Ruben invested $1700 per year in an IRA each year for 5 years earning 13% compounded annually. At the end of 5 years he ceased the IRA payments, but continued to invest his accumulated amount at 13% compounded annually for the next 4 years. a) What was the value of his IRA at the end of 5 years? b) What was the value of the investment at the end of the next 4 years? Answer = $
In: Finance
Your first job out of college will pay you $47,000 in year 1 (exactly one year from today), growing at a rate of 3.9% per year thereafter. You will also receive a one time bonus of $22,000 at the same time as your first salary. You plan to retire in 44 years (you'll receive 44 years of salary). If the applicable discount rate is 5%, what is the present value of these future earnings today? Round to the nearest cent.
In: Finance
Find PPE + Installation in Year 0 of CASH FLOWS
Find Opportunity Costs/Benefits in YEAR 0
Find Opportunity Costs/Benefits in YEAR 5
Find Salvage Value in Year 5
Find Tax Impact of Salvage in Year 5
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Tesla is considering expanding their production facilities to meet the growing demand for Tesla cars. You are given the following information:
The expansion would be a 5-year project. The expansion would take place on a plot of land that Elon Musk (the founder of Tesla) already owns. If the expansion doesn’t take place, the land could be sold today for $7,000,000.
Tesla commissioned a study on the feasibility of expansion three months ago, and paid $2,500,000 to consultants for the report.
To build the factory on the land would require a $80,000,000 up front investment in plant and property and an additional $15,000,000 in installation costs for the machinery.
Running the factory and machines will result in $7,000,000 of fixed costs per year.
Net Working Capital would have to increase by $1240000 at the beginning of the project (this money could be released at the end of the 5-year project).
Tesla would depreciate the factory and machinery using a 5-year MACRS schedule.
The factory and machinery can be sold off at the end of the 5-year project for $21,000,000.
-----> Elon Musk’s land can be sold off at the end of the 5-year project for $3500000.
Assume that the corporate tax rate is 21%. The new retail price for Tesla’s cars in yar 1 will equal $35,000, the existing retail price for the cheapest model (google "Tesla retail price") This price will increase by 5% per year during each year of the project.
Due to the expansion, Tesla will sell 12,000 (incremental) cars in Year 1, 15,000 in Year 2, and 18,000 in each of Years 3-5 of the project.
In: Finance
Your first job out of college will pay you $68,000 in year 1 (exactly one year from today), growing at a rate of 2.6% per year thereafter. You will also receive a one time bonus of $48,000 at the same time as your first salary. You plan to retire in 36 years (you'll receive 36 years of salary). If the applicable discount rate is 7%, what is the present value of these future earnings today? Round to the nearest cent.
In: Finance
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Micro Spinoffs, Inc., issued 10-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,160. If the firm’s tax bracket is 35%, what is its after-tax cost of debt? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| After-tax cost of debt | % |
In: Finance
In: Finance
On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. 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:*
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| 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 $37,282,062 received for the bonds by
using the present value tables. (Round to the nearest dollar.)
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| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Danzer Industries Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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!!!!!!!!!!USE PRESENT VALUE TABLES!!!!!!!!!!
1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
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1 |
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2 |
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3 |
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4 |
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5 |
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|
6 |
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
|
1 |
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2 |
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3 |
3. Determine the total interest expense for Year 1.
Amount: $ __________________
4. Compute the price of $37,282,062 received for the bonds by using the present value tables. (Round to the nearest dollar.)
| Present value of the face amount | $ |
| Present value of the semiannual interest payments | |
| Price received for the bonds | $ |
In: Accounting
Your first job out of college will pay you $63,000 in year 1 (exactly one year from today), growing at a rate of 2.9% per year thereafter. You will also receive a one time bonus of $41,000 at the same time as your first salary. You plan to retire in 38 years (you'll receive 38 years of salary). If the applicable discount rate is 6%, what is the present value of these future earnings today? Round to the nearest cent.
