Assume that you are considering the purchase of a 20-year, bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 9.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? (With excel formulas)
In: Finance
The current price of MB Industries stock is $20 per share. In the next year the stock price will either go up to $24 per share or go down to $16 per share. MB pays no dividends. The one year risk-free rate is 5 percent and will remain constant. Using the one-step binomial pricing model, what is the price of a one-year CALL option on MB stock with a strike price of $20 (out to two decimal places)?
In: Finance
During the year, an enterprise fund had a number of transactions that affected the various net positions of the fund. You should analyze the transactions in the grid below, and the record the adjusting entries. The first transaction is analyzed for you as an example.
1. Net income for the year was $250,000.
2. Depreciation expenses for the year totaled $93,000.
3. Equipment with a carrying amount of $324,000 was sold for $398,000.
4. Principal payments of $96,000 were made on debt incurred to acquire plant and equipment.
5. New equipment was purchased for $100,000 in cash and a note payable of $373,000.
6. Bonds in the amount of $5,000,000 were issued to finance construction. At the end of the year, the project was incomplete, with costs incurred so far of $1,900,000.
Clearly show how you computed the amount of the adjustment.
Journal entry to adjust unrestricted net assets:
Journal entry to adjust net investment in capital assets:
Journal entry to adjust restricted net assets.
In: Accounting
In: Accounting
Presented below are a number of balance sheet items for Buffalo,
Inc. for the current year, 2020.
|
Goodwill |
$ 129,170 |
Accumulated Depreciation-Equipment |
$ 292,100 | |||
|---|---|---|---|---|---|---|
|
Payroll Taxes Payable |
181,761 |
Inventory |
243,970 | |||
|
Bonds payable |
304,170 |
Rent payable (short-term) |
49,170 | |||
|
Discount on bonds payable |
15,100 |
Income taxes payable |
102,532 | |||
|
Cash |
364,170 |
Rent payable (long-term) |
484,170 | |||
|
Land |
484,170 |
Common stock, $1 par value |
204,170 | |||
|
Notes receivable |
449,870 |
Preferred stock, $10 par value |
154,170 | |||
|
Notes payable (to banks) |
269,170 |
Prepaid expenses |
92,090 | |||
|
Accounts payable |
494,170 |
Equipment |
1,474,170 | |||
|
Retained earnings |
? |
Debt investments (trading) |
125,170 | |||
|
Income taxes receivable |
101,800 |
Accumulated Depreciation-Buildings |
270,300 | |||
|
Notes payable (long-term) |
1,604,170 |
Buildings |
1,644,170 |
Prepare a classified balance sheet in good form. Common stock
authorized was 400,000 shares, and preferred stock authorized was
20,000 shares. Assume that notes receivable and notes payable are
short-term, unless stated otherwise. Cost and fair value of debt
investments (trading) are the same. (List Current
Assets in order of liquidity. List Property, Plant and Equipment in
order of Land, Building and Equipment.)
|
BUFFALO, INC. |
||||||
|---|---|---|---|---|---|---|
|
Assets |
||||||
|
select an opening name for subsection one Capital StockCurrent AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity |
||||||
|
enter a balance sheet item |
$enter a dollar amount |
|||||
|
enter a balance sheet item |
||||||
In: Accounting
. A property is forecasted to generate annual
rental income of $80,000 in year 1. Vacancy rate is expected to be
5%, there is also a 5% management fee. Other operating expenses
will total $17,500 for year 1. Rent is expected to grow at 5% in
years 2 and 3, and other operating expenses are expected to grow at
6% in years 2 and 3. You believe that you can sell the property at
the end of year 3 for $900,000. Using a required rate of return of
10%, calculate a fair value of the property today (at t=0). (Show
all work.)
a. Assuming a purchase price for the property
of $800,000, and an 80 LTV, 5.75%, fixed-rate 25-year loan,
calculate the debt service coverage ratio based only on the year 1
NOI.
In: Finance
Derry Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Derry Manufacturing's operations:
|
Current Assets as of December 31 (prior year): |
|
|
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . |
$4,500 |
|
Accounts receivable, net. . . . . . . . . . . . . . . |
$46,000 |
|
Inventory. . . . . . . . . . . . . . . . . . . . . . . . |
$15,300 |
|
Property, plant, and equipment, net. . . . . . . . . . . . |
$124,000 |
|
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . |
$42,400 |
|
Capital stock. . . . . . . . . . . . . . . . . . . . . . . . . . . |
$125,500 |
|
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . |
$22,500 |
|
More Info: a. Actual sales in December were $70,000. Selling price per unit is projected to remain stable at $10 per unit throuout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: January. . . . . . . . . $80,000 February. . . . . . . . $92,000 March. . . . . . . . . . $99,000 April. . . . . . . . . . . . $97,000 May. . . . . . . . . . . . $85,000 b. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale. c. Derry Manufactruing has a policy that states that each month's ending inventory of finished goods should be 25% of the following month's sales (in units). d. Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two pounds of direct material is needed per unit at $2.00 per pound. Ending inventory of direct materials should be 10% of next month's production needs. e. Most of the labor at the manufacturing facility is indirect, but there is some direct labor incurred. The direct labor hours per unit is 0.01. The direct labor rate per hour is $12 per hour. All direct labor is paid for in the month in which the work is performed. The direct labor cost for each of the upcoming three months is as follows: January. . . . . . . . . $996 February. . . . . . . . $1,125 March. . . . . . . . . . $1,182
|
In: Accounting
Summarized data for 2016 (the first year of operations) for Trenton Products, Inc., are as follows: Sales (200,000 units) $16,000,000 Production costs (210,000 units) Direct material 4,200,000 Direct labor 3,360,000 Manufacturing overhead: Variable 2,520,000 Fixed 2,100,000 Operating expenses: Variable 1,120,000 Fixed 1,280,000
a. Prepare an income statement based on full absorption costing. Only use a negative sign with your answer for net income (loss), if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when applicable.
In: Accounting
Suppose a ten-year,
$ 1000 bond with an
8.5 % coupon rate and semiannual coupons is trading for
$ 1034.55
.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? ___________
b. If the bond's yield to maturity changes to
9.9 %
APR, what will be the bond's price?
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
The bond's yield to maturity is? ______ Round to two decimal places
What is the new price of the bond? _____________
In: Finance
You are saving for a new house and you put $20,000 per year in an account paying 8%. The first payment is made today. How much will you have at the end of 3 years?
|
A. $51,541.19 |
||
|
B. $55,665.29 |
||
|
C. $64,928.00 |
||
|
D. $70,122.24 |
||
|
E. $75,732.19 |
In: Finance