If a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 4.4 percent coupon bond with annual coupon payments and a face value of $1,000.

a. Assume the yield to maturity is 3.4 percent.

What is the current value of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Bond price today            $

What will the bond value be in one year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Bond price in one year            $

What is the rate of return for the first year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Rate of return             %

b. Assume the yield to maturity is 5.4 percent.

What is the current value of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Bond price today            $

What will the bond value be in one year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Bond price in one year            $

What is the rate of return for the first year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Rate of return             %

On April 1 of the current year, a company purchased and placed in service a machine with a cost of $240,000. The company estimated the machine's useful life to be four years or 60,000 units of output with an estimated salvage value of $60,000. During the current year, 12,000 units were produced. Prepare the necessary December 31 adjusting journal entry to record depreciation for the current year assuming the company uses:

1.The straight-line method of depreciation

2.The units-of-production method of depreciation

3.The double-declining balance method of depreciation

The E.N.D. partnership has the following capital balances as of the end of the current year:

Answer each of the following independent questions:

1. Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $237,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?

2. Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $315,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.)

It determined at the end of the year you had 30% turnover (demand) of a specfic item and you would like 100% annually. How much do you reduce (forecast) inventory to achieve that 100% turnover?

Suppose the mean income of firms in the industry for a year is 55 million dollars with a standard deviation of 3 million dollars. If incomes for the industry are distributed normally, what is the probability that a randomly selected firm will earn less than 60 million dollars? Round your answer to four decimal places.

In YEAR 1, the price of gadgets is $2, while the price of the single variable input used is $28. A profit-maximizing gadget producer uses 9 units of input to produce and sell 252 units of gadgets, earning profit of $2*252 - $28*9 = $252 In YEAR 2, the price of gadgets is $3, while the price of the single variable input used is $18. A profit-maximizing gadget producer uses 49 units of input to produce and sell 588 units of gadgets, earning profit of $3*588 - $18*49 = $882 A production plan is feasible if it lies BELOW a firm's iso-profit lines. Which of the following production plans (input-output combinations) are feasible for (within the technology set of) a profit-maximizing gadget producer?

(a) use 15 units of input to produce 330 units of gadgets

(b) use 20 units of input to produce 400 units of gadgets

(c) use 25 units of input to produce 450 units of gadgets

(d) use 30 units of input to produce 470 units of gadgets

The following company is expected to grow rapidly for the first four year. The EPS is expected to grow at 30, 18, 12, and 9 percent, respectively for the first four years. After the fast growth for the first four years the growth slows down to 7 percent rate. The company is expected to keep this growth for the long-term. The company’s initial earnings per share EPS is $2.4. The required net capital expenditure per share for the next five years are $3, $2.5, $2, $1.5, and $1. The required net working capital expenditure is the half of fixed capital expenditure for each year The company will borrow as much as the 30 percent of total capital investment required (fixed capital plus working capital) for each year The cost of equity is assumed to be flat 10.4 percent for the entire period. P/E ratio of similar companies is 30. Question: Estimate the free cash flow to equity holders (FCFE) for the first five years What is the per-share value of this company? (Use free cash flow valuation).

ABC purchased GHJ 5 year bond that is not sure if it will sell or hold until maturity for $25,000 cash. Face of the note is $20,000.It pays 10% interest annually (1/1). Fair value of the bond at year-end was $24,000. Straight line. Prepare all journal entries.

Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $1,000,000. The estimated residual value was $92,800. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 324,000 units. Actual annual production was as follows:

Required:

1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your intermediate calculations.)

a. Straight-line.

b. Units-of-production.

c. Double-declining-balance.

1. Given below are some of the ratios for the year 2012 for Two Store A and B.

Ａ. Comment on the current ratio of Store A and B.

B. Comment on the acid test ratio of Store A and B.

C. Comment on the accounts receivable turnover ratio of Store A and B.

D. Comment on the Inventory turnover ratio of Store A and B.

E. Comment on the overall liquidity of both the stores.

2. The price earnings ratio measured as Market price per share of stock divided by Earnings per share is 12.4 times for Store A for the year 2009 whereas Store B price earnings ratio is 10.4 times for the same period. The industry average is 21.3 times. Comment on the price earnings ratio of both Store A and B.

3. The Times interest earned ratio measured as Net income before interest and taxes divided by interest is 9.6 times for Store A for the year 2009 whereas Store B times interest earned ratio is 2.9 times for the same period. The industry average is 16.1 times. Comment on the time interest earned ratio of both Store A and B.