In: Finance
Excavation Co., a publicly-traded company, has a December 31 year end. For the 2020 fiscal year, there were 100,000 common shares outstanding all year. Net income for the year ended December 31, 2020 was $900,000. The company’s income tax rate is 25%. During 2019, Spade issued a $5,000,000, 5% convertible bond at par. Each $1,000 bond is convertible into 20 common shares. No bonds have been converted as of December 31, 2020. Also during 2019, Spade issued 100,000, $2 cumulative, convertible preferred shares. Two preferred shares are convertible into one common share. The preferred share dividend was declared and paid in June, 2020. Required : Calculate basic and diluted earnings per share for 2020.
In: Accounting
The following financial statements apply to Benson Company:
| Year 4 | Year 3 | ||||||
| Revenues | |||||||
| Net sales | $ | 211,000 | $ | 176,600 | |||
| Other revenues | 8,300 | 6,300 | |||||
| Total revenues | 219,300 | 182,900 | |||||
| Expenses | |||||||
| Cost of goods sold | 125,100 | 101,600 | |||||
| Selling expenses | 20,700 | 18,700 | |||||
| General and administrative expenses | 10,500 | 9,500 | |||||
| Interest expense | 1,800 | 1,800 | |||||
| Income tax expense | 19,000 | 16,600 | |||||
| Total expenses | 177,100 | 148,200 | |||||
| Net income | $ | 42,200 | $ | 34,700 | |||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 4,500 | $ | 6,800 | |||
| Marketable securities | 3,000 | 3,000 | |||||
| Accounts receivable | 35,700 | 30,600 | |||||
| Inventories | 101,300 | 94,400 | |||||
| Prepaid expenses | 4,800 | 3,800 | |||||
| Total current assets | 149,300 | 138,600 | |||||
| Plant and equipment (net) | 105,100 | 105,100 | |||||
| Intangibles | 20,800 | 0 | |||||
| Total assets | $ | 275,200 | $ | 243,700 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 38,600 | $ | 55,200 | |||
| Other | 15,200 | 15,700 | |||||
| Total current liabilities | 53,800 | 70,900 | |||||
| Bonds payable | 64,500 | 65,500 | |||||
| Total liabilities | 118,300 | 136,400 | |||||
| Stockholders’ equity | |||||||
| Common stock (45,000 shares) | 113,600 | 113,600 | |||||
| Retained earnings | 43,300 | (6,300 | ) | ||||
| Total stockholders’ equity | 156,900 | 107,300 | |||||
| Total liabilities and stockholders’ equity | $ | 275,200 | $ | 243,700 | |||
Required
Calculate the following ratios for Year 3 and Year 4. Since Year 2
numbers are not presented do not use averages when calculating the
ratios for Year 3. Instead, use the number presented on the Year 3
balance sheet.
JUST NEED *****F-N*****
a. Net margin. (Round your answers to 2
decimal places.)
b. Return on investment. (Round your
answers to 2 decimal places.)
c. Return on equity. (Round your answers
to 2 decimal places.)
d. Earnings per share. (Round your answers
to 2 decimal places.)
e. Price-earnings ratio (market prices at the end
of Year 3 and Year 4 were $5.96 and $4.80,
respectively).(Round your intermediate calculations and
final answers to 2 decimal places.)
f. Book value per share of common stock.
(Round your answers to 2 decimal places.)
g. Times interest earned. Exclude extraordinary
income in the calculation as they cannot be expected to recur and,
therefore, will not be available to satisfy future interest
payments. (Round your answers to 2 decimal
places.)
h. Working capital.
i. Current ratio. (Round your answers to 2
decimal places.)
j. Quick (acid-test) ratio. (Round your
answers to 2 decimal places.)
k. Accounts receivable turnover. (Round
your answers to 2 decimal places.)
l. Inventory turnover. (Round your answers
to 2 decimal places.)
m. Debt-to-equity ratio. (Round your
answers to 2 decimal places.)
n. Debt-to-assets ratio. (Round your
answers to the nearest whole percent.)
| year4 | year3 | ||
| a | net margin | ||
| b | return on investment | ||
| c | return on equity | ||
| d | earnings per share | ||
| e | price earnings ratio | ||
| f | book value | ||
| g | interest earned | ||
| h | working capital | ||
| i | current ratio | ||
| j | quick (acid test) ratio | ||
| k | accounts receivable turnover | ||
| l | inventory turnover | ||
| m | debt to equity ratio | ||
| n | debt to assets ratio |
In: Accounting