM Calculation to find the PMT

Hence,

PMT =

PV = 200,000

FV = 0

N = 240

I = 0.084/12

Thus,PMT = $1,723.01

The Second step will be to Calculate the Loan Amount Using TVM Calculation,

PV =

FV = 0

PMT = -1,723.01

N = 360

I = 0.084/12

Thus, PV = $226,164.98

Last step is to Determine the purchase price of the house

Using this formula

Purchase price=PV/(100%-20% down)

Let plug in the formula

Purchase price =226,164.98/(0.80)

Purchase price = $282,706

Therefore the purchase price of the house will be $282,706

Sheffield Corp. budgeted costs for 45000 linear feet of block are: Fixed manufacturing costs$24000 per month Variable manufacturing costs$16 per linear foot Sheffield installed 30000 linear feet of block during March. How much is budgeted total manufacturing costs in March

Answers

Answer:

Manufacturing cost =$744,000

Explanation:

The total manufacturing cost is the sum of the variable manufacturing cost and the fixed manufacturing cost.

Manufacturing cost = variable cost + Fixed cost

This can be represent using the formula below

Y = bx + a

Y -Manufacturing cost

b- Variable cost per unit

a- Fixed cost

X- number of units

Y = (45,000× 16) + 24,000 = $744000

Budgeted Manufacturing cost =$744,000

Answer:

The answer is $504,000

Explanation:

Budgeted total manufacturing cost is the total variable cost and fixed cost the company had calculated for the production of a particular product.

Budgeted total manufacturing costs in March is:

(Variable manufacturing cost x Linear feet installed) + Fixed manufacturing cost

($16 x 30,000 linear feet) + $24,000

= $480,000 + $24,000

=$504,000

Kate is in the 15% tax bracket and has $29,000 available for investment during her current tax year. Assume that she remains in the same tax bracket over the next 11 years, and determine the accumulated amount of her investment after taxes if she puts the$29,000 into the following. (Round your answers to the nearest cent.)(a) a tax-deferred annuity that pays 4%/year, tax deferred for 11 years$ (b) a taxable instrument that pays 4%/year for 11 years

Answers

Answer and Explanation:

The computation is shown below:

a. The Accumulated amount of her investment atter taxes is

Before that first we have to determine the future value which is shown below:

As we know that

Future value = Present value × (1 + interest rate)^number of years

= $29,000 × (1 + 0.04)^11

= $44,644.17

And, the tax rate is 15%

So, the after tax value is

= $44,644.17 × (1 - 0.15)

= $37,947.54

b. Now for the second part it is

= Annual cash flows × Annuity factor at 3.4% for 11 years

= $29,000 × 10.638

= $308,502

A company would like to evaluate two incentive schemes that take effect once the worker exceeds standard performance. In the first case the benefits are split 30% to the worker and 70% to the company up to 120% performance. If the worker exceeds 120% performance, all of the earnings go to the worker. In the second case, all earnings beyond standard performance are split 50/50 between the worker and the company.
a. Plot the earnings for each scheme.
b. Derive the equations for worker earnings and normalized unit labor costs for each scheme
c. Find the point at which the two plans break even.
d. Which do you think would the company prefer?

Answers

Answer:

B) plan 1 : worker earning  y = x - 0.14  ,  unit labor = [tex]\frac{x-(0.14)}{x}[/tex]

   plan 2 : worker earning y  = 0.5x + 0.5, unit labor = (0.5x + 0.5) / x

C) At 128%

D ) plan D IS PREFERABLE

Explanation:

In the first case Benefits are split : 30% to worker , 70% to company ( up to 120% ) performance

In the second case benefits 50% go to the worker and 50% go the company

B) The equations for worker earnings and normalized unit labor costs for each scheme

