Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,150.

1. What are the bond's nominal yield to maturity and its nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places.

   YTM:   %

   YTC:   %

   Would an investor be more likely to earn the YTM or the YTC?

   -Select-Since the YTM is above the YTC, the bond is likely to be called.Since the YTC is above the YTM, the bond is likely to be called.Since the YTM is above the YTC, the bond is not likely to be called.Since the YTC is above the YTM, the bond is not likely to be called.Since the coupon rate on the bond has declined, the bond is not likely to be called.Item 3

2. What is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places.

     %

   Is this yield affected by whether the bond is likely to be called?

   1. If the bond is called, the capital gains yield will remain the same but the current yield will be different.
   2. If the bond is called, the current yield and the capital gains yield will both be different.
   3. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different.
   4. If the bond is called, the current yield will remain the same but the capital gains yield will be different.
   5. If the bond is called, the current yield and the capital gains yield will remain the same.

   -Select-IIIIIIIVVItem 5

3. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.

     %

   Is this yield dependent on whether the bond is expected to be called?
   1. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called.
   2. If the bond is expected to be called, the appropriate expected total return is the YTM.
   3. If the bond is not expected to be called, the appropriate expected total return is the YTC.
   4. If the bond is expected to be called, the appropriate expected total return will not change.
   5. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called.

1) A 20-year bond pays a coupon of 8 percent per year (coupon paid semi-annually). The bond has a par value of $1000. What will the bond sell for if the nominal YTM is: a) 10 percent b) 6 percent c) 8 percent

Berkshire Building Services generated $98 million in sales during the current year, and its year-end total assets were $118 million. Also, at year-end, current liabilities were $5,895,000 consisting of $3,144,000 of accounts payable, $1,572,000 of accruals, and $1,179,000 of notes payable. The firm’s profit margin was 7% and payout ratio was 38%. The firm considered itself at full capacity in the current year. Looking ahead to next year, estimate the additional funds needed if the firm intends to grow sales by 8%.

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. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 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 166,750 152,250 Paid-in capital in excess of par, common stock 39,500 0 Retained earnings 183,520 119,845 Total liabilities and equity $ 519,511 $ 446,920 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 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 2017 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.)

2. Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)

Based on the following data and using a 365-day year:

a. Compute the accounts receivable turnover. Round your answer to two decimal places.

b. Compute the number of days' sales in receivables for year 2. Round your answer to two decimal places.
days

c. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. How does this situation compare to the industry average?

Is it slightly better or slightly worse than the average?

Kollar Corp.’s transactions for the year ended December 31, Year 6, included the following:

Kollar’s net cash used in financing activities for Year 6 was

A $450,000

B $500,000

C $250,000

D $50,000