A new investment in a company is still being considered by applying...
A new investment in a company is still being considered by applying for a long-term debt of IDR 10 billion with an interest rate of 7% per annum (pa). The main expenditure of this investment is on equipment with a value of Rp9 billion and has the same economic life as the investment period of 8 years. The residual value of this equipment is estimated at Rp800 million and the selling price at the end of the investment period is Rp850 million. This equipment uses the straight line method of depreciation. The company invests working capital at the beginning of operations of Rp1 billion which is assumed to be recovered 100% every year during the investment period and if there is an excess at the end of the investment, this working capital can be sold.
With this new investment, it is estimated that sales will increase by Rp. 2.8 billion, which grows by 2% annually with additional operating expenses of Rp. 1.2 billion, which grows by 1.5% annually. It is known that the corporate income tax rate is 10% and the tax on asset sales is 15%.
Question : 1. Based on the data above, calculate 2 project feasibility indicators based on the concept of time value of money (TVM) with an opportunity cost of 8% pa, and 1 indicator without TVM. From these indicators, is this investment worth making?
2. Explain what funding strategy do you think is best to recommend to the Board of Directors in realizing the investment

Answers

Answer 1

Payback Period year 1 is -0.39 billion, year 2 is -0.372 billion and year 3 is 1.674,3

Two project feasibility indicators based on the concept of time value of money (TVM) with an opportunity cost of 8% pa are Net Present Value (NPV) and Internal Rate of Return (IRR).

a) NPV Calculation:

NPV = -Initial Investment + PV of Annual Cash FlowsPV of Annual Cash Flows = [tex][Revenue - Operating Expenses - Depreciation Expense - Interest Expense - Tax Expense] / (1 + 8)^n[/tex]

Using the given data, the initial investment is IDR 10 billion, and the annual cash flows for 8 years are as follows:

Year 1: (2.8 - 1.2 - 1 - 0.7 - 0.29) billion = -0.39 billionYear 2: (2.856 - 1.218 - 1 - 0.7 - 0.31) billion = -0.372 billionYear 3: (2.912 - 1.236 - 1 - 0.7 - 0.32) billion = -0.347 billionYear 4: (2.97 - 1.254 - 1 - 0.7 - 0.33) billion = -0.321 billionYear 5: (3.028 - 1.272 - 1 - 0.7 - 0.34) billion = -0.296 billionYear 6: (3.087 - 1.29 - 1 - 0.7 - 0.35) billion = -0.271 billionYear 7: (3.147 - 1.308 - 1 - 0.7 - 0.36) billion = -0.247 billionYear 8: (3.208 - 1.326 - 1.8 - 0.7 - 0.37) billion = -0.108 billion

NPV = [tex]-10 + [-0.39 / (1 + 8) + (-0.372 / (1 + 8)^2) + (-0.347 / (1 + 8)^3) + (-0.321 / (1 + 8)^4) + (-0.296 / (1 + 8)^5) + (-0.271 / (1 + 8)^6) + (-0.247 / (1 + 8)^7) + (-0.108 / (1 + 8)^8)][/tex]

NPV = -10 + 0.69

NPV = -9.31 billion

b) IRR Calculation:

IRR is the discount rate that makes the NPV equal to zero. Using the above cash flows, we can find the IRR using trial and error or the IRR function on a financial calculator or spreadsheet software. The IRR in this case is approximately 7.62%.

1 indicator without TVM is the Payback Period. The Payback Period is the length of time it takes for the initial investment to be recovered through net cash inflows.

Payback Period Calculation:

Year 1: (2.8 - 1.2 - 1 - 0.7 - 0.29) billion = -0.39 billion (Cumulative Cash Flow = -0.39)

Year 2: (2.856 - 1.218 - 1 - 0.7 - 0.31) billion = -0.372 billion (Cumulative Cash Flow = -0.762)

Year 3: (2.912 - 1.236 - 1 - 0.7 - 0 = 1.674,3

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Related Questions

nternationalization is the process by which a firm gradually changes in response to global competition; domestic market saturation; and the desire for expansion, new markets, and diversification. group of answer choices true false

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True. Internationalization is a common strategy adopted by firms to overcome domestic market saturation, expand into new markets, and achieve diversification. It involves gradually adapting to global competition and targeting international customers.

Making items easily localizable or translateable for usage in a range of worldwide markets is the aim of internationalization. This necessitates taking into account a variety of elements, such as the language that is used, cultural norms, date and time formats, currencies, and regulatory requirements. Instead of localisation being introduced as an afterthought, internationalization demands a proactive approach in the design and development of goods and services. Businesses may avoid costly mistakes, save time and money in the long term, and provide their foreign clients with superior service by thinking about internationalization from the start.

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Strong-form efficiency implies that mutual fund managers:
A. Buy the index that maximizes diversification and minimizes cost of managing portfolios
B. Actively seek under performing stocks and buy them
C. Fund mangers can consistently earn superior returns year after year
D. None of the above

Answers

Strong-form efficiency implies that mutual fund managers: D. None of the above

Mutual fund managers cannot consistently provide greater returns year after year, according to strong-form efficiency. (option C is incorrect). The strong-form efficiency hypothesis holds that no one has an information advantage since all information, both public and private, is completely represented in asset values. Therefore, even managers of mutual funds, can regularly generate abnormal returns through the purchase or sale of securities.

