A perpetual bond with a par value of $1,000 and a coupon rate of 7.75% has a current market price of $900. What is its yield to maturity a. 9.32%
b. 8.33%
c. 7.92%
d. 9.45%
e. 8.61%

e. 8.61%

Explanation:

This is a perpetual bond so the price is calculable by;

Price = Coupon / Yield to Maturity

Coupon = 7.75% * 1,000

= $77.50

900 = 77.50/ YTM

900 * YTM = 77.50

YTM = 77.50/900

= 8.61%

The answer is : $104,000                  

Explanation:

First, we have to lay out the particulars, and explain what each of them mean:

debit balance in account receivable = $32,000. This refers to an amount that cusomers owed the company at the beginning of the period.

revenue recorded = $88,000. This refers to the total sales made by the company.

At the end of the period, we are told that the account receivable contained a balance of $16,000

Therefore it means that after all the payments (both balance from previous period and sales transactions) have been made in cash, the amount which the customers owed the company = $16,000.

Hence the cash collected is calculated as follows

(debit balance at beginning + revenue) - debit balance at the end = cash collected

(32,000 + 88,000) - 16,000 = cash collected

120,000 - 16,000 = cash collected

cash collected = $104,000