A company sold a piece of equipment at the beginning of year 1, receiving a $29,000, two – year 1% note. Interest is paid at the end of each year. Market interest rates are assumed to be 10%

1. Calculate the present value of the note receivable

2. Prepare journal entries for the sale, interest revenue, and cash collection each year for two years

A ten year bond has a coupon rate of 7% and a yield to maturity of 9%, will you be willing to pay $1100 for this bond. Please explain.

A company purchased a new equipment for $59,000. Assume it will be retired in year 8, with a salvage value of $3,000. Calculate the depreciation for each year of the useful life using the following three methods. Please show your work. a. Straight-line method b. Double declining-balance method c. Sum-of-the-years-digits method c.Among various financial performance measures, which one does the depreciation have a role in?

Sales on account for the first two months of the current year are budgeted as follows.

All sales are made on terms of 2/10, n/30 (2 percent discount if paid in 10 days, full amount by 30 days); collections on accounts receivable are typically made as follows.

Compute the estimated cash collections on accounts receivable for the month of February.

The current annualized yield on a 1-year STRIPS is 2.4% and the annualized yield on a 2-year STRIPS is 2.6%.  According to the expectations theory of interest rates, what will be the annualized yield on a 1-year STRIPS one year from now? What would you expect to pay for this STRIPS with a $1,000 face value?

Consider the following a. What is the duration of a four-year Treasury bond with a 10 percent semiannual coupon selling at par ? b. What is the duration of a three- year Treasury bond with a 10 percent semiannual coupon selling at par ? c. What is the duration of a two-year Treasury bond with a 10 percent semiannual coupon selling at par ? (For all requirements, do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

a. Duration of the bond ______ Years

b. Duration of the bond _______ Years

c. Duration of the bond _________ Years

Xavier Corporation predicts that net income in the coming year will be $300 million. There are 30 million shares of common stock outstanding and Xavier maintains a debt to equity ratio of .8. The current market price per share for Xavier is $100.

                        Required:

1. If Xavier wishes to maintain its present debt-equity ratio, calculate the maximum investment funds available without issuing new equity and the increase in borrowing that goes along with it. Show Computations
2. Suppose that the firm uses a residual dividend policy. Planned capital expenditures total $150 million. Based on this information, what will be the dividend yield and the dividend per share? Show computations
3. Suppose Xavier plans no capital outlays for the coming year. What will be the dividend yield and the dividend per share, assuming that Xavier uses the residual dividend policy? Show Computations

Explain why the Factory Overhead Balance must be disposed of at year end?

The following information pertains to the acquisition of an asset by Torres Company during the year;

Required:

1.1 From the given information, journalize

a.     the acquisition

b.     the incurrence of expense

c.     the granting of allowance

d.     the partial payment

e.     the full payment of account

1.2 Determine the cost of the asset.

2.   The following data are taken from the sheet at the end of the current year:

Cash                                                        442,000

Short-term Investments                           886,000

Notes Payable, long-term                         230,000

Prepaid Insurance                                      75,000

Accounts Payable                                      875,000

Accrued Liabilities                                    520,000

Inventory                                               630,000

Accounts Receivable                                120,000

Salaries Payable                                      185,000

Intangible Assets                                      600,000

Property, Plant and Equipment                1,900,000         

                                                          Computation         Interpretation—what does the result mean?

Compute:     a. Working capital: ___________________   __________________________________

b. Current ratio:       ___________________   __________________________________

         c. Quick ratio:           ___________________   __________________________________

d. Consider the additional information. Compare results and interpret your findings: Are the results acceptable?   Explain.

1. Current ratio, prior year: 1.2

2. Industry average: 1.0