Answer: Cash in advance
Explanation: Cash in advance is a type of payment that is used in some trade agreements.
This method of payment will require a buyer to pay the seller in cash before a shipment is received and sometimes before a shipment is even made.
Cash in advance is a strategic form of payment that can be used in any transaction in where there is a delay between the sales agreement and the sales delivery.
In the scenario given in the question, we can see that the German company has already placed an order, but the company has also caused a delay in the transaction by requesting for extra modifications.
This will prompt EastSide Tractors to feel the need to safeguard their interests in case the German company should default. This is why a Cash in advance payment system will come into play.
The statement above is true. When using interval method, it does not matter the number of responses, if the behavior occur in a given segment then the observer has to record it as a single event. For instance, in an English class of one hour, that is divided into six segments of ten minutes each. It does not matter the number of responses, if the behaviour occurs within the segment of ten minutes, then it has to be recorded as a single event.
Answer: 10 years to call
Explanation:
Maturity period = 25 years
Coupon rate = 7%
6.25% basis is,
- Callable in 10 years at 103
- Callable in 15 years at 102
- Callable in 20 years at par
This bond is considered as premium bond. Therefore, in case of premium bonds, Yield to call will be lower than the yield to maturity. Here, the question is which call date should be utilized. According to the rule of thumb, it states that always use the term that is nearest to the whole call date.
Hence, on the customer's confirmation, the dollar price quoted must be based on 10 years to call.
Answer:
interest portion of fifth payment = $66.89 ≈ $67
Explanation:
effective interest rate = 5% yearly
first payment = $200
second payment = $210
third payment = $220
fourth payment = $230
fifth payment = $240
sixth payment = $250
seventh payment = $260
eighth payment = $270
ninth payment = $280
tenth = $290
using a financial calculator, I determined the present value (principal) of the loan = $1,860.87
then I prepared an amortization schedule:
interest portion of fifth payment = $66.89 ≈ $67