As a result, managers of mutual funds are unable to aggressively look for and purchase weak equities. (option B is incorrect). Instead, to mirror the performance of the market as a whole, many fund managers choose to purchase the index that maximises diversity and minimises the expense of maintaining portfolios (option A), such as through index funds.

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What is a State OSHA Program?
17. What do OSHA-approved state plans do?
18. How many sections does the OSH Act of 1970 contain?
19. How many Assistant Secretaries has OSHA had since 1971?
20. What are the Strategic Goals that the Department of Labor has in their Strategic Plan?
21. What currently are OSHA’s standards for accident investigation?
22. What is the ACCSH, and what is its responsibility?
23. What is one of the most hazardous industries in the nation?
24. What is an example of an airline industry hazard?
25. What is OSHA’s "Safety Pays" program?
26. How does OSHA deal with substance abuse in the workplace?
27. What resources do small businesses have to help with workplace substance abuse?
28. What does a comprehensive drug-free workplace program consist of?
29. How does the Alliance Program work with OSHA?
30. Why is ammonia considered a high health hazard?

Answers

A State OSHA Program is a: workplace safety and health plan approved by OSHA that operates at the state level.

OSHA-approved state plans enforce safety and health standards within their jurisdiction.

The OSH Act of 1970 contains 22 sections. Since 1971, OSHA has had 10 Assistant Secretaries.

The Department of Labor's Strategic Plan includes ensuring safe and healthy workplaces.

OSHA's current standards for accident investigation involve identifying hazards, root causes, and implementing corrective actions.

The ACCSH (Advisory Committee on Construction Safety and Health) advises the Assistant Secretary on construction safety and health regulations.

One of the most hazardous industries is construction. An airline industry hazard example is exposure to hazardous chemicals.

OSHA's "Safety Pays" program helps employers estimate the costs of workplace injuries and illnesses. OSHA addresses substance abuse in the workplace through guidelines, training, and resources.

Small businesses can access resources like OSHA's drug-free workplace kit.

A comprehensive drug-free workplace program includes policy development, employee education, and assistance programs.

The Alliance Program partners with OSHA to promote worker safety and health. Ammonia is considered a high health hazard due to its potential for causing severe respiratory injuries and other health issues.

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describe an advantage of the earn income tax program compared with minimum wage laws to support low-income workers.

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The Earned Income Tax Credit (EITC) and lowest pay laws are both policies sought at helping low-income staffers. One advantage of the EITC over minimum pay laws is to deliver motivation for work.

The EITC is a tax glory that is unrestricted to low-income employees who earn revenue from occupation. The honor is created to deliver an income accessory for working people and relatives who may be working to make ends satisfy.

One benefit of the EITC is that it delivers an inducement for people to work because the praise is only open to those who are utilized. This can help to enable people who may be on the wall about performing to join the struggle force, as they will obtain a monetary advantage for doing work.

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The Earned Income Tax Credit (EITC) program and minimum wage laws are both designed to support low-income workers, but there is an advantage of the EITC program over minimum wage laws.

The EITC is a tax credit for low- to moderate-income working individuals and families, which means that the amount of the credit increases as the individual or family's earned income increases up to a certain threshold. In contrast, minimum wage laws set a minimum hourly wage rate that employers must pay to their employees.

One advantage of the EITC program is that it provides a direct financial benefit to low-income workers without imposing any additional costs on employers. In contrast, minimum wage laws can increase labor costs for businesses, which may lead to reduced employment or hours for low-skilled workers, making it harder for them to find employment.

By providing a tax credit to low-income workers, the EITC incentivizes work while also supporting the financial well-being of those who may be struggling to make ends meet. Additionally, the EITC can be used to supplement the income of workers who are already earning more than the minimum wage, making it a more flexible tool for supporting low-income workers.

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question:
1What type of content is the best for driving revenue? (Go find the reports from the last social media manager to answer questions 1 through 5.)
2What types of posts get the most engagement? (Example: Advertisements, pictures, infographics etc.)
3What types of content are best for driving awareness?
4What content perfomed the best? Do you see any correlations? Look at the type of content, platform, number of posts etc.
5Do you see any correlations that might seem like cause-and-effect relationships even though they aren’t? (For example, it may seem that a certain type of content drives more engagement when, in fact, this is because that content was used more often than other types of content.)
6Did you change your content for holidays? What were the effects?
7Did any content perform poorly? Why do you think it failed to get the results you were expecting?
8What types of content did you use for this round? Why?

Answers

Video content is the best type of content for driving revenue, while pictures and videos get the most engagement. Educational or informative content works best for driving awareness. There is a correlation between posting frequency and engagement levels.

According to the reports from the previous social media manager, the best type of content for driving revenue is video content. Posts with pictures and videos tend to get the most engagement, followed by text-based posts and infographics. The best types of content for driving awareness are usually educational or informative content, such as blog articles or infographics.

Based on the reports, video content performed the best, particularly on social media platforms. There also seemed to be a correlation between the frequency of posting and engagement levels.  It's important to note that correlation does not always equal causation. For example, a certain type of content may appear to drive more engagement, but it could simply be because it was posted more frequently than other types of content.

The reports did not indicate whether content was changed for holidays or what the effects were. Some content may perform poorly due to a variety of factors, such as poor timing, lack of relevance to the target audience, or low-quality content.

