Southern Foods has a $13 million bond issue outstanding with a coupon rate of 7.15 percent and a yield to maturity of 7.39 percent. What is the present value of the tax shield if the tax rate is 34 percent?

$4,420,000

Explanation:

Data provided as per the question

Bond issue value = $13,000,000

Tax rate = 34%

The computation of present value of the tax shield is shown below:-

Present value of tax shield = Tax rate in percentage × Bond issue value

= 34% × $13,000,000

= $4,420,000

Therefore for computing the present value of the tax shield we simply multiply tax rate in percentage with bond issue value.

Error-less orders = 249 products

Explanation:

Note:

Some data is missing in the question, which is given as follows:

Stage  = 1

%Error = 12%

Stage = 2

%Error = 8%

Stage = 3

%Error = 4%

Step 1:

Find the percentage of error-less products at stage 1:

100% - 12% = 88% of the products will be error-less

Step 2:

Find the percentage of error-less products at stage 2:

100% - 8% = 92% of the products will be error-less.

Step 3:

Find the percentage of error-less products at stage 3:

100% - 4% = 96% of the products will be error-less.

Step 4:

Finding the percentage of over-all product orders:

Multiplying the three percentages determined in the stages 1, 2 and 3

Percentage of over-all error-less product orders = 88% × 92% × 96% = 77.72%

Step 5:

Determine the over-all error-less products by multiplying it with the percentage found in step 4 = 77.72%

Multiply it with the number of products = 320 products

Number of error-less products = 320 products × 77.72% = 248.7 products = 249 products (answer).

The number of error-less products = 249 products.