Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7, Problem 53P
Determine the after-tax yield (i.e.,
- Interest is paid semi-annually, and the bond was bought after the fifth payment had just been received by the previous owner.
- The purchase
price for the bond was $9,000. - All revenues (including
capital gains) are taxed at an income rate of 28%. - The bond is held to maturity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Gina has an opportunity to save $260 per month at an APR of 6.35% in a 401K plan through work. She
plans to retire in 25 years. The income taxes are at 35% for her.
(1) What are Gina's tax savings over the course of her investment? Review your course materials for
help with this calculation.
(Express your answer rounded correctly to the nearest cent!)
2$
Ikyou haven't answered the question correctly in 3 attempts, you can get a hint.
Hint:
8) A student is buying a new car. The car's price is $26,500, the sales tax is 8%, and the
title, license and registration fee is $450 to be paid in cash. The dealer offers to finance
90% of the car's total price for 48 months at a nominal interest rate of 9% per year,
compounded monthly. The monthly payment is
i)
S664.15
ii)
$651.46
iii)
S561.64
iv) S541.66
The finance charge that a student pays on his credit card is 18.4% APR (annual percentage rate). Determine the finance charges (interest) the student would have to pay if the account's average
balance for the year was $5,000.
$ 76.5.
Chapter 7 Solutions
Engineering Economy (17th Edition)
Ch. 7 - How are depreciation deductions different from...Ch. 7 - Prob. 2PCh. 7 - Explain the difference between real and personal...Ch. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10P
Ch. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - A manufacturer of aerospace products purchased...Ch. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 30PCh. 7 - Prob. 31PCh. 7 - Prob. 32PCh. 7 - Prob. 33PCh. 7 - Refer to Problem 6-79. The alternatives all have a...Ch. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - AMT, Inc., is considering the purchase of a...Ch. 7 - Prob. 48PCh. 7 - Prob. 49PCh. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Determine the after-tax yield (i.e., IRR on the...Ch. 7 - A 529-state-approved Individual Retirement Account...Ch. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - Prob. 57SECh. 7 - Prob. 58SECh. 7 - Prob. 59SECh. 7 - Refer to the chapter opener and Example 7-14. As...Ch. 7 - Prob. 61FECh. 7 - The Parkview Hospital is considering the purchase...Ch. 7 - Prob. 63FECh. 7 - Prob. 64FECh. 7 - Prob. 65FECh. 7 - Prob. 66FECh. 7 - Prob. 67FECh. 7 - Prob. 68FECh. 7 - Prob. 69FECh. 7 - Prob. 70FECh. 7 - Prob. 71FECh. 7 - Prob. 72FECh. 7 - Prob. 73FECh. 7 - Prob. 74FECh. 7 - Prob. 75FECh. 7 - If the federal income tax rate is 35% and the...Ch. 7 - Prob. 77FECh. 7 - Acme Manufacturing makes their preliminary...Ch. 7 - Prob. 79FECh. 7 - Prob. 80FECh. 7 - Prob. 81FECh. 7 - Prob. 82FECh. 7 - Prob. 83FECh. 7 - Prob. 84FECh. 7 - Two insulation thickness alternatives have been...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- 11) Devin purchased a $3500 bond paying 4.5% annual simple interest after graduating from college. It is now 35 years later and he decides to cash in the bond. What is the value of this bond now? Round your answer to the nearest dollar. A) $16,336 B) $3537 C) $9013 D) $5513 E) $8632arrow_forwardA bond is sold at a face value of $200 with an annual yield of 3%. how much will the bondholder have recieved in payment from the bodn issuer after the bond has reached its maturity date of one year? A) 200 B) 406 C) 206 D) 6arrow_forwardA corporate bond has a face value of $1000 with a maturity date 20 years from today. The bond pays interest semiannually at a rate of 8% based on the face value (this means 8%/yr/semi). The interest rate paid on similar corporate bonds has decreased to a current rate of 6%/yr/semi (this would be i – the yield rate). What is the market value of this bond, or what should an investor pay for the bond?arrow_forward
- A loan was made 3 years and 8 months ago at 7.5% simple interest. The principal amount of the loan has just been repaid along with P620 of interest. Determine the following: 1. Discount rate, %? 2. What is the principal amount of the original loan?arrow_forwardAssume I won 8 million dollars in a lottery. I could take my winnings in installments of 2 million dollars a year for four years or a lump sum of fewer than 8 million dollars. If I take the installments, my first installment would come the day I claimed my winnings at the state lottery office. Assume that the interest rate is 7% per year and that there are no taxes on the winnings. 1. Calculate what the lump sum should be so that it would exactly equal the present value of the stream of the future stream of installments from the lottery. You must show and explain the work. 2. What would your answer change be if the first installment in the question above did not come until one year after I claimed my winnings. You must show and explain your work.arrow_forwardA company is looking at purchasing a new Zeiss CMM (precision measurement machine). They believe having this machine will allow them to get a new contract. The machine would cost $525,000. It would allow the manufacturer to produce 250 custom engine block heads per day (350 days per year) at a gross profit of $1.95 each, but the company would have to pay tax of 25% on their profit. Assuming you looked at everything on a yearly basis and that the project would go on for 5 years, what is the rate of return (%) on this project? (round to the nearest tenth of a percent) 3.5% 9.5% 7.0% 7.5%arrow_forward
- On February 1, 2024, Sanyal Motor Products issued 6% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2028 (four years). • The market yield for bonds of similar risk and maturity was 8%. • Interest is paid semiannually on July 31 and January 31. • Barnwell Industries acquired $65,000 of the bonds as a long-term investment. • The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that indicate Sanyal's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds…arrow_forwardThirteen years ago, you purchased a bond with a 20-year maturity, a $1,000 par value, a 10% nominal coupon rate, with semi-annual coupon payments. The economy interest rate is currently 3% per half year. The first payment is due immediately, and there are 7 more years of semi-annual payments remaining. What is the current market value of the bond (within $10)? Question 10 options: 1216 1236 1256 1276 None of the abovearrow_forwardSuppose that on January, 1, 2022, you purchased a coupon bond with the following characteristics: • Face value: $1,000 • Coupon rate: 8 3/4 • Current yield: 7% • Maturity date: 2024 If the bond is selling for $900 on January 1, 2023, then the rate of return on this bond during the holding period of calendar year 2022 was Include minus sign to indicate a negative change, but do not include a plus sign for a positive change.) %. (Round your response to three decimal places.arrow_forward
- 1. A woman arranges to repay a P10,000 bank loan in 10 equal payments at a 10% effective annual interest rate. Immediately after her third payment she borrows another P5000, also at 10%. When she borrows the P5,000, she talks the banker into letting her repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first of these 12 payments would be made 1 year after she receives the P5,000. Compute the amount of each of the 12 payments.arrow_forwardCalculate the present value of an asset that pays $225 at the end of each year for 6 years and has a face value payment of $500arrow_forwardIf you sell in March a bond future contract for 125 that matures on June 30 of the same year, and at the maturity date the same future sells for 135, you have a (profit/loss) of $arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education
DATA GEMS: How to Access Income Data Tables and Reports From the CPS ASEC; Author: U.S. Census Bureau;https://www.youtube.com/watch?v=BWpVC-Clczw;License: Standard Youtube License