Recall British Consols first issued in 1700s are considered perpetuities. If a British Consol will pay 100 GBP annually starting one year from now and interest rate is 5%.

Required:
a. What is this asset worth today?
b. If interest rate is always 5%, what is the asset worth 3 year from now?
c. Does the asset appreciate or depreciate in value?
d. Do you have any return if you are holding an asset that does not change in value? What is your rate of return?

Answers

Answer 1

Answer:

a. Present value of perpetuity today = Perpetuity amount / Interest rate  = 100 / 0.05 = 2,000GBP. Thus, this asset worth 2,000GBP today

b. Value of perpetuity 3 years from now = Perpetuity amount / Rate = 100/.05 = 2000GBP. The asset worth 3 year from now is 2,000GBP.

c. Since this is a perpetuity; it neither appreciate nor depreciate in value provided the interest rate is constant.

d. There will be a return since we are getting cash-flows in a yearly basis; rate of return will be the interest rate = 5%


Related Questions

Calvin received bimonthly paychecks of $2007.25 last year. If 17.1% of his yearly income got withheld for federal income tax. How much got withheld for federal income tax from each of Calvin's paychecks last year?

Answers

Answer:

343$

Explanation:

2007.25-17.1%=1664.01025

2007.25-1664.01025 = 343.23975

Answer:

343.23

Explanation:

Green tea Oreos in China, chocolate and peanut butter Oreos in Indonesia, and banana dulce de leche Oreos in Argentina are examples of Kraft using ________ strategy.

a. an international
b. amultidomestic
c. a single country
d. a transnational

Answers

Answer:

a. an international

Explanation:

A company purchased a building for $850,000 on January 1, 2010. As of December 31, 2014, $200,000 of accumulated depreciation had been recorded related to this building. The building was sold to another party for $1,250,000 on January 1, 2015. On the sale of this building, the company should recognize:_______

a. A gain of $650,000
b. A loss of $650,000
c. A gain of $600,000
d. A loss of $600,000

Answers

Answer:

On the sale of this building, the company should recognize:_______

c. A gain of $600,000

Explanation:

a) Data and Calculations:

The cost for the Purchase of building on January 1, 2010 = $850,000

Accumulated depreciation as of December 31, 2014 =           200,000

Book value of building as of December 31, 2014 =               $650,000

Sale proceeds on January 1, 2015 =                                    $1,250,000

Gain from the sale of the building =                                      $600,000

what is the likely reason an investor in one state would buy local government bonds in another state

Answers

Explanation:

because unlike to another state is not the same there in Philippines a more education is quality and a projects and a good transformations are a big deal to us as a part of a responsible woman being and this world. And I thank you

ABAC Farms expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The total contribution margin is:

Answers

Answer: $125,000

Explanation:

The Contribution margin is the Sales revenue less the Variable cost.

Revenue

= 25,000 * 11

= $275,000

Variable costs

= 25,000 * 6

= $150,000

Total Contribution Margin

= 275,000 - 150,000

= $125,000

discuss types of assets? In two or three sentences.​

Answers

Answer:

Examples of assets include:

Cash and cash equivalents.

Accounts Receivable.

Inventory. It is often deemed the most illiquid of all current assets - thus, it is excluded from the numerator in the quick ratio calculation.

Investments.

PPE (Property, Plant, and Equipment) ...

Vehicles.

Furniture.

Patents (intangible asset)

In determining compensation strategy, a major strategic decision is whether to mirror competitors pay.

a. True
b. False

Answers

Answer:

True

Explanation:

Compensation is the amount that is paid to an employee for work done or services rendered. It is monetary and non monetary payment that is given to a worker.

For compensation to be attractive to employees, it needs to be comparable to compensation of other competitors in the industry.

This will reduce the rate at which employees move to other companies.

But when compensation nos lower in a company they stand the risk of losing their workers to other companies that offer better pay

Mr. David decision to increase inventory holdings resulted from the consistent pressure of Golden Cup’s Board of Directors to increase amount of inventories. Mr. David’s own opinion was that Golden cup is holding enough inventory to keep the business running without costing the company lots of money on inventory carrying costs. On the other hand, BOD believes that in such a dynamic industry, holding more inventory is necessary to keep smooth business operations.


Required:

a. How long does it currently take the company to turnover its inventory?

b. Do you agree with Mr. David’s opinion? Or, With the BOD? And why? Knowing that industry average inventory turnover is 8.

