Answer:
Instructions are provided below.
Explanation:
To start, we must determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead expenses for the period/ total allocation base amount
Predetermined manufacturing overhead rate= (680,000/80,000) + 0.5
Predetermined manufacturing overhead rate= $9 for each direct labor hour
Next, let’s find the total cost for Xavier:
Direct Material $38,000
Direct Labor Cost $21,000
Direct Labor hours worked 280
Total cost= direct materials + direct labor + allocated overhead
Total cost= 38,000 + 21,000 + 280*9
Total cost= $61,520
Answer:
a) YTM = 9.8%
b) realized compound yield = 9.9%
Explanation:
a) PMT is 80
par value FV = 1000
coupon rate = 8%
current price PV = 953.1
years to maturity n = 3
Yield to maturity (YTM) is calculated as 
= 
= 9.8%
b) r2 = 10% = 100%+10% = 1.1
r3 = 12% = 100%+12% = 1.12
To find the realized compound yield, we first need the future value (FV) of the principal and reinvested coupons.
FV = ($80 * 1.10 * 1.12) + ($80 * 1.12) + $1080 = $1268.16
Let a be the rate at which the future value equals $1268.16.
953.1(1+y)³ = $1268.16
(1+y)³ = 1.33
1+y = 1.099
y = 0.099 = 9.9%
Response:
b. A reduction in the YTM.
Detail:
The valuation of the bond is derived from the present worth of expected cash flows. When determining these present values for cash inflows or the bond's price, the YTM is utilized for discounting. It is known that a higher interest rate results in a lower present value, whereas a lower interest rate yields a greater present value. Interest rates and present value have an inverse relationship. Thus, a decrease in YTM will enhance the bond's price.
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