On 1/1/2001, ABC Co. issued $1,000,000 5-year bonds with a market rate of 8%. Interests are paid annually on 12/31. The coupon rate is 6%. Answer the following questions assuming that the company uses the effective interest method of amortization. Show your calculations. 1. Determine the selling price of the bond on the issue date. Is it issued at a premium or discount? 2. Give the journal entry to record the bond issuance above. 3. How much is the interest expense for ABC Co. for the fiscal year that ended 12/31/2001? Give the journal entry to record the interest expense. 4 . On 1/1/2003, ABC Co. found itself with a lot of excess cash and it will be best for them to buy back their bonds from the open market and retire them so as to avoid future interest payments. The market interest rate on 1/1/2003 is 9%. Calculate: (i) the cash amount that ABC has to pay to retire the bond (ii) the book value (i.e., net borrowing) of the bonds on 1/1/2003 (iii) gain/loss from the retirement (iv) provide the journal entry for the early retirement of bonds.
In: Accounting
On 1/1/2001, ABC Co. issued $1,000,000 5-year bonds with a market rate of 8%. Interests are paid annually on 12/31. The coupon rate is 6%. Answer the following questions assuming that the company uses the effective interest method of amortization. Show your calculations. 1. Determine the selling price of the bond on the issue date. Is it issued at a premium or discount? 2. Give the journal entry to record the bond issuance above. 3. How much is the interest expense for ABC Co. for the fiscal year that ended 12/31/2001? Give the journal entry to record the interest expense. 4 . On 1/1/2003, ABC Co. found itself with a lot of excess cash and it will be best for them to buy back their bonds from the open market and retire them so as to avoid future interest payments. The market interest rate on 1/1/2003 is 9%. Calculate: (i) the cash amount that ABC has to pay to retire the bond (ii) the book value (i.e., net borrowing) of the bonds on 1/1/2003 (iii) gain/loss from the retirement (iv) provide the journal entry for the early retirement of bonds.
In: Accounting
Appendix: Completing an End-of-Period Spreadsheet Alert Security Services Co. offers security services to business clients. Complete the following end-of-period spreadsheet for Alert Security Services Co. If a box does not require an entry, leave it blank. Alert Security Services Co. End-of-Period Spreadsheet (Work Sheet) For the Year Ended October 31, 2019 Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 250 Accounts Receivable 1,830 Supplies 83 Prepaid Insurance 62 Land 2,080 Equipment 832 Accum. Depr.-Equipment 166 Accounts Payable 749 Wages Payable 83 Brenda Schultz, Capital 3,620 Brenda Schultz, Drawing 166 Fees Earned 2,038 Wages Expense 499 Rent Expense 250 Insurance Expense 208 Utilities Expense 146 Supplies Expense 125 Depreciation Expense 83 Miscellaneous Expense 42 Totals 6,656 6,656 Net income (loss) Check My Work
In: Accounting
Read the article below, and answer the following questions.
SoulCycle is now offering an early-bird booking service for customers who want to secure the best seat in advance.
Its so-called "Soul Early" service launched at the beginning of this month.
Rather than wait until noon on a Monday to book classes for the week, exercise junkies can pay an extra $15 to reserve the exact class and bike they want 24 hours earlier. While this is definitely a bonus, it works out to be a pretty hefty fee when classes cost as much as $36 in New York City.
A spokesperson for SoulCycle did not immediately respond to Business Insider's request for comment.
There are ways around this fee, however. Customers who book and take 15 paid rides during one calendar month are eligible for three Soul Early bookings the next month — a strategy SoulCycle uses to ensure its most loyal customers keep coming back frequently.
In a post for New York magazine, writer Josh Barro compared it to fees that airlines might impose to reserve a seat, for example. Barro went on to talk about whether SoulCycle could go "full airline" and start charging different prices per seat in the class, depending on where they are and what the demand for them would be.
Indoor cycling has become one of the most competitive spaces in the fitness market. Until 2012, SoulCycle seemed to be invincible with its cult following of fans, but then Peloton came along. This high-tech fitness company enables users to stream live classes from anywhere, making it possible to get a SoulCycle-style experience without ever leaving your home.
Peloton has achieved rapid growth in recent years, and earlier this month it announced that it had confidentially filed for an IPO. It was previously reported that an IPO deal could value the company at more than $8 billion.
Part 1
As a percentage, what is the minimum additional cost to reserve a space early for a class in New York City?
(Round your answer to two decimal places.) ___ %
Part 2
Why should this price discrimination work for SoulCycle?
Choose one or more:
A. Customers self-sort into two groups: those willing to pay more to book early and those who are not
.B. It reflects the high cost of doing business in NYC.
C. Once reserved under someone's name, a spot cannot be resold to another SoulCycle customer.
D. It advertises the high desirability of attending SoulCycle classes.
In: Economics
The manufacturer of a certain engine treatment claims that if you add their product to your engine, it will be protected from excessive wear. An infomercial claims that a woman drove 4 hours without oil, thanks to the engine treatment. A magazine tested engines in which they added the treatment to the motor oil, ran the engines, drained the oil, and then determined the time until the engines seized. Complete parts (a) and (b) below.
