Doyle Company issued $420,000 of 10-year, 6 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $57,500 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2.

b. Prepare the income statement, balance sheet, and statement of cash flows for Year 2 and Year 3.

CAPITAL EXPENDITURE DATA FOR PROJECT A

a. Calculate payback period for Project A.

b. If the cash inflow in Year 4 were $6,000 instead of $5,000, calculate the payback period.

c. If an investment yields $1,000 a year from now, then how much is it worth today if the cost of money is 10%, using discounted cash flows (DCF)?

e. Investment A will generate $100,000 two years from now and investment B will generate $110,000 three years from now. If the cost of capital is 15%, which investment is better? (using discounted cash flows (DCF))

f. Calculate Net Present Value (NPV) for Project A, and decide whether accept or reject the project.

Assume the following information: 1-year interest rate on U.S. dollars = 11.5% 1-year interest rate on Singapore dollars = 9.7% Spot rate of Singapore dollar = 0.48 USD/SGD 1-year forward premium on Singapore dollars = 3.64% Given this information, how much profit can be made with covered interest arbitrage, by borrowing 1 million USD?

Consider the following stock price and shares outstanding information. DECEMBER 31, Year 1 DECEMBER 31, Year 2 Price Shares Outstanding Price Shares Outstanding Stock K $22 108,000,000 $33 108,000,000 Stock M 86 2,200,000 46 4,400,000a Stock R 37 21,000,000 42 21,000,000 aStock split two-for-one during the year. Compute the beginning and ending values for a price-weighted index and a market-value-weighted index. Assume a base value of 100 and Year 1 as the base period. Do not round intermediate calculations. Round your answers to two decimal places.

PWIYear 1:

PWIYear 2:

VWIYear 1:

VWIYear 2:

Compute the percentage change in the value of each index during the year. Do not round intermediate calculations. Round your answers to two decimal places.

Percentage change in PWI: %

Percentage change in VWI: %

Compute the percentage change for an unweighted index assuming $1,000 is invested in each stock. Do not round intermediate calculations. Round your answer to two decimal places.

%

Problem 2

Company paid dividends each year.

Required:

1. Prepare Cash Flow Statement for Year 2
2. Prepare Tax Provision AJE for both years. Note Year 1 was the first year of operations.

Tax Provision JEs on next page.

An apartment building has the following investment characteristics: Year 1 NOI $2,500,000 Year 2 NOI $2,600,000 Year 3 NOI $2,704,000 Year 4 NOI $2,812,000 You plan to purchase the asset at a 5% initial cap rate and to sell it 3 years later, also at a 5% cap rate. You plan to use a loan at 60% LTV to purchase the asset. The loan will be interest-only (no amortization) at a 4% annual interest rate. Answer the following:

What is the purchase price?

What is your initial equity investment?

What are the annual mortgage payments?

What is the loan balance at the end of year 3? (Please have process how could you get this number )

What is your expected equity (levered) IRR? ( Please have process how could you get this number)

Thank you !!

A year ago, you purchased a 5-year bond, paying fixed annual coupons at a rate 5%pa. At the time you purchased the bond, the yield to maturity was 5%pa. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 4%, your annual total rate of return on holding the bond for that year would have been approximately ________. Group of answer choices

8.1% 4.8% 8.6% 7.6% 9.5% PreviousNext

1)

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions:

1. 1) issued stock for $70,000
2. 2) borrowed $40,000 from its bank
3. 3) provided consulting services for $69,000 cash
4. 4) paid back $30,000 of the bank loan
5. 5) paid rent expense for $16,500
6. 6) purchased equipment for $27,000 cash
7. 7) paid $4,500 dividends to stockholders
8. 8) paid employees' salaries of $36,000

What is Yowell's net cash flow from operating activities?

a) Inflow of $52,500

b) Inflow of $33,000

c) Inflow of $16,500

d) Inflow of $12,000

2)

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)

1. Acquired $1,400 cash from the issue of common stock.
2. Borrowed $870 from a bank.
3. Earned $1,050 of revenues cash.
4. Paid expenses of $340.
5. Paid a $140 dividend.

During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)

1. Issued an additional $775 of common stock.
2. Repaid $535 of its debt to the bank.
3. Earned revenues of $1,200 cash.
4. Incurred expenses of $540.
5. Paid dividends of $190.

What is the amount of Packard Company's net cash flow from financing activities for Year 2?

a) Net outflow of $535.

b) Net inflow of $585.

c) Net inflow of $50.

d) Net outflow of $725.

Forten Company, a merchandiser, recently completed its calendar-year 2018 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement, balance sheets, and additional information follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash $ 52,900 $ 75,500 Accounts receivable 68,810 52,625 Inventory 278,656 253,800 Prepaid expenses 1,270 1,995 Total current assets 401,636 383,920 Equipment 155,500 110,000 Accum. depreciation—Equipment (37,625 ) (47,000 ) Total assets $ 519,511 $ 446,920 Liabilities and Equity Accounts payable $ 55,141 $ 117,675 Short-term notes payable 10,600 6,400 Total current liabilities 65,741 124,075 Long-term notes payable 64,000 50,750 Total liabilities 129,741 174,825 Equity Common stock, $5 par value 166,750 153,250 Paid-in capital in excess of par, common stock 40,500 0 Retained earnings 182,520 118,845 Total liabilities and equity $ 519,511 $ 446,920 FORTEN COMPANY Income Statement For Year Ended December 31, 2018 Sales $ 592,500 Cost of goods sold 287,000 Gross profit 305,500 Operating expenses Depreciation expense $ 22,750 Other expenses 134,400 157,150 Other gains (losses) Loss on sale of equipment (7,125 ) Income before taxes 141,225 Income taxes expense 27,050 Net income $ 114,175 Additional Information on Year 2018 Transactions The loss on the cash sale of equipment was $7,125 (details in b). Sold equipment costing $52,875, with accumulated depreciation of $32,125, for $13,625 cash. Purchased equipment costing $98,375 by paying $34,000 cash and signing a long-term note payable for the balance. Borrowed $4,200 cash by signing a short-term note payable. Paid $51,125 cash to reduce the long-term notes payable. Issued 2,700 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,500. Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) How do complete the chart?