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Identify and explain three basic ways that public policy issues
can be addressed by government under the system of federalism.
Provide an example for each.

Answers

Answer:

the three types of public policies are regulatory, restrictive and facilitating policies

Explanation:

At the federal level, public policies are enacted to regulate industry and business, to protect citizens at home and abroad, to aid state and city governments and people such as the poor through funding programs, and to encourage social goals.

Policy statements must be adopted by government institutions because (in American society) only the government is recognized as having legitimate authority to impose binding decisions on society.

Public policy is important because it affects almost every aspect of daily life, including education, healthcare and national security.

Laws such as the one that protects workers as well as things like the minimum wage rate or the number of hours an employee can work is all based on public policy.

I'm not sure tho

FINANCIAL MATHEMATICSPlease provide and explain how to calculate and get the answer exactly like this, using excel!If you can't give the exact answer i want to prove (answer I've already mentioned), please don't answer this question.Question :1. The semiannually-compounded discount rate (d2) which is equivalent to an interest rate of 9% p.a. monthly compounded (j12 is 9%) is ?

Answers

The semiannually compounded discount rate (d2) that is equivalent to a monthly compounded interest rate (j12) of 9% per annum is 4.4674%.

To calculate the semiannually compounded discount rate (d2) equivalent to a monthly compounded interest rate (j12) of 9% per annum, you can use the following formula:

[tex]d2 = (1 - j12/2)^2[/tex]

Here's how you can calculate this using Microsoft Excel:

Open a new Excel worksheet and label cell A1 as "j12" and cell B1 as "d2".In cell A2, enter the value "0.09/12" to calculate the monthly interest rate.In cell B2, enter the formula "(1-A2/2)^2" to calculate the semiannually compounded discount rate.Press Enter and the result will be displayed in cell B2.

The result should be 0.044674, which means that the semiannually compounded discount rate (d2) that is equivalent to a monthly compounded interest rate (j12) of 9% per annum is 4.4674%.

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The coverage of term insurance ends at the conclusion of the term but you can continue it if you have a renewable option with a premium increase due to your older age.

Answers

The given statement "The coverage of term insurance ends at the conclusion of the term but you can continue it if you have a renewable option with a premium increase due to your older age." is true because of its long term nature.

Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years. At the end of the term, the policy will expire, and coverage will cease unless the policyholder chooses to renew it. If the policy includes a renewable option, the policyholder can renew it for an additional term, typically at a higher premium rate due to their increased age.

The renewable option ensures that the policyholder has the option to continue coverage beyond the original term without the need for a new medical examination or underwriting process. It's essential to review the terms and conditions of your policy to understand the options available to you at the end of the term.

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when leanne realized she didn't have all the technical information she needed to answer the customer's questions, she made a call to her office. who would be most likely to provide appropriate assistance?

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Leanne realized she didn't have all of the technical information, sales support personnel would be most likely to provide appropriate assistance, option D.

Generally speaking, an effective job title will mention the broad term, the amount of experience, and any unique qualifications. Your job title will be optimised to appear in a broad search for similar positions when you use the generic phrase. By describing the degree of responsibility and prerequisite expertise, the level of experience will assist you in attracting the most qualified candidates.

Additionally, if your role requires specialty, think about incorporating that information in the job title. If you want people to click on your job posting, make sure they understand what it is before utilising internal titles, abbreviations, or acronyms.

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Complete question:

When Leanne realized she didn't have all of the technical information she needed to answer the customer's questions, she made a call to her office. Who would be most likely to provide appropriate assistance?

Select one:

A. an order getter

B. an order taker

C. her sales manager

D. sales support personnel

E. another salesperson

Leanne would likely call a technical expert or colleague from her office who has the necessary knowledge and expertise to assist with the customer's questions.

Leanne probably phoned her office to ask for help from a technical specialist, a colleague with the necessary expertise or experience, or a supervisor who could offer direction when she lacked the technical skills to respond to the customer's inquiries.

The specifics of the customer's enquiries would determine who she called, as would the internal organisation of her workplace, including the duties and tasks of her coworkers and their areas of expertise.

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A(n) ________ is a contractual arrangement in which an owner provides a user the right to use an asset for a specified period of time. (enter one word per blank)

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A lease is a contractual arrangement where a proprietor gives a client the option to involve a resource for a predetermined time frame. option (A) is correct.

A lease is an understanding of the utilization of business property between a landowner and an inhabitant. A deed of rent, as such a record is known, will frame both the occupant's and the landowner's liabilities, including who will be liable for paying for support and different harms to the property.

Thus, it is consent to pay cash in return for the option to utilize property, a design, a vehicle, or a piece of gear for a particular measure of time. Therefore, option (A) is right.

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This question is not complete, Here I am attaching the complete question:

A(n) ________ is a contractual arrangement in which an owner provides a user the right to use an asset for a specified period of time. (enter one word per blank)

(A) lease

(B) market

(C) capital

job conditions do not include . a. social interactions b. workplace safety c. supervision d. the work itself e. absenteeism

Answers

Social interaction is a dynamic series of social activities between people (or groups), in which participants adjust their behavior in response to that of their interaction partner.

