You will be paying $10,600 a year in tuition expenses at the end of the next two years. Bonds currently yield 7%.

a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)

Present value:|__________________|

Duration: |__________________|years

b. What is the duration of a zero-coupon bond that would immunize your obligation and its future redemption value? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Future redemption value" to 2 decimal places.)

Duration: |______________________|years

Future redemption Value: |______________________|

c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 8%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Net position changes by:

d. What if rates fall to 6%? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Net position changes by:

A couple received a $108,000 inheritance the year they turned 48 and in-vested it in a fund that earns 6.5% compounded semiannually (every six months). They leave the money in the account for 12 years (until they retire), and then want to get regular payments from the account, so that all the money is paid during the next 20 years. How much will the couple receive in these regular payments?

You are engaged in the audit of the financial statements of Holman Corporation for the year ended December 31, 20X6. The accompanying analyses of the Property, Plant, and Equipment and related accumulated depreciation accounts have been prepared by the chief accountant of the client. You have traced the beginning balances to your prior year’s audit working papers.

*Depreciation expense for the year.

All plant assets are depreciated on the straight-line basis (no residual value taken into consideration) based on the following estimated service lives: building, 25 years; all other items, 10 years. The company’s policy is to take one half-year’s depreciation on all asset additions and disposals during the year.

Your audit revealed the following information:

The company completed the construction of a wing on the plant building on June 30. The service life of the building was not extended by this addition. The lowest construction bid received was $24,700, the amount recorded in the Buildings account. Company personnel constructed the addition at a cost of $21,400 (materials, $9,300; labor, $7,300; and overhead, $4,800).

On August 18, $6,800 was paid for paving and fencing a portion of land owned by the company and used as a parking lot for employees. The expenditure was charged to the Land account.

The amount shown in the machinery and equipment asset retirement column represents cash received on September 5 upon disposal of a machine purchased in July 20X2 for $62,000. The chief accountant recorded depreciation expense of $4,700 on this machine in 20X6.

Harbor City donated land and a building appraised at $280,000 and $580,000, respectively, to Holman Corporation for a plant. On September 1, the company began operating the plant. Since no costs were involved, the chief accountant made no entry for the above transaction.

Required:

Prepare the adjusting journal entries that you would propose at December 31, 20X6, to adjust the accounts for the above transactions. Disregard income tax implications. The accounts have not been closed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round any division. Round your answers to the nearest dollar amount.)

A. Record the entry to correct the June 30, 20X6 entry for the addition to the building and to correct depreciation.

B. Record the entry to correct the August 13, 20X6 entry for the paving and fencing of the parking lot, and to provide the depreciation thereon.

C.Record the entry to correct the September 5, 20X6 entry for the disposal of the machine and the depreciation thereon.

D. Record the entry for the appraised value of the land and building donated by Harbor City, and the depreciation of the building thereon.

The comparative balance sheets of Sheridan Inc. at the beginning and the end of the year 2017 are as follows.

Net income of $47,980 was reported, and dividends of $28,240 were paid in 2017. New equipment was purchased and none was sold.

Prepare a statement of cash flows for the year 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

You are considering investing in a project in Mexico. The project will be a 2 year project, has an initial cost of 100K USD, and expected after tax profit of 1 million MXP per year. You expect the MXP to be valued at 0.12 USD/MXP. There are two major risks that you think have the potential to significantly affect project performance, which you assume are independent: * You think with probability of 0.22 that the MXP will depreciate to 0.1 USD/MXP. * You also think that with probability of 0.22 the Mexican economy will weaken substantially, in which case the project's after tax annual cash flow will be only 600K MXP. Your required return on the project is 18%. What is the expected value of the NPV of this project, as measured in USD?

At the beginning of year one, there is no government debt outstanding. The government runs a $100 billion deficit in year one. Interest at a nominal rate of 10% must be paid starting in year two. Assume nominal GDP in year one is $2000 billion and the nominal growth rate of GDP is 4%. Assume the government balances its primary budget in the future and the interest rate and growth rate do not change. (a) What will be the government deficit in years two, three, four, and five? (b) What will be the value of government bonds outstanding at the end of the fifth year? (c) What will be the debt—GDP ratio at the end of year five?

At the beginning of the year, Patrick Company acquired a computer to be used in its operations. The computer was delivered by the supplier, installed by Patrick, and placed into operation. The estimated useful life of the computer is five years, and its estimated residual value is significant.

After reading the above prompt, respond to the following:

What costs should Patrick capitalize for the computer?

What is the objective of depreciation accounting?

What is the rationale for using accelerated depreciation methods?

Precision Construction entered into the following transactions during a recent year.

1. 1-b. Prepare the journal entries for each of the above transactions.

2. 2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Precision Construction should report for the quarter ended March 31. The equipment is depreciated using the double-declining-balance method with a useful life of five years and $51,000 residual value.

3. 3. Prepare a journal entry to record the depreciation and amortization calculated in requirement 2.

A corporation had the following assets and liabilities at the beginning and end of this year.

1. Owner made no investments in the business, and no dividends were paid during the year.
2. Owner made no investments in the business, but dividends were $700 cash per month.
3. No dividends were paid during the year, but the owner did invest an additional $45,000 cash in exchange for common stock.
4. Dividends were $700 cash per month, and the owner invested an additional $35,000 cash in exchange for common stock.

Determine net income or net loss for the business during the year for each of the above separate cases: (Decreases in equity should be indicated with a minus sign.)