Suppose 10 year ago your mother deposited $3400 in an investment account earning 5% a year. After 3 years she withdrew $1,122. There were no additional deposits or withdrawals. Obtain today's value of the investment account?

A. $4,239.39

B. $3,959.48

C. $,416.24

D. $3,710.62

Assume you have a 1 year investment horizon. A bond has 10% year coupon rate and pays the coupon once per year. The bond matures in 10 years and is priced to yield 8% this year. If you expect the yield to maturity on the bond to be 7% at the beginning of the next year, what is your holding period return, assuming you have received the coupon for this year.

On July 1, Year 1, Danzer Industries Inc. issued $48,800,000 of 10-year, 9% bonds at a market (effective) interest rate of 11%, receiving cash of $42,968,258. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? 5. Compute the price of $42,968,258 received for the bonds by using the present value tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.

Suppose you expect to earn $10 this year and $10 next year. Each dollar you earn this year can be either spent or saved at an interest rate of 10%. If you want to spend more than $10 this year, you can borrow money at 10% interest and repay it next year. Next year, you plan to pay your debts (if any), then spend all your earnings and all your savings (if any).

1. Draw your budget line between “dollars spent this year" and “dollars spent next year".

2. Suppose the government imposes a 50% income tax on all your earnings this year and next year (not including your interest earnings). Draw your new budget line.

3. Suppose the government imposes a 50% sales tax on everything you buy this year and next year. Draw your new budget line.

4. Suppose the government imposes a 50% income tax on all your earnings this year and next year, including your interest earnings. Draw your new budget line.

5. True or False: If interest earnings are not subject to income tax, then an income tax and a sales tax will lead you to spend exactly the same amount both this year and next year.

To get average a/r, inventory, etc., take prior year ending + current year ending /(divided) by 2.

Use the Figure 8-9 Pinnacle Manufacturing F/S’s to complete the year-to-year changes in account balances for the following (first one completed for example):

                       Account                             % change 2015 to 2016                      % change 2014 to 2015

Net Sales                               1.45%                                            2.70%

Cost of Goods Sold    

Operating Expenses

Income from Operations

Net Receivables

Inventory

Accounts payable

Long-term debt

Calculate the following ratios (found in chapter 7 on pages 196-199) and document in following format-

Ratio                     2016                            2015                           2014

Current Ratio    

Debt to Equity

Inventory Turnover

Gross Profit %

Think about your conclusions from the analytical procedures calculated in a & b. Jot down a few observations.

Refer to the Pinnacle balance sheet & income statement posted on Blackboard for this problem. Estimate the dollar amount of the potential misstatement in the following accounts. Identify the issue and possible explanation for the variance between 2015 & 2016. Focus on all accounts that are not direct (operating expenses-allocated).

Salaries – management & office

Property taxes (remember to look at b/s to determine if they sold or bought property)

Bad debts (tied to sales)

Depreciation expense

Analyze the account balances for accounts receivable (disregard inventory). Discuss your observations on this analysis and any additional information that you may want to consider during the current year audit. Analyze the a/r turnover, days sales outstanding, and bad debt as % of gross sales for 2016, 2015, & 2014.

Write a minimum 1,050-word analysis in which you conduct a year over year comparative and ratio analysis to measure profitability and liquidity. Include the following: Create a vertical analysis for the income statement and a horizontal analysis of the balance sheet. Describe the major variances in the horizontal and vertical analyses. Summarize your overall findings based on your calculations. Prepare a conclusion that includes the advice you might provide to the company based on your analysis. Cite a minimum of two peer-reviewed references. Format your assignment consistent with APA guidelines.

For the year ending December 31, 2020, Bad Year, Inc. reported Basis Earnings Per Share in the amount of $ 1.75, which was calculated as Net Income of $ 1,050,000 dividend by 600,000 weighted average commonshares outstanding. Bad Year, Inc. does not have a preferred stock outstanding, and did not pay any common dividends during 2020.
Throughout 2020, employees of Bad Year, Inc. owned 150,000 stock options, which entitled them to purchase 150,000 shares of Bad Year, Inc. common stock at a price of $ 40 per share. The options are currentlyexercisable, and expire on December 31, 2025. During 2020, the average price of Bad Year Common Stock was $ 25 per share.
In addition, Bad Year has Convertible Debt with a face value of $ 8,000,000 outstanding. This debt was issued "at par" on January 1, 2016, it has a coupon rate of 5% per year, and an expiration date of December 31,2030. The conversion option on the debt allows an owner to exchange $ 1,000 of face value debt for 50 shares of Bad Year common stock. Bad Year, Inc. currently pays income tax at a rate of 20%
Based on the information provided above, what is the "Diluted EPS"that Bad Year, Inc. should report for the fiscal year ending December 31, 2020?

A.$1.25

B.$1.37

C.$ 1.75

D.None of the above

Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash and cash equivalents $ 5.50 $ 10.00 Accounts receivable 42.00 35.00 Inventory 82.50 68.80 Total current assets 130.00 113.80 Property, plant, and equipment 219.00 186.00 Less accumulated depreciation 42.40 31.80 Net property, plant, and equipment 176.60 154.20 Total assets $ 306.60 $ 268.00 Liabilities and Stockholders’ Equity Accounts payable $ 49.50 $ 42.00 Common stock 102.00 79.00 Retained earnings 155.10 147.00 Total liabilities and stockholders’ equity $ 306.60 $ 268.00 For this year, the company reported net income as follows: Sales $ 650.00 Cost of goods sold 390.00 Gross margin 260.00 Selling and administrative expenses 240.00 Net income $ 20.00 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year. Required: 1. Using the indirect method, prepare a statement of cash flows for this year. 2. Compute Carmono’s free cash flow for this year.

ABC common stock is expected to have have dividends in year 1 of $3/share,  year 2 of $3/share,year 3 of $3.2/share, year 4 of $3.4/share, and in year 5 of $3.6/share. Then dividends will grow at a constant rate of 6%.

If the discount rate is 15% , what should be the current share price? Hint: The growing perpetuity (Gordon growth model) should be put into year 5 along with the year 5 dividend before taking the present values.