Plan 1 :

y  ( percentage earning of worker ) = 1

unit labor cost = Y / 1

y = 0 - 30

unit labor = 0.3 / x

y = x - 0.14  therefore unit labor = [tex]\frac{x-(0.14)}{x}[/tex]

plan 2 :

y  ( percentage earning of worker ) = 1,   y  = 0.5x + 0.5

unit labor cost :  Y / 1  =  (0.5x + 0.5) / x

C )  The point at which the two plans break even

0.5x + 0.5 = x - 0.14

0.5 + 0.14 = x - 0.5x

0.64 = x(1 - 0.5 )

x = 0.64 / 0.5 =  1.28 = 128%

D) The company would prefer plan 1

Data related to the inventories of Costco Medical Supply are presented below: Surgical Equipment Surgical Supplies Rehab Equipment Rehab Supplies Selling price $ 276 $ 134 $ 354 $ 152 Cost 156 136 255 152 Costs to sell 17 17 16 7 In applying the lower of cost or net realizable value rule, the inventory of surgical supplies would be valued at:

Answers

Answer:

$117

Explanation:

Costco Medical Supply's merchandise inventory:

                  Surgical equip.  Surgical supplies  Rehab equip.  Rehab  supplies

Selling price          $276              $134                   $354                    $152

Cost                        $156              $136                   $255                    $152

Cost to sell               $17                 $17                      $16                       $7

Net realizable V.   $259              $117                   $338                    $145  

 

If we apply the lower of cost or net realizable rule for determining the value of surgical supplies, its value would be: $117 < $136

When we use the lower of cost or net realizable rule, we should value our inventory at the lowest value between original purchase cost and current net realizable value of the products.

How much will be in the Prepaid Insurance account at the end of the year, after the adjusting entries have been prepared and posted

Answers

Answer: $8,400

Explanation:

The $9,600 is for 2 years in advance. This can be apportioned per month at a rate of;

= 9,600/24

= $400 per month.

October to the end of the year is 3 months so;

= 400 * 3

= $1,200 will be recorded for the year.

Prepaid Insurance will therefore reduce to;

= 9,600 - 1,200

= $8,400

Skyline Corp. will invest $210,000 in a project that will not begin to produce returns until the end of the 3rd year. From the end of the 3rd year until the end of the 12th year (10 periods), the annual cash flow will be $46,000. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Calculate the net present value if the cost of capital is 12 percent.

Answers

Answer:

$-2,801.13

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Cash flow in year 0 = $-210,000

Cash flow each year from year 1 to 2 = 0

Cash flow each year from year 3 to 12 = $46,000.

I = 12%

NPV = $-2,801.13

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

A management control system is a logical integration of techniques to gather and use data and to evaluate performance.

a. True
b. False

Answers

Answer:

The correct answer is the option A: True.

Explanation:

To begin with, a management control system is understood as an ensemble of different subsystems that work with each other in order to cooperate to do the task and obtain the objectives that the user is looking for. In this case in particular, this type of system focus primarily in the objective of gathering data with the purpose of using it to evaluate the performances of the members of the organization so that would help the manager to take decisions when he has to. That is why that this system is a logical integration of techniques that would ensemble data to be used.

If a company reorganizes its operation to gain efficiency, the cost associated with this reorganization is classified as

Answers

Answer: Restructuring cost

Explanation:

Restructuring cost could be described as making expenses on rejuvenating or reviving or rebranding the company through spendings, which affects most of it's mode of operations, brings a change and innovation and ways to improve existing methods. This is capital intensive due to the work and changes required during the process.

Hannah Co. has 10,000 shares of $10 par common stock outstanding. A 10% stock dividend is declared when the market price is $50 per share.Following the stock dividend, a cash dividend of $4 per share is declared and paid to Hannah Cos' shareholders. The debit to Retained Earnings will be:

Answers

Answer:

Hannah Co.

The debit to Retained Earnings will be:

$44,000

Explanation:

Common Stock outstanding = 10,000 shares of $10 par

With a 10% stock dividend, the outstanding shares increase to 11,000 (10,000 x 1.1).

The cash dividend per share = $4

Total cash dividend equals $44,000 ($4 x 11,000).

So the Retained Earnings will be debited to the sum of $44,000 following the cash dividend to reduce the Retained Earnings account by $44,000.