Answers

Answer:

the information is missing, so I looked for a similar question and found the attached image:

a) days inventory on hand = (average inventory / cost of goods sold) x 365 = ($14,000 / $120,000) x 365 = 42.58 days

b) inventory turnover ratio = cost of goods sold / average inventory = $120,000 / $14,000 = 8.57

I agree with Mr. David because the inventory turnover ratio of Golden Cup is already higher than the industry's average. That means that Golden Cup's current inventory level is appropriate and increasing it would only result in higher costs but would have very little influence on the company's sales.

list sevn important of accounting and keeping​

Answers

Answer:

Accounting/bookkeeping

1. The income statement provides you with information about the profit and loss

2. The balance sheet gives you a clear picture on the financial position of your business on a particular date.

3.  Bookkeeping is important because it helps you budget.

4. Tax Preparation. In most cases, your business has to file a tax return every year.

5. Organization. Being organized is a skill every business owner should have.

6. Analysis. Bookkeeping is important because it helps with business analysis.

7. Planning Purposes . Bookkeeping presents the past financial performance of your company.

Explanation:

Hope this helps, sorry if it is not

Suppose the reserve requirement ratio is 0.20 and the central bank carries out an open market sale of government bonds with Bank A in the amount of $20,000. Deposits at Bank A would

Answers

Answer:

Note: The complete question is attached below

When reserve ratio is 0.20, Deposits at Bank A would decrease by $20,000.00 and total ultimate impact on money supply would be a change of $-100,000.00 (= -$20,000 / 0.2), reflecting a money multiplier of 5.00 (= -$100,000 / -$20,000).

A bonds are defined as the securities under which the lender lend some money in order to earn regular interest amount. Therefore, Deposits at Bank A would be decreased.

What is the term Central Bank about?

Central banks are those banks that serve the country's banking system. They provide money transfers back and forth between banks and governmental institutions.

Solution:

When reserve ratio is 0.20, Deposits at Bank A would decrease by $20,000.00 and total ultimate impact on money supply would be a change of $-100,000.00 (= -$20,000 / 0.2), reflecting a money multiplier of 5.00 (= -$100,000 / -$20,000).

Learn more about central bank, refer to the link:

https://brainly.com/question/25247091

Yesteryear Productions pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $0.40 a share for two years commencing four years from today. After that time, the company plans on paying a constant $0.75 a share annual dividend indefinitely. How much are you willing to pay to buy a share of this stock today if your required return is 11.6 percent?

a. $3.78
b. $4.22
c. $4.37
d. $4.71
e. $4.98

Answers

Answer:

b. $4.22

Explanation:

The computation of the price that willing to pay is shown below:

But before that we need to do the following calculations

Terminal value at year 5 is

= 0.75 ÷ 0.116

= 6.46552

Now

Total cash flow is

= 6.46552 + .40

= 6.86552

And finally

Present value =(PVF at 11.6%,4 ×  D4 ) + (PVF at 11.6%,5 × CF5)

= (0.64468 × 0.40) + (0.57767 × 6.86552)

= 0.2579+ 3.9660

= $4.22

Hence, the correct option is b.

The most significant conceptual difference between the arbitrage pricing theory (i.e. APT or factor model) and the capital asset pricing model (CAPM) is that APT _____________.

a. places less emphasis on market risk
b. recognizes multiple unsystematic risk factors
c. recognizes only one systematic risk factor
d. recognizes multiple systematic risk factors

Answers

Answer:

Option C: Recognizes only one systematic risk factor

Explanation:

Arbitrage pricing theory (APT) is a theory of risk-return relationships gotten from no-arbitrage and considerations in large capital markets

APT was said to be developed by Steve Ross, 1976 and it uses "No-Arbitrage" Assumption. It was designed mainly to provide "economic" variables to the determination of asset pricing.

capital asset pricing model (CAPM) is simply a model that shows the required rate of return on a security to its systematic risk as taken up or measured by beta.

The Timberlake-Jackson Wardrobe Co. has 10.8 percent coupon bonds on the market with eight years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,129.70, what is the YTM?

Answers

Answer:

the yield to maturity is 8.50%

Explanation:

The computation of the yield to maturity is shown below:

Given that

Future value = $1,000

Present value = $1,129.70

PMT = $1,000 × 10.8% = $108

NPER = 8

The formula is shown below:

= RATE(NPER;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the yield to maturity is 8.50%

Hence, the yield to maturity is 8.50%

An examination of Hyong Corporation's inventory accounts revealed the following information:

Raw materials, June 1: 46,000 units
Raw materials, June 30: 51,000 units
Purchases of raw materials during June: 185,000 units

Hyong’s finished product requires four units of raw materials. On the basis of this information, how many finished products were manufactured during June?

a. 70,500.
b. 45,000.
c. 57,750.
d. 47,500.
e. None of the other answers are correct.

