What is the present value of $5,000 received:
a. Twenty years from today when the interest rate is 8% per year?
b.Ten years from today when the interest rate is 8% per year?
c.Five years from today when the interest rate is 8% per year?
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a. Twenty years from today when the interest rate is 8% per year?The present value of $5,000 received 20 years from today when the interest rate is 8% per year is $____. (Round to the nearest dollar.)
b.Ten years from today when the interest rate is 8% per year? The present value of $5,000 received 10 years from today when the interest rate is 8% per year is $______. (Round to the nearest dollar.)
c. Five years from today when the interest rate is 8% per year? The present value of $5,000 received 5 years from today when the interest rate is 8% per year is $____.(Round to the nearest dollar.)
In: Finance
Dividends Per Share
Seventy-Two Inc., a developer of radiology equipment, has Shares of ownership of a corporation.stock outstanding as follows: 70,000 shares of cumulative preferred 3% stock, $20 A dollar amount assigned to each share of stock.par, and 410,000 shares of $25 par common.
During its first four years of operations, the following amounts were distributed as dividends: first year, $31,000; second year, $76,000; third year, $100,000; fourth year, $110,000.
Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00".
| 1st Year | 2nd Year | 3rd Year | 4th Year | |
| A class of stock with preferential rights over common stock.Preferred stock (dividends per share) | $ | $ | $ | $ |
| The stock outstanding when a corporation has issued only one class of stock.Common stock (dividends per share) | $ | $ | $ | $ |
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In: Accounting
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Edison Corporation needs to raise funds to finance a plant expansion and has decided to issue 25-year zero coupon bonds to raise the money. The required return on the bonds will be 8 percent. Assume a par value of $1,000 and semiannual compounding. |
| a. | What will these bonds sell for at issuance? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b. |
Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| c. |
Using the straight-line method, what interest deduction can the company take on these bonds in the first year? In the last year?. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
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In: Finance
5. Jasper Corp, has the following Stockholders’ Equity account balances and activity for Year 2.
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Net income |
$14,750,000 |
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Retained earnings |
$13,250,000 |
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Preferred stock shares outstanding |
1,000 |
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Common stock shares outstanding at January 1, Year 2 |
6,855,000 |
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Additional Common shares issued at July 1, Year 2 |
20,000 |
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3-for-1 stock split at December 31, Year 2 |
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Preferred Dividends |
$15,000 |
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Common Dividends |
$58,000 |
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Year 1 EPS |
$2.06 |
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Earnings per share = __________________ / ___________________* = ________
* Compute Denominator: Weighted average common shares outstanding
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Date |
Shares |
Portion of year |
Weighted Average Shares |
|
January 1, Y2 |
6,855,000 |
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July 1, Y2 |
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Weighted Average December 31 before split |
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Stock split 3-for-1 |
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*Total Weighted Average, 12/31/Y2 |
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Note: Year 1 restated |
$2.06 / 3 =_____ |
Did performance improve in Year 2 as compared to Year 1? _________________Why?
In: Accounting
Suppose that you work for a U.S. senator who is contemplating writing a bill that would put a national sales tax in place. Because the tax would be levied on the sales revenue of retail stores, the senator has asked you to prepare a forecast of retail store sales for year 8, based on data from year 1 through year 7. The data are:
| (c1p8) | Year | Retail Store Sales |
| 1 | $ 1,225 | |
| 2 | 1,285 | |
| 3 | 1,359 | |
| 4 | 1,392 | |
| 5 | 1,443 | |
| 6 | 1,474 | |
| 7 | 1,467 |
Use the naive forecasting model presented in this chapter to prepare a forecast of retail store sales for each year from 2 through 8.
Prepare a time-series graph of the actual and forecast values of retail store sales for the entire period. (You will not have a forecast for year 1 or an actual value for year 8.)