E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 44,000 units per month is as follows:

Per Unit
Direct materials $44.60
Direct labor $8.50
Variable manufacturing overhead $1.50
Fixed manufacturing overhead $18.10
Variable selling & administrative expense $2.60
Fixed selling & administrative expense $12.00

The normal selling price of the product is $94.10 per unit. An order has been received from an overseas customer for 2,400 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.60 less per unit on this order than on normal sales.

Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $80.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:_______

Answers

Answer:

financial advantage for accepting special order = $59,520

Explanation:

relevant production costs for special order (2,400 units):

direct materials $44.60

direct labor $8.50

variable manufacturing overhead $1.50

variable selling & administrative expense $1

total costs per unit = $55.60

total revenue from special order = 2,400 x $80.40 = $192,960

relevant costs associated to special order = 2,400 x $55.60 = ($133,440)

financial advantage for accepting special order = $59,520

Seminole Corporation common stock currently sells for $32 per share. The firm recently paid a dividend of $1.25 per share. Flotation costs for new external equity are $3 per share. Analysts have forecast that earnings and dividends will grow at an average annual rate of 7% percent well into the future. What is the company's cost of internal equity?

Answers

Answer:

The cost of internal equity is 11.18%

Explanation:

The constant growth model of DDM can be used to calculate the price of a stock if the growth rate in the dividend is expected to remain constant. The DDM values the stock based on the present value of the expected future dividends from the stock.

The formula for price today under DDM is,

P0 = D0 * (1+g) / r - g

We already know the P0, the D0 and the g. We can plug in these values in the formula to calculate r which is the cost of equity capital.

32 = 1.25 * (1+ 0.07)  /  (r - 0.07)

32 * (r - 0.07) = 1.3375

32r - 2.24 = 1.3375

32r = 1.3375 + 2.24

r = 3.5775 / 32

r = 0.11179 or 11.179%

Amy and Maxwell Walker have decided to invest their investment dollars: 40 percent in stocks, 30 percent in bonds, and 30 percent in cash equivalents. Over the past year, the market value of their bonds increased while the market value of their stocks declined. Using the asset allocation model, they should now

Answers

Answer:

C.use some of their cash equivalents to buy more stocks.

Explanation:

Data provided in the question

Stock = 40%

Bond = 30%

cash equivalent = 30%

The Market value of the bond rise

The market value of the stock falls

Based on the above information,

According to the asset allocation model, mostly everyone uses some of their cash equivalents i.e bank account, marketable securities to purchased more stock

Hence, the option c is correct

NIKE, Inc., is the best-known sports shoe, apparel, and equipment company in the world because of its association with athletes such as LeBron James, Roger Federer, and Madison Keys. Some of the items included in its recent statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the statement or use (NA) if the item does not appear on the statement.1. Additions to long-term debt.2. Depreciation3. Additions to equipment.4. Increase (decrease) in notes payable. (The amount is owed to financial institutions.)5. (Increase) decrease in other current assets6. Cash received from disposal of equipment.7. Reductions in long-term debt.8. Issuance of stock.9. (Increase) decrease in inventory.10. Net income

Answers

Answer and Explanation:

The statement of cash flow involves 3 kinds of activities mentioned below:

1. Operating activities: Many transactions are based that affect the working capital following net income. It would increase the growth in current assets and a decrease in current liabilities, whereas adding the decrease in current properties and an increase in current liabilities.

This should mitigate any work capital shifts. Furthermore, the cost of depreciation is attributed to the net income and the loss on the sale of assets is attributed while the benefit on the sale of assets is deducted

2. Investing: it monitors activities involving the acquisition and selling of long-term assets. The purchase is cash outflow while the selling is cash inflow

3. Financing activities: it monitors activities that impact on the shareholders' long-term debt and equity balance. Share issue is cash inflow whereas cash outflows are redemption and dividend.