(a) Determine the null and alternative hypotheses that the magazine will test.
H0: _____, _______ 4
▼ sigma σ mu μ p
▼ = ,≠,> ,<
H1: _____, _______ 4
▼ mu,μ,sigma σ,p
▼ = ,≠,> ,<
(b) Both engines took exactly 12 12 minutes to seize. What conclusion might the magazine make based on this evidence?
A. The infomercial's claim is not true.
B. The infomercial's claim is true.
In: Statistics and Probability
As the marketing manager, you have an advertising budget of $500,000. Several advertising alternatives exist: newspaper, television, radio, and magazine. The information below shows the characteristics associated with each of the advertising alternatives, as well as the maximum number of placements available in each medium. In addition, the total number of print ads (newspaper and magazine put together) should be at least 20. Formulate this as a linear programming problem that maximizes exposure (audience reached).
|
Type |
Cost |
Maximum number |
Exposure (1000s) |
|
Newspaper |
1000 |
70 |
60 |
|
Magazine |
1500 |
60 |
50 |
|
Television |
2000 |
50 |
100 |
|
Radio |
3000 |
80 |
70 |
(a) What are the Decision Variables for the above problem?
Answer:
(b) What is the Objective Function for the above problem?
Answer:
(c) What are the constraints for the above problem?
Answer:
In: Operations Management
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.
Megan spends all of her money on magazines and mandarins. In 2012, she earned $18.00 per hour, the price of a magazine was $9.00, and the price of a mandarin was $1.00.
Which of the following give the nominal value of a variable? Check all that apply.
Megan's wage is $18.00 per hour in 2012.
Megan's wage is 2 magazines per hour in 2012.
The price of a mandarin is 0.11 magazines in 2012.
Which of the following give the real value of a variable? Check all that apply.
Megan's wage is 18 mandarins per hour in 2012.
Megan's wage is $18.00 per hour in 2012.
The price of a magazine is $9.00 in 2012.
Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Megan's wage has risen to $36.00 per hour. The price of a magazine is $18.00 and the price of a mandarin is $2.00.
In 2017, the relative price of a magazine is .
Between 2012 and 2017, the nominal value of Megan's wage , and the real value of her wage .
Monetary neutrality is the proposition that a change in the money supply nominal variables and real variables.
In: Economics
Dr. Carlos submitted a proposal to conduct an alcohol tolerance study with mice. He will have to inject mice with alcohol and then test them. Dr. Carlos has decided to euthanize the mice at the end of the study. He also wishes someone to volunteer the use of their pet for this research in return for some monetary compensation. Discuss:
What ethical and safety issues might arise when conducting such a study? What do you think the institutional review board at Dr. Carlos' university will be most concerned about? Explain at least three areas of concern and why the reviewers might be concerned about the stated issues.
It is common for participants to be compensated for their participation in research. Do you think this influences their behaviors or responses? Use the South University Online Library to investigate whether there is evidence regarding the influence of compensation on participants' participation. Find two articles and submit summaries of each of them.
Participants should be told they have a right to stop their participation in a study at any point in the study. Do you agree or disagree on whether this should be done or not? Why? Do you think they should still be able to receive the promised monetary compensation if they leave early?
Using the South University Online Library, research two examples of historical situations in which participants were not told that they had the right to stop their participation at any point. Use at least three references for each.
In: Biology
You have just been appointed the new marketing manager for Bon Voyage, a large travel group. Bon Voyage offers a range of holiday packages aimed at several parts of the market including package tour operations, a nationwide chain of travel shops and a fleet of aircraft.
One of the fastest growing segments of the travel market in recent years has been the cruise market. Once the domain of the privileged few, cruises are now available to a much wider target market as costs have come down and incomes have risen. Until now, Bon Voyage has not been a player in the cruise marketplace. It now realizes it may have been mistaken in this respect and wishes to enter the market as soon as possible. The company has negotiated the provision of two cruise ships which will, next season, sail round the Mediterranean and the Caribbean respectively. The ships have just been refurbished and offer the most up-to-date facilities.
Other companies in this market have been predominantly targeting middle-income groups. However, there remains a part of the market which is aimed primarily at the luxury end, with high prices and prestigious ships.
In: Operations Management
You have just been appointed the new marketing manager for Bon Voyage, a large travel group. Bon Voyage offers a range of holiday packages aimed at several parts of the market including package tour operations, a nationwide chain of travel shops and a fleet of aircraft.
One of the fastest growing segments of the travel market in recent years has been the cruise market. Once the domain of the privileged few, cruises are now available to a much wider target market as costs have come down and incomes have risen. Until now, Bon Voyage has not been a player in the cruise marketplace. It now realizes it may have been mistaken in this respect and wishes to enter the market as soon as possible. The company has negotiated the provision of two cruise ships which will, next season, sail round the Mediterranean and the Caribbean respectively. The ships have just been refurbished and offer the most up-to-date facilities.
Other companies in this market have been predominantly targeting middle-income groups. However, there remains a part of the market which is aimed primarily at the luxury end, with high prices and prestigious ships.
How to segment this market?
Which target segment might be best appropriate and why? Discuss.
How its product offerings in this area might be positioned so as to differentiate if from existing competitors.
In: Operations Management