Answers

Answer:

Production= 45,000 units

Explanation:

Giving the following information:

Raw materials, June 1: 46,000 units

Raw materials, June 30: 51,000 units

Purchases of raw materials during June: 185,000 units

First, we need to calculate the raw material used in production:

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 46,000 + 185,000 - 51,000

Direct material used= 180,000

Now, the production for the period:

Production= 180,000/4

Production= 45,000 units

Oriole's Copy Shop bought equipment for $458400 on January 1, 2020. Oriole estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2021, Oriole decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2021?

Answers

Answer:

the revised depreciation expense for 2021 is $61,120

Explanation:

The computation of the revised depreciation is shown below:

Annual Depreciation is

= $458,400 ÷ 3 years

= $152,800

Now the book value would be

= $458,400 - $152,800

= $305,600

Now the revised depreciation is

= $305,600 ÷ 5 years

= $61,120

Hence, the revised depreciation expense for 2021 is $61,120

Nick's Enchiladas has preferred stock outstanding that pays a dividend of $3 at the end of each year. The preferred sells for $55 a share. What is the stock's required rate of return (assume the market is in equilibrium with the required return equal to the expected return)?

Answers

Answer: 5.45%

Explanation:

The value of a preferred stock is calculated by the formula;

Value = Dividend / required return

Making required return the subject we have;

Required return = Dividend/ Value

= 3/55

= 0.05455

= 5.45%

HELP IM TIMED!!!!!!!!!
In the inheritance pattern incomplete dominance offspring demonstrate an intermediate form of alleles from the parents. True False

Answers

Answer:

F

Explanation:

Which ride hailing driver may take the standard mileage rate

Answers

Answer:

Ride hailing driver may take the standard mileage rate is explained below in detailed answer.

Explanation:

Standard mileage rates are not possible for:

1.Fleet industry operating more than 4 carriers together

2.If carriers are employed as industry articles

3.on carriers on which devaluation is claimed

Standard mileage rate is possible for the leased carrier in a situation that the standard rate is utilized for the entire life of the lease.

The standard rate may be possible to:

Danica has a three-year contract on her 2017 Honda Civic rendered she demands a standard rate for the whole lease life of the vehicle

1. What is the percentage change in the PV of $100 due in 1 year when the interest rate changes from 5% to 10%

Answers

Answer:

Percentage decreased by 4.5%

Explanation:

Present value for 5%

Present value for 5% = 100 / (1+5%)

Present value for 5% =100/1.05

Present value for 5% = $95.24  (Approx)

Present value for 10%

Present value for 10% = 100 / (1+10%)

Present value for 10% =100/1.1

Present value for 10% = $90.91   (Approx)

Percentage Change = [(90.91/95.24)-1]100

Percentage Change = -4.5%  

Percentage decreased by 4.5%

On December 31, 2019, Hamilton Inc. sold a used industrial crane for $1,000,000 cash. The original cost of the crane was $5.22 million and its accumulated depreciation equaled $4.31 million on December 31, 2019. What is the gain or loss from the December 31, 2019 equipment sale?a. $910,000 gain.b. $90,000 gain.c. $910,000 loss.d. $90,000 loss.

Answers

Answer:

Gain= $90,000

Explanation:

Giving the following information:

Selling price= $1,000,000

Original price= $5,220,000

Accumulated depreciation= $4,310,000

First, we need to calculate the book value:

Book value= purchase price - accumulated depreciation

Book value= 5,220,000 - 4,310,000

Book value= $910,000

Now, if the selling price is higher than the book value, the company gain from the sale:

Gain/loss= selling price - book value

Gain/loss= 1,000,000 - 910,000

Gain= $90,000

"Every individual necessarily labors to render the annual revenue of the society as great as he can. He generally indeed neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." – Adam Smith what this quote means

Answers

Answer:

This quote highlights Adam Smith - Self Interest, Free Reign, Invisible Hand theories

Explanation:

Adam Smith is the Father of Economics.

His self interest theory states that : Individuals working for the best of self interest implies maximum welfare for society as a whole.

Hence, the free reign idea suggests that people as 'self interest' guided rational economic agents should be left free. The invisible hand of market restores any distortions.