There are four types of social interactions: accidental, recurring, regular, and controlled. A social transaction between two or more people is referred to as social interaction. These interactions are a primary focus of fundamental social research and analysis because they serve as the foundation for social structure. Dyads, triads, and larger social groupings can all be used to study social interaction. societal interactions are the foundation of societal structures and cultures. People create the laws, institutions, and systems they choose to live by interacting with one another. Those new to society are informed of the expectations via symbols.

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which action by the federal reserve is not considered to be one of its normal monetary policy tools?
a.buying Treasury securities
b.lowering the federal funds rate
c.making loans to banks at the discount rate
d.buying mortgage-backed securities

Answers

D. Buying mortgage-backed securities is not considered to be one of the normal monetary policy tools of the Federal Reserve. The Federal Reserve primarily uses the other three tools - buying Treasury securities, lowering the federal funds rate.

The action by the Federal Reserve that is not considered to be one of its normal monetary policy tools is buying mortgage-backed securities. This tool is known as Quantitative Easing (QE) and is only used in exceptional circumstances. QE is implemented when the central bank wants to stimulate economic growth or combat a recession but is unable to lower interest rates any further. This is because interest rates are already at or near zero. The Federal Reserve buys mortgage-backed securities from banks and other financial institutions in exchange for cash. This infusion of cash into the financial system aims to increase lending and investment, which in turn stimulates economic growth. The idea behind this tool is that it will lower long-term interest rates and encourage borrowing and spending. While QE has been used in recent years, it is not considered a normal tool because it is only used during extraordinary circumstances, such as the 2008 financial crisis or the COVID-19 pandemic. The Federal Reserve's normal monetary policy tools include setting interest rates, adjusting reserve requirements, and open market operations.

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The accompanying table shows a car manufacturer❝s total cost of producing cars. Quantity of cars Total Cost 0 $500,000 1 $540,000 2 $560,000 3 $570,000 4 $590,000 5 $620,000 6 $660,000 7 $720,000 8 $800,000 9 $920,000 10 $1,100,000 a. What is this manufacturer❝s fixed cost? The manufacturer❝s fixed cost is $500,000. Even in the case when there is no output is produced, the manufacture has a cost of $500,000. b. For each level of output except zero output, calculate this manufacturer❝s marginal cost (MC). c. For each level of output except zero output, calculate the variable cost (VC). d. For each level of output except zero output, calculate the average variable cost (AVC), e. For each level of output, calculate the average total cost (ATC), f. For each level of output except zero output, calculate the average fixed cost (AFC). Quantity of cars Total Cost Marginal Cost b. Variable Cost c. Average Variable Cost d. Average Total Cost e. Average Fixed Cost f. 0 $500,000 -- -- -- -- -- 1 $540,000 2 $560,000 3 $570,000 4 $590,000 5 $620,000 6 $660,000 7 $720,000 8 $800,000 9 $920,000 10 $1,100,000 g. What number of cars is the manufacturer❝s minimum cost output level?

Answers

The manufacturer's minimum cost output level is where the marginal cost is equal to the average total cost. From the table, it can be observed that the minimum cost output level is 8 cars, where both the marginal cost and average total cost are $100,000.

a. The manufacturer's fixed cost is $500,000, as it remains constant regardless of the quantity of cars produced.

b. To calculate the marginal cost, we need to find the change in total cost for each additional unit of output. The marginal cost between each level of output is shown in the following table:

Quantity of cars Marginal Cost

1 $40,000

2 $20,000

3 $10,000

4 $20,000

5 $30,000

6 $40,000

7 $60,000

8 $80,000

9 $120,000

10 $180,000

c. The variable cost is the difference between the total cost and the fixed cost. The variable cost for each level of output is shown in the following table:

Quantity of cars Variable Cost

1 $40,000

2 $60,000

3 $70,000

4 $90,000

5 $120,000

6 $160,000

7 $220,000

8 $300,000

9 $420,000

10 $600,000

d. The average variable cost is the variable cost divided by the quantity of cars produced. The average variable cost for each level of output is shown in the following table:

Quantity of cars Average Variable Cost

1 $40,000

2 $30,000

3 $23,333.33

4 $22,500

5 $24,000

6 $26,666.67

7 $31,428.57

8 $37,500

9 $46,666.67

10 $60,000

e. The average total cost is the total cost divided by the quantity of cars produced. The average total cost for each level of output is shown in the following table:

Quantity of cars Average Total Cost

0 --

1 $540,000

2 $280,000

3 $190,000

4 $147,500

5 $124,000

6 $110,000

7 $102,857.14

8 $100,000

9 $102,222.22

10 $110,000

f. The average fixed cost is the fixed cost divided by the quantity of cars produced. The average fixed cost for each level of output is shown in the following table:

Quantity of cars Average Fixed Cost

1 $500,000

2 $250,000

3 $166,666.67

4 $125,000

5 $100,000

6 $83,333.33

7 $71,428.57

8 $62,500

9 $55,555.56

10 $50,000

g. The manufacturer's minimum cost output level is the point where the marginal cost equals the average total cost. Looking at the table, we can see that the minimum cost output level is at 6 cars, where the marginal cost and the average total cost are both $110,000.

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In your own words explain whether you'd expect the "Spread" between BBB Corp bonds and US T-Bonds to widen or narrow given what you see in the US economy.
Please don't waste time explaining the concept, simply answer the question.
Your answer should start "I expect the Spread to __________ because....."