Therefore based on the above explanation, the classification is as follows

1 Financing Activity

2. Operating activity

3 Investing activity

4  Financing Activity

5  Operating activity

6 Investing activity

7  Financing Activity

8  Financing Activity

9  Operating activity

10  Operating activity

Read the scenario, and answer the question.You are a manager attending a presentation about conflict resolution. You notice that the speaker seems at ease and comfortable in front of a large audience. You are to talk to the speaker and ask her what she does to be so relaxed. After the presentation, you decide Choose the best response the speaker could give in the scenario above.
a. I read from my notes and make sure the room is darkened.
b. I just go into a room and say what is on my mind.
c. I rehearse repeatedly and practice stress reduction techniques

Answers

Answer: I rehearse repeatedly and practice stress reduction techniques

Explanation:

The best response that the speaker can give will be that "rehearse repeatedly and practice stress reduction techniques".

By rehearsing repeatedly and practice stress reduction techniques, one will be at ease and comfortable in front of a large audience.

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.
Raw Materials Inventory 7/1/19 $48,100
Factory Insurance $4,700
Raw Materials Inventory 6/30/20 39,700
Factory Machinery Depreciation 16,100
Finished Goods Inventory 7/1/19 96,100
Factory Utilities 28,700
Finished Goods Inventory 6/30/20 19,900
Office Utilities Expense 8,550
Work in Process Inventory 7/1/19 19,900
Sales Revenue 555,000
Work in Process Inventory 6/30/20 19,900
Sales Discounts 4,300
Direct Labor 139,350
Plant Manager’s Salary 61,100
Indirect Labor 24,560
Factory Property Taxes 9,610
Accounts Receivable 27,100
Factory Repairs 1,500
Raw Materials Purchases 96,500
Cash 32,100
Required:
Prepare an income statement through gross profit.

Answers

Answer:

Clarkson Company

Income statement for the year ended June 30, 2020

Sales Revenue                                                               $555,000

Less Costs of Goods Sold :

Opening Finished Goods Inventory            $96,100

Add Cost of Goods Manufactured            $390,520

Less Closing Finished Goods Inventory    ($19,900)  ($466,720)

Gross Profit                                                                       $83,280

Explanation:

First prepare a Schedule of Manufacturing Costs to determine the Cost of Goods Manufactured.

Schedule of Manufacturing Costs

Factory Insurance                                                      $4,700

Raw Materials ($48,100 + $96,500 - $39,700)    $104,900

Factory Machinery Depreciation                              $16,100

Factory Utilities                                                        $28,700

Direct Labor                                                            $139,350

Plant Manager’s Salary                                             $61,100

Indirect Labor                                                          $24,560

Factory Property Taxes                                             $9,610

Factory Repairs                                                          $1,500

Add Opening Work In Process Inventory              $19,900

Less Closing Work In Process Inventory              ($19,900)

Cost of Goods Manufactured                              $390,520

Do you believe the cash flows from investing activities should include not only the return of investment, but also the return on investment, that is the interest and dividend revenue?

Answers

Answer:

Yes. Cash flows from investing activities should also include return on investment.

Explanation:

Dividend and Interest revenue arise as a result of the Investments that were made by the company and as such constitutes cash flow from investing activities of a Company.

The face value is $81,000, the stated rate is 10%, and the term of the bond is eight years. The bond pays interest semiannually. At the time of issue, the market rate is 8%. What is the present value of the bond at the market rate?


Present value of $1:
4% 5% 6% 7% 8%
15 0.555 0.481 0.417 0.362 0.315
16 0.534 0.458 0.394 0.339 0.292
17 0.513 0.436 0.371 0.317 0.270
18 0.494 0.416 0.350 0.296 0.250
19 0.475 0.396 0.331 0.277 0.232

a. $91,561
b. $47,773
c. $43,673
d. $84,788

Answers

Answer:

The Present Value of the bond at the market rate = $90,438.36  

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).  

