Answer: $168,000
Explanation:
Cash balance at the end of the year = Cash Inflows - Cash outflows
Cash Outflows
= (Merchandise purchased - Account payables) + Salaries + Interest + Insurance
= (235,000 - 38,700) + 28,100 + 2,600 + 8,900
= $235,900
Cash Inflows
= (Sales - Accounts receivables) + Investment by partners + Amount borrowed
= (378,000 - 47,000) + 47,000 + 26,000
= $404,000
Cash Balance = $168,000
Note: The options are most probably for a similar question.
Answer:
(a) What is the yield to maturity (annual compounding) on the bond?
Yield to maturity (YTM) = (face value / market price)¹/ⁿ - 1
YTM = ($1,000 / $800)⁰°² - 1 = 0.0456 or 4.56%
(b) Assume the yield to maturity on comparable zeros increases to 7% immediately after purchasing the bond and remains there. Calculate your annual return (holding period yield) if you sell the bond after one year.
holding period yield = (end of period value - initial value) / initial value
initial value = $800
end of period value = ?
to determine the end of period value we must solve:
7% = ($1,000 / ?)⁰°²⁵ - 1
1.07 = ($1,000 / ?)⁰°²⁵
1.07⁴ = $1,000 / ?
? = $1,000 / 1.3108 = $762.90
holding period yield = ($762.90 - $800) / $800 = -4.64%
(c) Assume yields to maturity on comparable bonds remain at 7%, calculate your annual return if you sell the bond after two years.
1.07³ = $1,000 / ?
? = $1,000 / 1.225 = $816.30
holding period yield = ($816.30 - $800) / $800 = 2.04%
annualized return = (1 + total return)¹/ⁿ - 1 = (1 + 0.0204)¹/² - 1 = 1.01%
(d) Suppose after 3 years, the yield to maturity on similar zeros declines to 3%. Calculate the annual return if you sell the bond at that time.
1.03² = $1,000 / ?
? = $1,000 / 1.0609 = $942.60
holding period yield = ($942.60 - $800) / $800 = 17.83%
annualized return = (1 + total return)¹/ⁿ - 1 = (1 + 0.1783)¹/³ - 1 = 5.62%
This business related question deals with the calculation and understanding of yield to maturity and holding period yield related to a zero-coupon Treasury bond. The yield to maturity is the estimated total return if a bond is held until it matures. The holding period yield is dependent on the current market conditions and may alter if the bond is sold before it reaches its maturity.
To answer these questions, you first need to understand key concepts related to bonds. A zero-coupon bond is a bond that doesn't give regular interest payments to the investor. Instead, the investor purchases the bond for a price lower than its face value, then receives the face value when the bond reaches maturity. The difference represents the investor's profit.
Let's handle each sub-question in the context of a five-year zero-coupon Treasury bond that you bought for $800 but has a face value of $1000:
a) The yield to maturity (YTM) is the total return anticipated on a bond if it is held until it matures. Yield to maturity is expressed annually as a percentage. In this case, the equation to solve for yield to maturity is: $1,000 = $800*(1+YTM)^5. Normally, it's impossible to directly solve this equation for YTM (without using calculators or software with financial functions), making it a more complex business topic.
b & c) The holding period yield is different than the yield to maturity and takes into account the current market conditions. In this scenario, if interest rates were to rise to 7%, the bond's value would decrease, impacting your returns if you decided to sell before maturity.
d) The same concept applies if yield to maturity changes after 3 years or at any other time before maturity. An alteration in the market interest rates would affect the price at which you could sell your bond, hence influencing your annual return.
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If viewed from a flow standpoint, the stage of configuration management that has provision for variable routing to the next step, depending on outcome at this stage, configuration control.
What is configuration control?
Process for regulating hardware, software, firmware, and documentation alterations to safeguard the information system from unauthorised alterations before, during, and after system deployment. In military and technology development environments, configuration control is frequently employed. By making sure that any changes are thoroughly tested before being incorporated into the finished product, it can lower the likelihood of failure or malfunction.
What does the configuration serve?
The process of configuration management involves keeping software, servers, and computer systems in a consistent, desirable condition. It's a method of ensuring that a system functions as expected as modifications are made to it over time.
To know more about configuration control, click here- brainly.com/question/29736870
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Answer:
The wage per hour must be paid in the second year is $11.021 per hour.
Explanation:
Please find the below for detailed explanations and calculations:
We have the real wage stipulated in the contract must be grown at 3% in second year in comparison to first year.
Thus, the nominal pay rise must grow at the higher rate than 3%, in the way that it may cover the effect from inflation to ensure real rise is 3% as agreed in the labor contract.
As a result: Nominal increase (%) = (1+ real increase rate) x CPI of second year in comparison to first year - 1 = (1+3%) x 1.07 -1 = 10.21%.
=> Wage per hour must be paid in the second year = Wage per hour in first year x ( 1 + Nominal increase) = 10 x (1 + 0.1021) = $11.021.
b. How much debt and equity has the firm issued to finance its assets?
If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:
a. Overstate its earnings
b. Understate its earnings
Answer:
1. The financial statement that would be the most helpful for a finance professional to evaluate how a firm's performance is:
a. How much cash is a firm generating through operating, investing, and financing activities?
2. If compensation for senior management is based on short-term performance of the firm, in the short run the firm is likely to:
a. Overstate its earnings
Explanation:
This financial statement is provided by the Statement of Cash Flows. The statement provides the performance report about a company's liquidity and long-term solvency. The information about how much debt and equity the firm has issued to finance its assets will be obtained from the statement of financial position (known as the balance sheet). This statement does not show the performance of a firm, but its financial position as of a given date.
Answer:
this special order will result in a $2,637 profit, so the company should accept it
Explanation:
special order for 26 gold bracelets
discounted price of $367 per unit
normal production costs:
costs related to the special order
increase in direct materials = $7 per unit, total of $150 per unit
direct labor $90 per unit
variable overhead = $8 per unit
machine used for this project only $457
revenue generated by special order:
total revenue $9,542
- variable costs ($6,448)
- special machine ($457)
profit from special order $2,637
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
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.
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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