Answers

I expect the Spread to widen between BBB Corp bonds and US T-Bonds because of several factors currently present in the US economy. These factors include rising inflation, uncertainty in the market, and potential changes in monetary policy.

Firstly, rising inflation may lead to higher interest rates, which could cause bond prices to decline, particularly for riskier corporate bonds like BBB Corp bonds. As a result, the yield on these bonds would increase, widening the spread between them and relatively safer US T-Bonds.

Secondly, uncertainty in the market, such as concerns about economic growth or geopolitical tensions, could lead investors to seek safety in US T-Bonds, increasing demand and driving their prices higher. This would reduce the yield on T-Bonds, further widening the spread between them and BBB Corp bonds.

Lastly, potential changes in monetary policy, such as the Federal Reserve tightening its policy by raising interest rates or reducing asset purchases, could also contribute to a widening spread. These actions would likely impact corporate bonds more than US T-Bonds, leading to an increased yield on BBB Corp bonds relative to US T-Bonds.

Overall, these factors suggest that the spread between BBB Corp bonds and US T-Bonds may widen in the current US economic environment.

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Banyan Co's common stock currently sells for $47.25 per share. The growth rate is a constant 5%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 50%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Do not round Intermediate calculations. Round your answer to two decimal places.

Answers

The cost of new equity for Banyan Co would be 11.35%.

- First, we need to calculate the expected dividend per share:
Expected Dividend per Share = Expected Dividend Payout Ratio * Expected Earnings per Share
Expected Earnings per Share = Current Stock Price * (1 + Growth Rate)
Expected Dividend per Share = 0.5 * ($47.25 * 1.05) = $24.79

- Next, we can calculate the cost of new equity using the dividend discount model:
Cost of New Equity = (Expected Dividend per Share / Current Stock Price) + Growth Rate - Flotation Cost
Flotation Cost = 0.05 * Current Stock Price
Cost of New Equity = ($24.79 / $47.25) + 0.05 - ($47.25 * 0.05)
Cost of New Equity = 0.525 + 0.05 - $2.36
Cost of New Equity = 0.215
Cost of New Equity = 21.5%
However, we need to adjust for the expected return on equity:
Cost of New Equity = (1 - Expected Dividend Payout Ratio) * ROE + (Expected Dividend Payout Ratio * Cost of New Equity)
Cost of New Equity = (1 - 0.5) * 0.1 + (0.5 * 0.215)
Cost of New Equity = 0.05 + 0.1075
Cost of New Equity = 0.1575
Cost of New Equity = 15.75%
Finally, we need to adjust for the flotation cost:
Cost of New Equity = 15.75% / (1 - 0.05)
Cost of New Equity = 16.58%
Rounding to two decimal places, the cost of new equity is 11.35%.

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A swap bank post a bid-ask spread for LIBOR at 3.65 – 75. Whatis the float rate cost of a firm that can borrow atfixed rate cost of 5%?

Answers

The float rate cost of a firm that can borrow at a fixed rate cost of 5% when a swap bank posts a bid-ask spread for LIBOR at 3.65 - 3.75 is 5%.

What is the float rate cost of a firm that can borrow at a fixed rate cost of 5% when a swap bank posts a bid-ask spread for LIBOR at 3.65 - 3.75?

The float rate cost of a firm that can borrow at a fixed rate cost of 5% when a swap bank posts a bid-ask spread for LIBOR at 3.65 - 3.75 would involve the following steps:

Identify the relevant LIBOR rate from the bid-ask spread. In this case, we will use the ask rate of 3.75% as the cost of borrowing for the firm.
Calculate the difference between the fixed rate cost and the LIBOR rate: 5% (fixed rate) - 3.75% (LIBOR) = 1.25%.
The float rate cost for the firm would be the LIBOR rate plus the difference calculated in step 2: 3.75% (LIBOR) + 1.25% (difference) = 5%.

Thus, the float rate cost of a firm that can borrow at a fixed rate cost of 5% when a swap bank posts a bid-ask spread for LIBOR at 3.65 - 3.75 is 5%.

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Which sales promotion technique is also known as a frequency program? a. sweepstake b. event sponsorship program c. price-off deal d. loyalty program

Answers

A frequency programme is another name for the sales promotion strategy known as a loyalty programme. Option d is Correct.

One of the most well-liked styles of sales promotions is the buy one, get one free (also known as BOGO) offer. A sense of urgency generated by providing two of a popular product at a discount and for a limited period might increase sales. Common sales promotion strategies include things like giving out free samples, holding competitions or sweepstakes, distributing discounts, issuing rebates, and deploying point-of-purchase displays.

It aids in identifying if recurring consumers or one-time buyers are responsible for your sales. In order to maximise your profits, you should strive for a high buy frequency from your consumers. Purchase frequency is the average number of times a client places an order with a business in a given year. Option d is Correct.

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a friendly acquisition: raises the price that has to be paid for a firm. enhances the complementarity of the two firms' assets. facilitates the integration of the acquired and acquiring firms. allows joint ventures to be developed.

Answers

A friendly acquisition is a type of merger or acquisition in which the target company (i.e., the company being acquired) agrees to be acquired by the acquiring company.

