Under GAAP, which of the following costs are normally expensed in the year incurred, regardless of the expected economic benefit?
Group of answer choices
A) Goodwill created as a result of a business combination
B) Software development costs to achieve technological feasibility
C) A patent purchased from an independent third party
In: Finance
What is the present value of 1,400 per year annually at the end of years 25 to 43 if the interest rate is 7%
14,082.72
13,759.64
14,469.83
2,852.68
2,594.73
In: Finance
In: Finance
What is the yield to maturity of a eight-year, $10,000 bond with a 5.1% coupon rate and semiannual coupons if this bond is currently trading for a price of $8,928?
|
8.24% |
||
|
6.86% |
||
|
3.43% |
||
|
9.61% |
In: Finance
Lasso Corp. wants to forecast for 2020. The end of year statements for 2019 are as follows:
Income Statement
Revenues $245,622
COGS - 142,461
Gross Profits 103,161
Expenses - 49,124
EBIT 54,037
- Interest - 9,642
EBT 44,395
-Taxes -7,991
EAT 26,637
Balance Sheet
Current Assets $179,304 Current liabilities $85,700
Fixed Assets $140,930 Long-term debt 78,180
Total Assets $320,234 Total liabilities $163,880
Equity $156,354
Total Liabilities
& Equity $320,234
Management expects the following for 2020:
An 8% increase in revenues; COGS will increase by 2% from its current percent of sales. Expenses will stay at the same percent of sales; Current assets will also stay at their same percent of sales. Fixed assets will increase by $18,000 ; All interest will be paid at a 12% interest rate and will only be on long-term debt, which is not expected to change; the tax rate is expected to stay at the same rate. No dividends are paid and any shortfalls should be made up in current liabilities.
Prepare a forecasted income statement and balance sheet for 2020. Work to the nearest dollar.
In: Finance
The following information pertains to DEF Company, Inc. for the year 2018.
Liabilities at the end of the year, December 31, 2018 = $1,200
Contributed capital at the end of the year, December 31, 2018 = $700
Beginning retained earnings, January 1, 2018 = $300
Revenue during 2018 = $7,500
Expenses during 2018 = $6,800
Distributions to owners during 2018 = $100
What is the amount of the company's total assets at December 31, 2018?
| a. |
$2,800 |
|
| b. |
$2,700 |
|
| c. |
$2,600 |
|
| d. |
$2,400 |
In: Finance
A 30 year project is estimated to cost $35 million and provide annual cash flows of $5 million per year in years 1-5; $4 million per year in years 6-20 and $2 million per year in years 21-30. If the company's required rate of return is 10%, determine the NPV.
In: Finance
Using the following information, determine the maturity risk premium on 10 year bonds:
| Rate | % |
| inflation | 1.59 |
| T-bill | 5.00 |
| 10y T-Bond | 6.00 |
| 10y AAA Corporate | 6.35 |
| 10y AA Corporate | 7.71 |
In: Finance
1. (TRUE or FALSE?) Compounding periods can be a year, a quarter, a month, a week, or even a day, and the shorter the period, the more frequently interest payments are compounded, and the larger the future value of $1 for a given time period.
2. (TRUE or FALSE?) A dollar today is worth more than a dollar received in the future.
3. (TRUE or FALSE?) Interest earned on interest grows exponentially as the investment period increases.
In: Finance
You want to be able to spend the current equivalent of $65,993 per year during your retirement that will start in 12 years, and go for 29 years.
You expect inflation to be 4% per year during your retirement.
How much would you have to invest in nominal terms in years 1 to 10, to fully pay for your retirement if your investments earn 7.67% APR (annual compounding)
In: Finance