When negotiating the price of any car, which of the following statements is true?
A) The car dealer earns a small profit if the customer doesn't negotiate and pays full price.
B) Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car.
C) Sales people are trained to act as if they are giving the car away.
D) Salespeople are uncertain of the price at which they can sell you the car until you begin negotiations.
Answer: C
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A. Gross margin B. Sales revenue C. Net profits D. Return on assets E. Inventory
You are considering the bonds of Epsilon, Inc., a printer manufacturer. The bonds make semiannual payments and have five years to maturity, a coupon rate of 6%, and a redemption value of $1,000.
a) Determine the intrinsic value of these bonds assuming that your required rate of return is 8% (use the PV function). Also determine the current yield and the yield to call (use the RATE function) if the bonds can be called in four years with a call premium of 2%. b) Determine the duration, modified duration, and convexity of these bonds using formulas 10-5, 10-6, and 10-10 provided in the text book. c) Now assume that the settlement date for your purchase would be 01/01/2018. Using the Price, Yield, Duration, MDuration, and Fame_Convexity functions, recalculate your answers in parts (a) and (b). d) Determine the percentage change in price if market rates decline by 1%. Determine the actual relative change in bond prices using the intrinsic values for each rate. Compare this result with those obtained using the formulas with the modified duration only and with the modified duration and convexity together.
Which of the following statements is true regarding the ethical standards of management accountants?
a. Management accountants are not obligated to develop their knowledge and skills beyond the level they had when they sought employment with the company. b. Management accountants are not responsible for monitoring their subordinates to ensure maintenance of confidentiality within the company. c. Management accountants are allowed privacy and are not bound to refrain from supporting activities of personal interest even when they could discredit the profession. d. Management accountants should refrain from relationships with individuals that could cause possible conflicts of interest.