Jupiter Aviation Inc. has 2 different bonds outstanding. Bond A has a face value of $35,000 and a maturity of 10 years. It makes no coupon payments over the life of the bond. Bond B also has a face value of $35,000 with 10 years to maturity. It makes no payments for the first 5 years, then pays $1,000 every 6 months over the subsequent 2 years, and finally pays $2,000 every 6 months over the last 3 years. If the required return on both of these bonds is 5% compounded semi-annually, what is the current price of bond A? Of bond B?

Japanese manufacturer (the seller) of optical zoom attachments has signed a contract with a Mexican company (the importer) to supply 10,000 attachments for a contract price of USD 1.2 million, Following multiple discussions, the Japanese company has sought a 10 percent advance payment to help the company secure funds for purchasing raw materials and to ensure the commitment of the buyer. Given this is the first contract between these two companies, the Mexican company has asked for a 5 percent performance guarantee to ensure appropriate delivery on their agreement. Explain how a buyer can use the advance payment and performance guarantee to their benefit.

A company is analyzing a pressing machine to acquire. The purchasing price of this machine is $300,000. This machine will be used towards pressing 1,000 products every 6 months, which each will be sold for $50. Its operating and maintenance cost will be $7000 in the first semi-annual and it increases by $500 every six months (semi-annual) after that till the end of its useful life, which year 7. The salvage value at the end of year 7 will be $20,000. If the interest rate is 7% per year, compounded quarterly, do you recommend the company to purchase this pressing machine? Provide your detailed calculations.

Filer Manufacturing has 7,034,720 shares of common stock outstanding. The current share price is $65.32, and the book value per share is $3.05. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $79,113,079, has a 0.07 coupon, matures in 12 years and sells for 81 percent of par. The second issue has a face value of $62,515,482, has a 0.08 coupon, matures in 9 years, and sells for 84 percent of par. What is Filer's weight of equity on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)

• The first tab should contain the simulation model.

• The second tab should contain the algebra of the optimization model.

• The third tab should contain the optimization model and its solution using Excel Solver.

Q1. Construct a spreadsheet simulation model for calculating profits for a company given that the demand for their new product is normally distributed with a mean of 6 and a standard deviation of 1. The selling price is $30/unit. The fixed cost is $50. The per-unit variable cost is uniformly distributed between $10 and $20. Assume that all that is produced is sold and that production and demand are always equal. Execute the simulation for 50 trials.

On June 30, 2015, Pacman Ltd. purchased $1,000,000 of 10 year 4% bonds and classified them as FVTPL. The market rate at time of purchase was 5%. Interest is paid semi-annually on June 30 and December 31. Pacman follows IFRS 9. On December 31,2015, the market rate was 4.6%. On June 30, 2016, Pacman sold all the bonds for $940,000 plus accrued interest.

a. Calculate the purchase price of the bonds.

b. Prepare a bond amortization table for the first two interest periods

c. Prepare all of the journal entries related to the investment in bonds.

Problem 1

Company:                        XYZ Company

Date of bonds:                January 1, 2019

Term:                               4 years

Face (Par) Value:            $1,000

Stated interest rate:         10%

Effective interest rate:    12%

Interest payment dates on January 1 and July 1

1. Compute the market price of the bonds and journalize the issuance of the bonds.

2. Prepare a schedule to amortize the premium or discount using the effective interest method of amortization for the first year and journalize the entries to record the interest payment on July 1, 2019 and January 1 2020.

3. Interest expense for the year ended December 31, 2019 is $______________.

On January 2, Lincoln Motors, Inc. issued 1,000, $1,000 bonds to finance a new showroom. The bonds are 5-year, 6% bonds that pay interest on December 31 each year. When issued, investors required 7% interest and the bonds are due December 31, Year 5.

Required:

1.      Compute the selling price of the bonds.  3 PUNTOS

2.      Prepare the entry to record the sale of the bonds. 3 PUNTOS

3.      Prepare the amortization table for the bonds. 5 PUNTOS

4.      Prepare the journal entries for the first annual interest payment and the final repayment of the bonds. 5 PUNTOS

Problem 1

Company:                        XYZ Company

Date of bonds:                January 1, 2019

Term:                               4 years

Face (Par) Value:            $1,000

Stated interest rate:         10%

Effective interest rate:    12%

Interest payment dates on January 1 and July 1

1. Compute the market price of the bonds and journalize the issuance of the bonds.

2. Prepare a schedule to amortize the premium or discount using the effective interest method of amortization for the first year and journalize the entries to record the interest payment on July 1, 2019 and January 1 2020.

3. Interest expense for the year ended December 31, 2019 is $______________.

1. Barney and Betty are purchasing their first house. They expect to put down $58,000 (gifts from their wedding, some savings, inheritance from grandparents, and an accident settlement) which will be the 25% down payment their mortgage broker says the bank needs to finance the purchase. They are going to take out a 4.45%, 20-year fixed mortgage on the balance.
   1. How much is the purchase price of the house?

2. How much will they be financing on the mortgage?

3. What will their monthly payment amount be?

4. After 1-year, how much interest will they have paid on the loan?

5. After 1-year, how much principal will they have paid on the loan?