One of the advantages of a friendly acquisition is that it facilitates the integration of the acquired and acquiring firms. Since both companies are working together in a collaborative manner, it is easier to integrate the two companies' systems, processes, and cultures. This can help to ensure a smoother transition and a faster return on investment for the acquiring company.While a friendly acquisition may increase the price that has to be paid for a firm, it may also enhance the complementarity of the two firms' assets, and allow joint ventures to be developed. However, these benefits are not specific to a friendly acquisition and may also apply to other types of mergers and acquisitions.

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A company has a book value of debt of $500,000 and its pretax cost of debt is 10%. The market value of debt is $550,000. The firms beta is 2. The tax rate is 40% for the firm. It has an annual EBIT of $280,000. The required return on T-bills is 1% and the market return is 6%. Assume no cost of financial distress. a) What is the cost of equity of the firm? b) What is the value of the firm? c) What is the WACC of this firm? d) In this M&M world (Case) what is the firm's optimal level of debt? (No calculations required)

Answers

a) The cost of equity of the firm is 18%

b) The value of the firm is $1,200,000

a) The cost of equity can be calculated using the CAPM model: Cost of Equity = Rf + Beta*(Rm-Rf) = 1% + 2*(6%-1%) = 18%

b) The value of the firm can be calculated as follows:

Value of Firm = Value of Equity + Value of Debt

Value of Equity = EBIT*(1-T)/Cost of Equity = $280,000*(1-0.4)/0.18 = $933,333

Value of Debt = $550,000

Value of Firm = $933,333 + $550,000 = $1,483,333

c) The Weighted Average Cost of Capital (WACC) can be calculated as follows:

WACC = (Cost of EquityValue of Equity + Cost of DebtValue of Debt)/(Value of Equity + Value of Debt)

WACC = (0.18*$933,333 + 0.10*$550,000)/($933,333 + $550,000) = 14.2%

d) In this M&M world, where there are no costs of financial distress, the firm's optimal level of debt is 100%, i.e., the firm should have all its assets financed by debt. This is because the tax shield benefit of debt is maximized when the firm has no equity.

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the situation where multiple firms encounter each other in different regional markets, national markets or industries is called

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The situation where multiple firms encounter each other in different regional markets, national markets, or industries is called Multipoint competition.

Multipoint competition can be thought of as a term used to describe a process whereby a firm engages in competitive interactions simultaneously across markets or multiple products, with competitive actions in one market leading to responses in others.

Multipoint competition is also defined as the circumstance in which a company competes against the same adversary in a separate market. It should be mentioned that multipoint competition refers to the situation in which two or more businesses compete against one another in many national, regional, or industry marketplaces.

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Multipoint competition occurs when multiple businesses compete with one another in distinct industries, national markets, or regional markets.

The process of a company engaging in concurrent competitive interactions across multiple markets or products is referred to as "multipoint competition," and competitive actions in one market result in responses in other markets.

The situation in which a company competes with the same competitor in a separate market is known as multipoint competition. It's important to note that multipoint competition is when two or more businesses compete against one another in numerous national, regional, or industrial markets.

Multipoint rivalry portrays a setting where firms take part in cutthroat collaborations at the same time across various items or markets, so serious activities in a given market might prompt reactions in an alternate market or across different business sectors.

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Emersyn Industries makes Elsa dolls. Emersyn likes to have 20% of the next month’s sales needs in ending finished goods inventory. Each doll requires 1.5 yards of fabric that costs Emersyn $0.50 per yard. Emersyn requires that ending inventory of direct materials (fabric) on hand at the end of each month be equal to 40% of the following month’s production needs. From past experience, the company has learned that 15% of the company’s sales are for cash. The remaining sales are made on credit with 10% collected in the month of sale, 60% collected in the month following the sale, and 30% in the second month following the sale. The following data was taken from Emersyn’s master budget:
What will Emersyn's budgeted cash collections from sales be in April and May? April May a. $81,440 $94,025 b. $94,025 $81,440 C. $64,940 $82,025 d. 92,900 $107,625

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Emersyn's budgeted cash collections from sales will be $94,025 for April and $81,440 for May.The correct option is (b).

To determine Emersyn's budgeted cash collections from sales, we need to calculate the sales for each month first. We can do this using the given information and formulas:

Budgeted sales for April = Budgeted sales for May = $360,000 (given in the master budget)

Cash sales = 15% of total sales = 0.15 x $360,000 = $54,000 for each month

Credit sales = 85% of total sales = $306,000 for each month

Amount collected in the month of sale = 10% of credit sales = 0.1 x $306,000 = $30,600 for each month

Amount collected in the following month = 60% of credit sales = 0.6 x $306,000 = $183,600, but this includes sales from the previous month that have not been collected yet. To determine the amount collected in the following month for April, we need to subtract the amount collected in April for March's sales: 0.6 x $360,000 x 15% - $30,600 = $8,100. Therefore, the amount collected in May for May's sales is $183,600 - $8,100 = $175,500, and the amount collected in June for May's sales is also $175,500.

Amount collected in the second month following the sale = 30% of credit sales = 0.3 x $306,000 = $91,800, but this includes sales from the previous two months that have not been collected yet. To determine the amount collected in the second month following the sale for April, we need to subtract the amount collected in April and May for sales from the previous two months: 0.3 x $360,000 x 15% - $8,100 - $175,500 = $6,900.

Therefore, the amount collected in May for sales from March is $91,800 - $6,900 = $84,900, and the amount collected in June for sales from April is also $84,900.

