Please show all the steps you've done to reach the final answer. I am trying to learn, so please show your work. Typing your answer is important.
1) The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4Runners for company principals. The purchase price for the Ford Explorer will be $30,750. Annual maintenance costs for the Explorer are expected to be $575 per year more than that of the 4Runner. The purchase price for Toyota 4Runners is 35,250 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm’s MARR is 15% per year, which vehicle should it buy?
In: Economics
On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest semi-annually, on September 30 and March 31. The first interest payment is on September 30, 2020. The bonds are issued at a price of 1141/4 (i.e., $228,500). The issuance price implies an effective interest rate of 7%. Bond issue costs are $10,000, which are amortized using the straight-line method. Adtech’s fiscal year-end is on December 31.
1.Prepare all necessary journal entries in relation to these bonds between March 30, 2020 and April 1, 2021.
2. What is the amount of the liability that Adtech has to the bondholders on September 30, 2021, after the interest payment on that date?
In: Accounting
1. Baumol and Blinder Chapter 4 Test Yourself # 2, 3 2. Suppose the elasticity of demand equals 2.5. (Hint: write down the formula for ED first.) If the price rises by 10%, what happens to quantity demanded? Be precise! Is this a “large” or “small” change in quantity demanded? If price rises by 10%, will TR rise? Explain with reference to the formula for TR. 3. Suppose the government decided to tax bottled water. Using supply and demand analysis, what do you think will happen to P and to Q? Will Q change a lot or a little? Explain. Is the government “interested” in raising a lot of revenue with this tax? Explain. Book used: Microeconomics Principle and Policy By: William J. Baumol and Alan S. Blinder
In: Economics
The Government of Canada 2-year coupon bond has a face value of $1,000 and pays annual coupons of $30. The next coupon is due in one year. Currently, the one and two-year spot rates on Government of Canada zero coupon bonds are 5% and 5.5%. Use this information to answer part a) and b).
a) What is the correct price for the coupon bond at time zero (immediately)?
A) $925.46
B) $952.41
C) *$953.98
D) $971.68
E) $1009.54
b) What is the expected price for the coupon bond at year one (after the first coupon is paid)?
A) $953.98
B) *$971.69
C) $976.30
D) $980.95
E) $1009.54
Looking for the process work to understand why the solution for part a) is $953.98 and for b) is $971.69.
In: Finance
E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8.75 percent on this stock, how much should you pay today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price $
In: Finance
Miller Corporation's next dividend is expected to be $7. Dividend growth is estimated at 22%, 20%, 10% and then expected to stabilize to 3%. The required rate of return is 10%.
a. Calculate the dividend in the first, second, third, fourth and fifth years. Show all your work. (1 point)
b. Using your answers in a), calculate what price would you be willing to pay for this stock today. Show all your work. (2 points)
In: Finance
In the first stage of manufacturing each final unit of a product, a firm purchases a key input at a price of $3 per unit. The firm then pays a wage rate of $5 for the time that labor is exerted, combining an additional $2 of inputs for each final unit of output produced. The firm sells every unit of the product for $12.
What is the contribution of each unit of output to GDP in the current year?
The contribution of each unit of output to GDP in the current year is?
In: Economics
P14–19Ethics Problem Assume that you are the CFO of a company contemplating a stock repurchase next quarter. You know that there are several methods of reducing the current quarterly earnings, which may cause the stock price to fall prior to the announcement of the proposed stock repurchase. What course of action would you recommend to your CEO? If your CEO came to you first and recommended reducing the current quarter’s earnings, what would be your response?
In: Accounting
North Lake currently has one In‐n-Out franchise. Daily demand for hamburgers in North Lake is given by Q=200-10P. All In-n-Out franchises have costs of TC=50+3Q for producing Q hamburgers.Suppose a second In‐n-Out opens, and the two stores compete by choosing output sequentially, with the current owner choosing first (Stackleberg). How will the equilibrium price for hamburgers change if the new franchise were to open.
In: Economics
In E-commerce industry. “Rivalry among existing competitors takes many familiar forums, including price discounting, new product introductions, advertising campaigns, and service improvements. High rivalry limits the profitability of an industry. The degree to which rivalry drives down an industry’s profit potential depends, first, on the intensity with which companies compete and, second, on the basis of which they compete” . For this discussion forum, describe the intensity and the basis of rivalry in the industry in E-commerce.
In: Economics