Derozan Corp. manufactured equipment at a cost of $167,770 and leased it to B Corp. on January 1, 2019 for an eight-year period expiring December 31, 2026. The asset’s economic life is 10 years. Equal payments under the lease are $46,930 and are due on January 1 of each year. The first payment was made on January 1, 2019. The implicit rate used by Derozan is 8%.

Additional information:                                           

Present value of an annuity due of $1 for 8 periods at 8%          6.21                                      

Present value of an annuity due of $1 for 16 periods at 4%       12.12                                       

What is the amortization expense B will take for the year ended December 31, 2019?

5. When it began business in 2026, Ajax, Inc. issued 100,000 shares of $2 par stock for $1,000,000. In the following year, the company repurchased 10,000 shares for $200,000. In 2028, 5,000 of the repurchased shares were resold for $160,000. In its balance sheet dated December 31, 2028, Coy, Inc.'s treasury stock account shows a balance of:

The payoff matrix for a game is 4 −1 5 −6 2 1 1 −4 2 . (a) Find the expected payoff to the row player if the row player R uses the maximin pure strategy and the column C player uses the minimax pure strategy. (b) Find the expected payoff to the row player if R uses the maximin strategy 40% of the time and chooses each of the other two rows 30% of the time while C uses the minimax strategy 50% of the time and chooses each of the other two columns 25% of the time. (Round your answer to two decimal places.)

MONTH   ZEMIN CORP.   MARKET
1 7% 4%
2 2% 1%
3 2% 2%
4 -3% -1%
5 4% 2%
6   2% 3%

a. Given the​ holding-period returns shown above, compute the average returns and the standard deviations for the Zemin Corporation and for the market.

b. If​ Zemin's beta is 1.04 and the​ risk-free rate is 9 ​percent, what would be an appropriate required return for an investor owning​ Zemin? ​(​Note: Because the returns of Zemin Corporation are based on monthly​ data, you will need to annualize the returns to make them compatible with the​ risk-free rate. For​ simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by​ 12.)

c. How does​ Zemin's historical average return compare with the return you believe to be a fair​ return, given the​ firm's systematic​ risk?

a. The average monthly return for the Zemin Corporation is ____%. ​(Round to two decimal​ places.)

The average monthly return for the market is ____%. ​(Round to two decimal​ places.)

The standard deviation for the Zemin Corporation is ____​%. ​(Round to two decimal​ places.)

The standard deviation for the market is ____%. ​(Round to two decimal​ places.)

b. If​ Zemin's beta is 1.04 and the​ risk-free rate is 9 ​percent, an appropriate required return for an investor owning Zemin would be _____%. ​(Round to two decimal​ places.)

c. Given the​ stock's systematic​ risk, Zemin's historical return is ______ what we would consider a fair return.

On January 1, 2019, Drennen Inc. issued $4.6 million face amount of 8-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2026. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.)

Required:
a. Calculate the proceeds (issue price) of Drennen Inc.'s bonds on January 1, 2019, assuming that the bonds were sold to provide a market rate of return to the investor.

xercise 19-30 (Algo) Stock appreciation rights; cash settlement (Appendix 19B)

As part of its stock-based compensation package, International Electronics granted 14 million stock appreciation rights (SARs) to top officers on January 1, 2021. At exercise, holders of the SARs are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares have a market price of $50 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $4.50 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022, 2023, 2024, and 2025, is $5.50, $4.50, $6, $1.40, and $4.50, respectively. All recipients are expected to remain employed through the vesting date.

Required:

1. to 3. Prepare the appropriate journal entries pertaining to the SARs on January 1, 2021 and December 31, 2021–December 31, 2024. The SARs remain unexercised on December 31, 2025, prepare the appropriate entry.
4. The SARs are exercised on June 6, 2026, when the share price is $60, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date.

Exercise 19-30 (Algo) Stock appreciation rights; cash settlement (Appendix 19B)

As part of its stock-based compensation package, International Electronics granted 14 million stock appreciation rights (SARs) to top officers on January 1, 2021. At exercise, holders of the SARs are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares have a market price of $50 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $4.50 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022, 2023, 2024, and 2025, is $5.50, $4.50, $6, $1.40, and $4.50, respectively. All recipients are expected to remain employed through the vesting date.

Required:

1. to 3. Prepare the appropriate journal entries pertaining to the SARs on January 1, 2021 and December 31, 2021–December 31, 2024. The SARs remain unexercised on December 31, 2025, prepare the appropriate entry.
4. The SARs are exercised on June 6, 2026, when the share price is $60, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date.

1. For each of the following, forecast how prices and output will change by drawing and AD-AS graph, and explain your answers using the step by step method to forecast macroeconomic outcomes.

1. The latest data on consumer confidence indicate that consumers have become pessimistic about the future of the economy and are therefore spending less
2. Innovations in solar cell technology cause energy prices to decline across the country.
3. The federal government passes a new bill that dramatically increases government spending on the military
4. The Mexican government eliminates the tariffs it charges on goods exported from Canada
5. Top executives report that they’re quite uncertain about the future, as trade deals with the country’s largest trading partners are being renegotiated and remain in flux
6. 最大的运输公司的自动化已大大降低了全国企业的运输成本。

A bond that settles on June 7, 2016, matures on July 1, 2036, and may be called at any time after July 1, 2026, at a price of 166. The coupon rate on the bond is 7.6 percent and the price is 178.00. What are the yield to maturity and yield to call on this bond?

Yield to maurity:

Yield to call:

ZEN Inc. is financed by 3 million shares of common stock and by $5 million face value of 8% convertible debt maturing in 2026. Each bond has a face value of $1,000 and a conversion ratio of 200. What is the value of each convertible bond at maturity if ZEN’s net assets are:

1. $30 million?
2. $4 million?
3. $20 million?
4. $5 million?