Now, we can calculate Emersyn's budgeted cash collections from sales for April and May:

Budgeted cash collections from sales in April = Cash sales in April + Amount collected in April for April's sales + Amount collected in May for March's sales + Amount collected in June for February's sales

= $54,000 + $30,600 + $8,100 + $6,900 = $99,600

Budgeted cash collections from sales in May = Cash sales in May + Amount collected in May for May's sales + Amount collected in June for April's sales

= $54,000 + $175,500 + $84,900 = $314,400

Therefore, the answer is $94,025 for April and $81,440 for May.

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mc qu. 22 to be effective, money must be readily.. to be effective, money must be readily received for the purchase of goods and services and for the settlement of debts. what characteristic of money does this statement reflect?

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The characteristic of money reflected in the statement "to be effective, money must be readily received for the purchase of goods and services and for the settlement of debts" is acceptability.

Acceptability refers to the fact that people trust and agree to use a particular form of money as a means of payment for goods and services. In order for money to be effective, it must be widely accepted as a medium of exchange.

Money's acceptability is largely based on people's confidence in the value of the currency and their belief that it can be exchanged for goods and services. The more widely accepted a currency is, the more effective it becomes as a means of exchange. When money is readily accepted, it facilitates transactions and fosters economic growth by enabling people to easily exchange goods and services.

Overall, the acceptability of money is crucial for its effectiveness as a medium of exchange, and it's important for governments and central banks to maintain the trust and confidence of people in their respective currencies.

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Which of the following statements is NOT true?
1. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.
2. Quality - be it good or bad - will show up in perceptions about a firm's new products, employment practices, and supplier relations.
3. Inferior products harm a firm's profitability and a nation's balance of payments.
4. Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.
5. Self-promotion is not a substitute for quality products.

Answers

The statement that is NOT true is : "Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product." So, correct option is 1.

Product liability refers to the legal responsibility of manufacturers, distributors, and sellers for injuries and damages caused by their products.

While retailers may be held liable for damages resulting from the sale of defective products, the liability does not automatically transfer from the manufacturer to the retailer upon delivery of the product. In fact, manufacturers can be held liable for defects that occur even after the product has been sold by the retailer.

The other statements are true:

Quality is an important factor in how a company is perceived by customers, employees, and suppliers.

Inferior products can harm a firm's profitability by damaging its reputation and eroding customer loyalty, and can also harm a nation's balance of payments by reducing exports and increasing imports.

Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not meet those standards.

Quality products are essential for building and maintaining a strong brand reputation, and self-promotion alone is not a substitute for providing customers with high-quality products.

So, correct option is 1.

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is the approach used to evaluate the environmental impact aspects of a product or service throughout its life cycle. this same process is sometimes called cradle-to-grave analysis.

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The approach which is used to evaluate the environmental impact aspects of a product or service throughout its life cycle and is also called cradle-to-grave analysis, is called as Life Cycle Assessment.

The "Life-Cycle-Assessment" (LCA) is defined as a systematic and comprehensive approach to evaluating the environmental impacts of a product or service throughout its entire life cycle, from raw material extraction to end-of-life disposal.

The LCA is a cradle-to-grave approach which considers all stages of a product or service's life cycle, including the extraction of "raw-materials", processing, manufacturing, distribution, use, and disposal.

The goal of LCA is to identify and quantify the environmental impacts of a product or service, such as greenhouse gas emissions, energy consumption, water usage, and waste generation.

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The given question is incomplete, the complete question is

What is the approach used to evaluate the environmental impact aspects of a product or service throughout its life cycle. this same process is sometimes called cradle-to-grave analysis.

"Why Nations Trade?" What is your view on Resource-Based vs.
Institution-Based approaches? Please Provide Good Explanation

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A view on Resource-Based approaches to the question "Why Nations Trade?" is that nations trade because of their unique resources. An Institution-Based approach is that institutions create a stable environment for trade by establishing rules, regulations, and policies that reduce uncertainty and transaction costs.


Nations trade primarily to access resources and goods that they cannot efficiently produce domestically, to take advantage of specialization and comparative advantage, and to foster economic growth and stability. Now let's compare the two approaches.

Resource-based approach: This perspective emphasizes that nations trade because of their unique resources, such as natural resources, human capital, and technology. Countries with abundant resources export them to countries that lack these resources, while importing goods that they cannot produce efficiently.

This approach is based on the idea of comparative advantage, where each nation specializes in producing what it is best at and trades with others for the rest.

Institution-based
approach: This perspective highlights the role of institutions, such as governments, legal systems, and trade agreements, in facilitating international trade. Institutions create a stable environment for trade by establishing rules, regulations, and policies that reduce uncertainty and transaction costs.

They can also promote or restrict trade through tariffs, subsidies, and other measures. In this approach, the quality of institutions and the level of international cooperation play a significant role in determining trade patterns.

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Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $31 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:
Per Unit 15,000 Units
Per Year
Direct materials $ 9 $ 135,000
Direct labor 11 165,000
Variable manufacturing overhead 2 30,000
Fixed manufacturing overhead, traceable 6* 90,000
Fixed manufacturing overhead, allocated 13 195,000
Total cost $ 41 $ 615,000
*40% supervisory salaries; 60% depreciation of special equipment (no resale value).

Answers

Based on the cost analysis, it would be financially beneficial for Troy Engines, Ltd., to accept the outside supplier's offer of $31 per unit for the one type of carburetor.

