Questions
A 30 year project is estimated to cost $35 million and provideannual cash flows of...
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 riskpremium on 10 year bonds:Rate%inflation...
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, aquarter, a month, a week,...
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 $65,993per year during your...
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
you plan to invest $10,000 on the last day of every year for the next five...
you plan to invest $10,000 on the last day of every year for the next five years, if the interest rate on the investment is 6 percent, the present value of your investment is...
In: Finance
Todd is saving $3,000 annually into an account (payments at theend of each year). He...
Todd is saving $3,000 annually into an account (payments at the end of each year). He plans to increase the annual level of savings by 5 percent each year. He can earn 9 percent annually. How much will he have in the account at the end of twenty years?
In: Finance
prepare a complete statement of cash flows using the indirect method for the current year
Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.
| FORTEN COMPANY Comparative Balance Sheets December 31 |
|||||||||||
| Current Year | Prior Year | ||||||||||
| Assets | |||||||||||
| Cash | $ | 67,900 | $ | 85,500 | |||||||
| Accounts receivable | 83,890 | 62,625 | |||||||||
| Inventory | 293,656 | 263,800 | |||||||||
| Prepaid expenses | 1,330 | 2,135 | |||||||||
| Total current assets | 446,776 | 414,060 | |||||||||
| Equipment | 145,500 | 120,000 | |||||||||
| Accum. depreciation—Equipment | (42,625 | ) | (52,000 | ) | |||||||
| Total assets | $ | 549,651 | $ | 482,060 | |||||||
| Liabilities and Equity | |||||||||||
| Accounts payable | $ | 65,141 | $ | 132,675 | |||||||
| Short-term notes payable | 13,600 | 8,400 | |||||||||
| Total current liabilities | 78,741 | 141,075 | |||||||||
| Long-term notes payable | 59,000 | 60,750 | |||||||||
| Total liabilities | 137,741 | 201,825 | |||||||||
| Equity | |||||||||||
| Common stock, $5 par value | 180,750 | 162,250 | |||||||||
| Paid-in capital in excess of par, common stock | 55,500 | 0 | |||||||||
| Retained earnings | 175,660 | 117,985 | |||||||||
| Total liabilities and equity | $ | 549,651 | $ | 482,060 | |||||||
| FORTEN COMPANY Income Statement For Current Year Ended December 31 |
|||||||
| Sales | $ | 642,500 | |||||
| Cost of goods sold | 297,000 | ||||||
| Gross profit | 345,500 | ||||||
| Operating expenses | |||||||
| Depreciation expense | $ | 32,750 | |||||
| Other expenses | 144,400 | 177,150 | |||||
| Other gains (losses) | |||||||
| Loss on sale of equipment | (17,125 | ) | |||||
| Income before taxes | 151,225 | ||||||
| Income taxes expense | 41,050 | ||||||
| Net income | $ | 110,175 | |||||
Additional Information on Current Year Transactions
- The loss on the cash sale of equipment was $17,125 (details in b).
- Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash.
- Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term note payable for the balance.
- Borrowed $5,200 cash by signing a short-term note payable.
- Paid $56,125 cash to reduce the long-term notes payable.
- Issued 3,700 shares of common stock for $20 cash per share.
- Declared and paid cash dividends of $52,500.
Required:
1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)
In: Accounting
Find the EAR in each of the following cases (Use 365 days a year. Do not...
|
Find the EAR in each of the following cases (Use 365 days a year. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.): |
| Stated Rate (APR) | Number of Times Compounded | Effective Rate (EAR) | |||||||
| 9.4 | % | Quarterly | % | ||||||
| 18.4 | Monthly | ||||||||
| 14.4 | Daily | ||||||||
| 11.4 | Infinite | ||||||||
In: Finance
The Eldorado Corporation's controller prepares adjusting entries only at the end of the reporting year. The...
The Eldorado Corporation's controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries were prepared on December 31, 2021:
Additional information:
1. The company borrowed $684,000 on March 31, 2021. Principal and interest are due on March 31, 2022. This note is the company's only interest-bearing debt.
2. Rent for the year on the company's office space is $48,000. The rent is paid in advance.
3. On October 31, 2021, Eldorado lent money to a customer. The customer signed a note with principal and interest at 9.0% due in one year.
Required:
1. What is the interest rate on the company's note payable?
2. The 2021 rent payment was made at the beginning of which month? (Do not round your intermediate calculation.)
3. How much did Eldorado lend its customer on October 31?
In: Accounting
Bicycling, the world's leading cycling magazine, reviews hundreds of bicycles throughout the year.
Bicycling, the world's leading cycling magazine, reviews hundreds of bicycles throughout the year. Their "Road-Race" category contains reviews of bikes used by riders primarily interested in racing. One of the most important factors in selecting a bike for racing is the weight of the bike. The following data show the weight (pounds) and price ($) for 10 racing bikes reviewed by the magazine.
(a) Use the data to develop an estimated regression equation that could be used to estimate the price for a bike given the weight. (Round your numerical values to the nearest integer).
(b) Computer r2. (Round your answer to three decimal places.)
(c) Predict the price (in dollars) for a bike that weighs 16 pounds. (Round your answer to the nearest dollar.)
In: Math