Government intervention is considered to be not only unnecessary, but distortionary.

Can someone please answer A-E please

Answers

I’m gonna need more point to answer that many questions L.mao

A perfectly competitive firm will be profitable if price at the profit-maximizing quantity is above: __________

a. ATC.
b. AVC.
c. AFC.
d. MC.

Answers

Answer:

A perfectly competitive firm will be profitable if price at the profit-maximizing quantity is above: __________

d. MC.

Explanation:

The general rule of profit maximization for a perfectly competitive firm is for the firm (and each firm in the market) to produce the quantity of output where the price (P) = marginal cost (MC).  In this case, the price (P) is a measure of the value that customers place on the good.   The marginal cost (MC) measures what it costs the firm to produce each marginal unit.

Johnson Motors' bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon rate is 8 percent. The bonds have a yield to maturity of 9 percent. What is the current market price of these bonds?

Answers

Answer:

$935.83

Explanation:

market price of the bonds:

PV of face value = $1,000 / (1 + 9%)¹⁰ = $422.41

PV of coupon payments = $80 x 6.4177 (PV annuity factor, 9%, 10 periods) = $513.42

current market price = $935.83

Since the market rate is higher than the coupon rate, the bonds will be sold at a discount.

Jessica saw an advertisement in the newspaper in which a company was selling its product in the local supermarket for $99, thus offering a discount of $25. Jessica considered it a good offer and bought the product. Later, Jessica came to know that the company sells the same product to direct consumers for $90. Which right was violated by this deceptive advertisement?
A.
right to choose
B.
right to redress
C.
right to be heard
D.
right to information
E.
right to safety

Answers

c: right to be heard

Answer: C

Explanation: right to be heard.

At age 48, Jamal set up a 401(k) where he plans to deposit $15,000 at the beginning of each year until age 70. Find the amount of the annuity if he invests in a stock fund that yields 6% compounded annually. *

Answers

Answer:

900,884.35

Explanation:

Deposit = 15,000

i = 6%

n = 1

t = 70 - 48 = 22

So, Fv = Deposit * (1+i/n)^n-t - 1 / i/n

Fv = 15,000 * (1+0.06)^22 - 1 / 0.06

Fv = 15,000 * (1.06)^22 - 1 / 0.06

Fv = 15,000 * 3.60353741658/0.06

Fv = 15,000 * 60.058956943

Fv = 900884.354145

Fv = 900,884.35

Hence, the amount of the annuity if he invests in a stock fund is $900,884.35

Career elements that might demand a career earn a high salary include:
decision making
stress level
responsibility
all of the above

Answers

Answer:

All of the Above

Explanation:

I took the test on edge and is 100% correct!

Career elements that might demand a career to earn a high salary include all of the above.

What is the meaning of a career?

You maintain the same line of employment when you have a career. A career can consist of one or several jobs. You may work for a single company or several. A "career path" is another name for a career. Education, training, and work experience are all components of a career.

A "career" seems to be a job or occupation that a person pursues a sizable portion of their life. Additionally, there are prospects for training, development, advancement, or promotion in the field. Careers include things like those in medicine, education, the church (or priests), and law enforcement.

Having a good job may add many benefits to your life, as it may allow you to live comfortably and provide stability for yourself and your family. A job can be important, as finding fulfillment in work can be important to our overall well-being.

Learn more about Career here:

https://brainly.com/question/30040900

#SPJ2

what is cash flow??????

Answers

Answer:

A cash flow is a real or virtual movement of money: a cash flow in its narrow sense is a payment, especially from one central bank account to another; the term 'cash flow' is mostly used to describe

Answer:

the answer above is right

Explanation:

two types of purchase orders.

Answers

Explanation:

blanket purchase order and contract purchase order

standard purchase order
blanket purchase order
contract purchase order
planned purchase order

Meadow Company produces hand tools. A sales budget for the next four months is as follows: March 10,800 units, April 13,300, May 16,100 and June 21,200. Meadow Company’s ending finished goods inventory policy is 20% of the following month’s sales. March 1 beginning inventory is projected to be 2,160 units. How many units will be produced in March?

Answers

Answer:

Production= 11,300 units

Explanation:

Giving the following information:

Sales:

March 10,800 units

April 13,300

Meadow Company’s ending finished goods inventory policy is 20% of the following month’s sales.

March 1 beginning inventory is projected to be 2,160 units.

To calculate the production for March, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

Production= 10,800 + (13,300*0.2) - 2,160

Production= 11,300 units

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