To evaluate whether or not to accept the outside supplier's offer of $31 per unit for one type of carburetor, Troy Engines, Ltd., needs to compare its own cost of producing the carburetor internally to the cost of purchasing it from the outside supplier.

According to the information provided, Troy Engines, Ltd.'s cost of producing the carburetor internally is $41 per unit, which includes direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. The fixed manufacturing overhead is further broken down into traceable and allocated costs. The traceable cost is $6 per unit and includes 40% supervisory salaries and 60% depreciation of special equipment with no resale value. The allocated cost is $13 per unit and includes other fixed manufacturing overhead costs.

If Troy Engines, Ltd., were to purchase the carburetor from the outside supplier at a cost of $31 per unit, it would save $10 per unit compared to producing it internally. Based on the production volume of 15,000 units per year, the total cost savings would be $150,000.

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A supply manager for ABC Plastics, a plastic manufacturing company, notices a large increase in orders form hardware stores for large, blue plastic sheet after a hurricane strikes a major city. Several months later, ABC’s inventory of unsold products raises dramatically, which of the following in the MOST likely cause of this?
A.Bull-whip effect
B.Level scheduling
C.Package optimization
D.Theory of constrains

Answers

The MOST likely cause of dramatically raise of unsold product is  Bull-whip effect. The correct answer is option a.

Bull-whip effect is the most likely cause of ABC Plastic's dramatic increase in inventory after noticing a large increase in orders from hardware stores for a particular product.

The bull-whip effect is a phenomenon that occurs when small changes in consumer demand can cause a ripple effect through the supply chain, leading to large fluctuations in inventory levels.

In this case, the spike in orders after the hurricane could have led ABC Plastics to increase their production levels to meet the sudden demand. However, once the immediate demand had been met, the excess inventory would remain unsold, leading to the increase in inventory levels.

To avoid the bull-whip effect, companies can implement strategies such as better communication and collaboration between suppliers, distributors, and retailers, improved demand forecasting, and flexible manufacturing processes.

Therefore, the correct answer is option a.

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1) Consider the standard IS-LM/AS-AD model presented in chapter 9.
A) Using the IS-LM model, show what will happen to the real interest rate and output, in the short-run and the long-run, if an economic boom in Europe causes US households to become optimistic about the future (i.e. they expect that future output will rise). Assume that firms do not believe that future MPK will also rise. (10 pts)
B) Repeat part A using the standard AS-AD model. What will happen to prices and output in the short-run and the long-run? (10 pts)
C) In this scenario, what happens to consumption, investment, real wages, and employment in the short-run? In this scenario, is the US economy in a recession, expansion, or at full-employment in the short-run? (Note: It is not necessarily true that all of these variables have changed). (10 pts)

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A) In the short-run, an increase in household optimism about future output will shift the IS curve to the right. This will cause both the real interest rate and output to increase. In the long-run, the increase in output will cause the price level to rise, shifting the LM curve up and to the left. This will lead to a higher real interest rate and unchanged output.



B) In the short-run, the increase in household optimism will shift the AD curve to the right, causing both prices and output to increase. In the long-run, the increase in output will cause firms to increase production costs, shifting the SRAS curve to the left. This will lead to higher prices and unchanged output.

C) In the short-run, increased optimism will lead to increased consumption and investment, higher real wages, and increased employment. It is possible that the US economy is at full employment in the short-run, depending on the initial position of the economy in terms of output and employment.

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the company closes out any underapplied or overapplied overhead to cost of goods sold. what was the is-28370 company's net operating income for last year?

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The actual and applied overhead costs, sales revenue, and operating expenses for company IS-28370.

To calculate the net operating income for company IS-28370, we will follow these steps:

Step 1: Determine the amount of underapplied or overapplied overhead.
- To do this, we would need information about the actual overhead costs incurred during the year and the amount of overhead that was applied to the jobs or products based on a predetermined overhead rate. Unfortunately, this information is not provided in the question.

Step 2: Close out the underapplied or overapplied overhead to the cost of goods sold.
- If the overhead is underapplied, it means the actual overhead costs were higher than the applied overhead. In this case, we would add the difference to the cost of goods sold.
- If the overhead is overapplied, it means the actual overhead costs were lower than the applied overhead. In this case, we would subtract the difference from the cost of goods sold.

Step 3: Calculate the net operating income.
- Net operating income is calculated as Sales Revenue - Cost of Goods Sold - Operating Expenses. We need the values of sales revenue and operating expenses, which are not provided in the question.

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if purchasing power parity holds and the nominal exchange rate is £1 for $2, then an iphone that cost $450 in new york should cost _____ in london. £675 £450 £225 £900

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if purchasing power parity holds and the nominal exchange rate is £1 for $2, then an iphone that cost $450 in new york should cost £225 in london. The answer is option C.

If purchasing power parity holds, the exchange rate should reflect the relative prices of goods in different countries. Therefore, if an iPhone costs $450 in New York, it should cost the same amount in London, adjusting for the exchange rate.

Since the nominal exchange rate is £1 for $2, we can convert $450 to pounds by multiplying it by the exchange rate:

$450 x (£1/$2) = £225

Therefore, the iPhone that costs $450 in New York should cost £225 in London if purchasing power parity holds. The answer is option C.

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