BUSINESS COLLEGE

Atom Endeavour Co. issued $17 million face amount of 12.0% bonds when market interest rates were 13.38% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds

Answers

Answer 1

Answer:

Answer:

$2,040,000

Explanation:

Annual Interest calculation

Interest = Par/Face Value × Coupon Rate

= $17,000,000 × 12.0%

= $2,040,000

Therefore, interest to be paid annually on these bonds is $2,040,000.

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The skill you’re focusing on this week is:

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could you explain some more please

A 15-year annuity pays $1,300 per month, and payments are made at the end of each month. The interest rate is 10 percent compounded monthly for the first six years and 8 percent compounded monthly thereafter. What is the present value of the annuity

Answers

Answer:

162075.97 dollars.

Explanation:

The time period of annuity = 15 years

Annuity amount = $1300 per month

The interest rate for the first six-year = 10%

Monthly interest rate = 10% / 12 = 0.83%

Thus number pf periods = 6 * 12 = 72

Interest rate for another 9 years = 8%

Monthly interest rate = 8% / 12 = 0.67%

Number of period = 8 * 12 = 96

Use the below formula to find the present value of the annuity.

$\text{Present value of annuity} =(A(1-(1+r)^(-n)))/(r) \n\n= (1300(1-(1+0.0083)^(-72)))/(0.0083) + (1300(1-(1+0.0067)^(-96)))/(0.0067) \n= 162075.97 dollars.$

EA8. LO 2.2Suppose that a company has fixed costs of $18 per unit and variable costs $9 per unit when 15,000 units are produced. What are the fixed costs per unit when 12,000 units are produced?

Answers

Answer:

$22.5 per unit

Explanation:

Given that,

When 15,000 units produced,

Company has fixed costs per unit = $18 per unit

Company has variable cost per unit = $9 per unit

Therefore,

Total fixed cost at 15,000 units:

= 15,000 units × $18 per unit

= $270,000

Per unit Fixed cost at 12,000 units:

= Total fixed cost ÷ 12,000 units

= $270,000 ÷ 12,000 units

= $22.5 per unit

Final answer:

To find the fixed costs per unit when 12,000 units are produced, divide the total fixed costs by the number of units produced at that level.

Explanation:

To find the fixed costs per unit when 12,000 units are produced, we first need to calculate the total fixed costs at 15,000 units and then divide it by 15,000 to find the fixed cost per unit at that level of production. Given that the fixed costs are $18 per unit at 15,000 units, the total fixed costs at that level would be 15,000 units multiplied by $18, which equals $270,000. To find the fixed costs per unit at 12,000 units, we divide the total fixed costs of $270,000 by 12,000 units, resulting in a fixed cost per unit of $22.50.

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Assume that demand for a service depends upon price and income, where the price elasticity of demand is Ep = –0.6 and income elasticity is Ey = 1.2. If price falls by 4% and income rises by 2%, the quantity demanded of the service will _____. (a)-falls by 2.4%
(b)-falls by 9.6%
(c)-not affected since the price change and income change will exactly offset one another.
(d)-increase by 6%
(e)-increase by 4.8%

Answers

Answer:

Increase by 4.8%

Explanation:

The 4% price reduction will cause an increase in demand by 2.4%.

$\Delta Q/Q=\epsilon_p*\Delta P/P=(-0.6)*(-0.04)=0.024$

The 2% rise in income will cause an increase in demand by 2.4%

$\Delta Q/Q=\epsilon_I*\Delta I/I=(1.2)*(0.02)=0.024$

If we take into account both variations and add them, we have an increase in demand by 2.4%+2.4% = 4.8%

Perfect Fit Company sells men's shirts and jeans. The average selling price and variable cost for each product follow: Selling price per shirt $22 Selling price per jean $27 Variable cost per shirt $14 Variable cost per jean $19 Fixed costs $3,200 Calculate the breakeven point in units assuming the sales mix is 1:1.

Answers

Answer:

Jeans= 200 units

Shirt= 200 units

Explanation:

To calculate the break-even point in units, we need to use the following formula:

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)

Weighted average contribution margin= (22*0.5 + 27*0.5) - (14*0.5 + 19*0.5)

Weighted average contribution margin= 8

Break-even point (units)= 3,200/8

Break-even point (units)= 400 units

Jeans= 0.5*400= 200 units

Shirt= 0.5*400= 200 units

The adjusted trial balance of Sunland Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2022: Sales Revenue $903,400; Freight-Out $13,700; Sales Returns and Allowances $22,000; and Sales Discounts $15,400. Prepare the sales section of the income statement.