3. Suppose that a firm has borrowed $1000 in the current year at a 10% interest rate, with a commitment to repay the loan (principal and interest) in equal annual installments over the following five years. Calculate:

1. the amount of the annual repayment;
2. the stream of interest payments which can be entered in the tax calculation of the private benefit-cost analysis.

Answer:

(i) $263.80

(ii) year 1 = $100; year 2 = $83.62; year 3 = $65.60; year 4 = $45.78; year 5 = $23.98

I need to know the process to solve it.

Please do it by type not pics.

1.$2,000,000 ten year note with 10% interest. The market rate is 8.5%. The interest payments are made monthly and interest compounds monthly.

·         How much cash was received in year 1?    

·         What was the amortized amount of the premium in year 2 - month 3?      

·         How much interest revenue was recognized in year 3 - month 4?

·         What is the carrying value of the note at the end of year 4?          

·         What is the balance of the discount account correlated with this note at the end of year 3?

Spencer Company's inventory records for the most recent year contain the following data:

Spencer Company sold a total of 19,200 units during the year.  

Beginning Inventory 4,000 $ 8.00

Purchases during year 16,000 $ 12.00

1. Using the average-cost method, compute the cost of goods sold and ending inventory for the year.  

2. Using the FIFO method, compute the cost of goods sold and ending inventory for the year.

3. Using the LIFO method, compute the cost of goods sold and ending inventory for the year.  

Nobel Tech Inc. is building a new production line. The cost of the production line is $3 million in the current year and $2 million in the following year. The production line is expected to bring in cash inflows of $1.6 million in year 2, and $2 million each year from year 3 to year 7. The company uses a cost of capital of 10% on all the projects.

The discounted payback period of this project is ____________.

Group of answer choices

a. 4.5 years

b. 6.5 years

c. 3.7 years

d. 5.5 years

A machine costing $209,400 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 122,800 in 1st year, 123,200 in 2nd year, 121,500 in 3rd year, 128,500 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. Identify the straight-line, units-of-production and double-declining-balance.

Tommy plans to retire in 25 years (1st withdrawal in year 26). He is told by Simon that a desirable standard of living in 26 years will require $180,249 per year. Tommy wants to be able to maintain that level of purchasing power forever (Assume inflation = 3% per year). Tommy plans to increase his savings by 2% per year and expects to earn 6% per year on his investments.

How much does Tommy have to save the first year to fund his retirement goal?

Trooper limited is an American company which needs to raise US$1,000,000 for its expansion inside US. The options are:

a. A 2-year floating rate note at 1% above the 1-year US Dollar rate. Interest is paid once a year.

b. A 2-year bond sold in the US at a fixed interest rate of 5%.

Currently, the 1-year US dollar LIBOR rate is 3.50% and is expected to rise to 4.5% next year. Which security should the treasurer choose if borrowing costs are same for both securities?

problem 3 (ii)

Michael consumes apples and pears. In year 1, apples cost $1 each, pears cost $2 each, Michael buys 4 apples and 2 pears in year 1. In year 2, apples cost $2 each and pears cost $1 each, and michael buys 2 apples and 4 pears.

Define the implicit price deflator as nominal spending divided by real spending; compute the deflator for each year. How does the deflator change from year 1 to year 2?

Q2

: Kaleem Limited (KL) is a listed company and its accounting year ends on 30 June. KL is now considering to change its accounting year from 30 June to 30 September. Under the provisions of the Income Tax Ordinance, 2001:
(a) Briefly describe normal, special and transitional tax year.
(b) State the requirements regarding change in tax year from normal to special.
(c) State the tax year corresponding to the income year ended 30 September 20X8 and the due date for filing the return of income.