Calculate the MAPE for your forecast series using the values for year 2 through year 7. (please show how to plug in Excel)
In: Finance
Estimate Cash flows of the three-year project by filling in the values in the table below. · Equipment will cost $40,000, Shipping and installation charges for the equipment are expected to total $5,000. ·The Machine is depreciated using straight line method to a value of $0 at the end of it's life. ·Net working capital is $10,000 initially and $5,000 in year 1. All investment in net working capital is recovered back at the end of the project ·Total revenues will be $50,000 in year 1, $60,000 in year 2 and $75,000 in year 3. ·Operating costs = $25,000 during the first year and increase at a rate of 6 percent per year over the 3-year project ·Marginal tax rate is 40 percent. Cost of capital = 10%
| Year | 0 | 1 | 2 | 3 |
|
Revenue |
||||
| -Operating Cost | ||||
| - Depreciation | ||||
| Operating Earnings Before Taxes | ||||
| - Taxes (40%) | ||||
| Operating Earnings After taxes | ||||
| + Depreciation | ||||
| - Change in Net working Capital | ||||
| - Initial Investment in Machinery | ||||
| Net Cash Flows |
In: Finance
| Yearly Returns | Microsoft | Apple | Market | |||
| Jan 2010 - Dec 2010 | Year. 1 | -0.34% | 5.18% | 14.93% | ||
| Jan 2011 - Dec 2011 | Year. 2 | -0.37% | 7.93% | 2.06% | ||
| Jan 2012 - Dec 2012 | Year. 3 | 0.40% | 5.15% | 15.84% | ||
| Jan 2013 - Dec 2013 | Year 4 | 2.81% | 5.99% | 32.21% | ||
| Jan 2014 - Dec 2014 | Year. 5 | 1.91% | 4.62% | 13.53% | ||
| Jan 2015 - Dec 2015 | Year. 6 | 1.75% | 3.32% | 1.34% | ||
| Jan 2016 - Dec 2016 | Year. 7 | 1.37% | 3.94% | 11.80% | ||
| Jan 2017 - Dec 2017 | Year. 8 | 2.72% | 2.84% | 21.69% | ||
| Jan 2018 - Dec 2018 | Year. 9 | 1.41% | 2.13% | -4.45% | ||
| Jan 2019 - Dec 2019 | Year. 10 | 4.06% | 5.58% | 31.29% | ||
| Average Return | 1.57% | 4.67% | 14.02% | |||
| Std Deviation | 1.42% | 1.69% | 12.21% | |||
| Correlation with the market | 0.61 | 0.29 | 1.00 | |||
| Beta | 0.07 | 0.04 | 1.00 | |||
In: Finance
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
| Current Year | Previous Year | |||
| Accounts payable | $510,000 | $130,000 | ||
| Current maturities of serial bonds payable | 320,000 | 320,000 | ||
| Serial bonds payable, 10% | 1,270,000 | 1,590,000 | ||
| Common stock, $1 par value | 60,000 | 80,000 | ||
| Paid-in capital in excess of par | 660,000 | 660,000 | ||
| Retained earnings | 2,280,000 | 1,810,000 | ||
The income before income tax was $588,300 and $514,800 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.
| Current year | |
| Previous year |
b. Determine the times interest earned ratio for both years. Round to one decimal place.
| Current year | |
| Previous year |
c. The ratio of liabilities to stockholders' equity has (improved or deteriorated) and the times interest earned ratio has (improved or deteriorated) from the previous year. These results are the combined result of a (larger or smaller) income before income taxes and (larger or lower) interest expense in the current year compared to the previous year.
In: Accounting
Rebecca is 29 and considering going to graduate school so she
sits down to calculate whether it is worth the large sum of money.
She knows that her first year tuition will be $54,000, due at the
beginning of the year (that is, right away). She estimates that the
2nd year of tuition would be $56,000. She also estimates that her
living expenses above and beyond tuition will be $10,000 per year
(assume this extra expense occurs at the end of each year only when
she is in graduate school) for the first year and will increase to
$11,000 the next year. She expects to earn $24,000 for an
internship (Assume this inflow occurs one year from now). Were she
to forgo graduate school she would be able to make $65,000 at the
end of this year and expects that to grow 4% annually. With a
graduate degree, she estimates that she will earn $116,000 per year
after graduation, again with annual 4% increases. Either way, she
plans to work until 64. The interest/discount rate is 5%. What is
the NPV of her graduate education?
A2745138.44
B 895157.84
C900268.95
D898497.46
In: Finance
On November 1, Year 6, Bob the Builder purchases a cookie after having a dream in which a stranger gave him a giant fortune cookie. A week later, he finds out that he won $100,000. On December 1, Year 6, he cashes in his lottery ticket and forms a corporation called Fortune Cookie Inc. (FCI) with his lottery money. When FCI is formed, there is no other assets or liabilities. From the formation of FCI to the end of Year 11, the following transaction is the only transaction that has happened:
FCI issues an installment note on February 1, Year 7 (with a required yield of 6%) in exchange for the land that it purchases from Mr. Mac. Mr. Mac’s real estate agent had listed the land on the market for Box3A: 240,000 . The note calls for four equal blended payments of
Box3B: 60,000 that are to be made at February 1, Year 8, Year 9, Year 10, and Year 11. Note that FCI’s fiscal year end is December 31.
What is the amount of total current liabilities that should be reported on December 31, Year 8 Statement of Financial Position?
In: Accounting