Value of Bond = PV of interest + PV of RV  

The value of bond can be worked out as follows:  

Step 1  

PV of interest payments  

Semi annul interest payment  

= 10% × 81000 × 1/2 = 4050

Semi-annual yield = 8%/2= 4 % per six months  

Total period to maturity (in months)  

= (2 × 8) = 16 periods (Note the bond term is 8 yeras)  

PV of interest = 4050 × (1-1.04^(-16))/0.04 = 47,191.79

Step 2  

PV of Redemption Value  

Assuming a redemption value equals to the nominal value =

PV of RV = 81,000 × 1.04^-16 =  43,246.56  

Step 3 :Total Present Value

Total prent value =  43,246.56  + 47,191.79721  =  90,438.36

The Present Value of the bond at the market rate = $90,438.36  

You own two bonds. Both bonds pay annual interest, have 7 percent coupons, and currently have 7 percent yields to maturity. Bond A has 5 years to maturity and Bond B has 10 years to maturity. If the market rate of interest changes unexpectedly to 6 percent, the price of Bond A will change by _____ percent and the price of Bond B will change by _____ percent.

Answers

Answer:

the price of Bond A will change by 4.21% and the price of Bond B will change by 7.36%.

Explanation:

Bonds A and B

current bond price $1,000

interest rate 7%

Bond A matures in 5 years, annual payments

Bond B matures in 10 years, annual payments

if market interest decreases to 6%

Bond A:

$1,000 / (1 + 6%)⁵ = $747.26

$70 x 4.2124 (annuity factor, 6%, 5 periods) = $294.87

market price = $1,042.13

% change = 4.21%

Bond B:

$1,000 / (1 + 6%)¹⁰ = $558.39

$70 x 7.3601 (annuity factor, 6%, 10 periods) = $515.21

market price = $1,073.60

% change = 7.36%

The advantages of using typedef do not include:a. Making programs more portable by allowing data types to be easily changed to meet system specifications.b. Making type names shorter.c. Making programs more readable.d. Increasing the efficiency of accessing struct member variables.

Answers

Answer:

d. Increasing the efficiency of accessing struct member variables.

Explanation:

In the programming language C and C++ there is a keyword i.e typedef that function is to provide a new name. It is to be used to develop an extra name for the other data type but it does not develop a new data type

Here the advantage of using typedef is as follows

1. It allows the data types for meeting the specifications of the system

2. The name would become shorter

3. Readable program

but it does not increase the efficiency

Hence, the last option is correct

A company's strategy evolves over time as a consequence of : Select one: a. The need to keep strategy in step with changing market conditions and changing customer needs and expectations b. The proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy c. The need to respond to the newly-initiated actions and competitive moves of rival firms d. All of the above

Answers

Answer:

The correct answer is the option D: All of the above.

Explanation:

To begin with, a company's primary strategy that focus on completing the main goal of the company of increasing the sales and with that the profits is considered to be the most important element that the business has in order to keep existing and therefore that as the time passes and the context around the organization changes, that strategy evolves. And there are a lot of reasones why that could happen, including the market conditions that vary over the pass of years as well as the need to react to the competitors decisions in order to keep fighting for the market. And other consequence that may help the change of the strategy is the effort itself of managers to make the strategy better as ideas turn to came out.

A stock has a beta of 1.28, the expected return on the market is 12 percent, and the risk-free rate is 4.5 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer:

Expected return on stock =14.1 0%

Explanation:

The Capital Asset pricing Model (CAPM) can be used to determined the expected return on the stock.  

According to the Capital Asset pricing Model the expected return on stock  is dependent on the level of reaction of the the stock to changes in the return on a market portfolio.

These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.  

Under CAPM, Ke= Rf + β(Rm-Rf)  

Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market, Ke-return on stock

Using this model, we can work out the return on stock as follows:

DATA

Ke-?

Rf- 4.5%

β-1.2 8

Rm- 12%

Ke = 4.5% + 1.28× (12-4.5)%=14.1 0%

Expected return on stock =14.1 0%

rdier attached to a life insurance policy that provides coverage on the insureds family members is called the

Answers

Answer: Other insured rider

Explanation:

The rider that is attached to a life insurance policy that provides coverage on the insureds family members is referred to as the other insured rider.

When more than one member of a particular family is to be provided insurance for, this type of rider is typically used.

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