Suppose that an investor has 8-year investment horizon. The investor is
considering a 15-year semi-annual coupon bond selling at $990 (par value is
$1000) and having a coupon rate of 4%. The investor expectations are as follows:
• The first 4 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at an annual interest rate of 4%,
• the first 8 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at an annual interest rate of 4.25%,
• the last 4 semi-annual coupon payments can be reinvested from the time of
receipt to the end of the investment horizon at a 3.75% annual interest rate, and
• the required market interest/discount rate on 7-year bonds at the end of the
investment horizon is 3.6%.
A) What is the YTM of the bond?
B) What is the total return on bond equivalent basis from investing in the
bond?
C) Please explain your result carefully.

Forten Company, a merchandiser, recently completed its calendar-year 2017 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 and balance sheets follow.

1. The loss on the cash sale of equipment was $22,125 (details in b).
2. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.
3. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,700 cash by signing a short-term note payable.
5. Paid $58,625 cash to reduce the long-term notes payable.
6. Issued 4,200 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $53,500.

Baltimore Manufacturing Company just completed its year ended December 31, 2018. Depreciation for the year amounted to $290,000: 25% relates to sales, 20% relates to administrative facilities, and the remainder relates to the factory. Of the total units produced during FY 2016: 75% were sold in 2018 and the rest remained in finished good inventory. Use this information to determine the dollar amount of the total depreciation that will be contained in Cost of Goods Sold.  (Round dollar values & enter as whole dollars only.)

Forten Company, a merchandiser, recently completed its calendar-year 2017 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 and balance sheets follow.

Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $8,125 (details in b).
2. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash.
3. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,300 cash by signing a short-term note payable.
5. Paid $51,625 cash to reduce the long-term notes payable.
6. Issued 2,800 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $50,700.

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.)

Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. 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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.

Additional Information on Current Year Transactions

1. Purchased equipment for $59,700 cash.
2. Issued 13,400 shares of common stock for $5 cash per share.
3. Declared and paid $103,000 in cash dividends.

Required:
Prepare a complete statement of cash flows using the indirect method for the current year and one using a SPREADSHEET. (This should be two seperate charts).

Forten Company, a merchandiser, recently completed its calendar-year 2017 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 and balance sheets follow.

Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $25,125 (details in b).
2. Sold equipment costing $106,875, with accumulated depreciation of $50,125, for $31,625 cash.
3. Purchased equipment costing $116,375 by paying $70,000 cash and signing a long-term note payable for the balance.
4. Borrowed $6,000 cash by signing a short-term note payable.
5. Paid $60,125 cash to reduce the long-term notes payable.
6. Issued 4,500 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $54,100.

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.)

1. Consider the following data on Canadian GDP”

1. What was the growth rate of nominal GDP between 2008 and 2009? (The growth rate is the percentage change from one period to the next).

2. What was the growth rate of the GDP deflator between 2008 and 2009?

3. What was real GDP in 2008 measured in 2002 prices?

4. What was real GDP in 2009 measured in 2002 prices?

5. What was the growth rate of real GDP between 2008 and 2009?

6. Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain

The yield on a default-free four-year zero-coupon bond is 3%; the yield on a default-free five-year zero-coupon bond is 4.5%. The bonds have a face value of $1000 and are traded in an open market. You are a money manager and know that you will have a net inflow of $100,000 four years from now, and an obligation (i.e. a net outflow) of $100,000 one year later (i.e. five years from now). Once you get your inflow, you plan to invest part of this inflow (as much as necessary) in risk-free bonds for a year, and immediately pay the rest to your investors in the form of a profit. You would like to hedge the interest-rate risk that is involved in this future bond investment, in order to be able to pre-announce your expected profit today, but also ensure that your obligation is covered.

(a) Based on today’s yields, what is the no-arbitrage yield of a one-year forward-rate agreement starting four years from now?

(b) Assuming you can obtain such a forward-rate agreement, how much of your inflow will you need to re-invest, and how much will you be able to pay to investors?

(c) Now assume that no such forward-rate agreements are being offered in the market. How can you construct one yourself (i.e. replicate one), in order to hedge your interest-rate risk? Carefully describe your strategy, and show that the resulting cash flows mirror those of the forward-rate agreement you are trying to create. Assume you can go either long or short in either bond, and you can also buy or sell fractions of bonds.

Forten Company, a merchandiser, recently completed its calendar-year 2017 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 and balance sheets follow.

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $5,125 (details in b).

Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.

Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance.

Borrowed $4,000 cash by signing a short-term note payable.

Paid $50,125 cash to reduce the long-term notes payable.

Issued 2,500 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $50,100.

Required:
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)