Calculate the duration of a 2 year bond that pays semiannually and has a 7% yield if the coupon rate is 6%.
1.81
1.86
1.91
1.96
None of the above
In: Finance
The Landers Corporation needs to raise $1.00 million of debt on a 25-year issue. If it places the bonds privately, the interest rate will be 11 percent. Thirty thousand dollars in out-of-pocket costs will be incurred. For a public issue, the interest rate will be 10 percent, and the underwriting spread will be 4 percent. There will be $100,000 in out-of-pocket costs. Assume interest on the debt is paid semiannually, and the debt will be outstanding for the full 25-year period, at which time it will be repaid. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. For each plan, compare the net amount of funds
initially available—inflow—to the present value of future payments
of interest and principal to determine net present value. Assume
the stated discount rate is 14 percent annually. Use 7.00 percent
semiannually throughout the analysis. (Disregard taxes.)
(Assume the $1.00 million needed includes the underwriting
costs. Input your present value of future payments answers as
negative values. Do not round intermediate calculations and round
your answers to 2 decimal places.)
Private Placement:
Net Amount to Landers ____________
Present Value of Future Payments ______________
Net Present Value ________________
Public Issue
Net Amount to Landers ____________
Present Value of Future Payments ______________
Net Present Value ________________
In: Accounting
I am an IT Cybersecurity student in senior year.
Write an executive summry for me.
In: Operations Management
Presented below are a number of balance sheet items for Montoya,
Inc., for the current year, 2017.
| Goodwill | $ 125,000 | Accumulated Depreciation-Equipment | $ 292,000 | |||
| Payroll Taxes Payable | 177,591 | Inventory | 239,800 | |||
| Bonds payable | 300,000 | Rent payable (short-term) | 45,000 | |||
| Discount on bonds payable | 15,000 | Income taxes payable | 98,362 | |||
| Cash | 360,000 | Rent payable (long-term) | 480,000 | |||
| Land | 480,000 | Common stock, $1 par value | 200,000 | |||
| Notes receivable | 445,700 | Preferred stock, $10 par value | 150,000 | |||
| Notes payable (to banks) | 265,000 | Prepaid expenses | 87,920 | |||
| Accounts payable | 490,000 | Equipment | 1,470,000 | |||
| Retained earnings | ? | Debt investments (trading) | 121,000 | |||
| Income taxes receivable | 97,630 | Accumulated Depreciation-Buildings | 270,200 | |||
| Notes payable (long-term) | 1,600,000 | Buildings | 1,640,000 |
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 the order of liquidity. List Property, Plant and
Equipment in order of Land, Building and
Equipment.)
In: Accounting
Companies spend millions, if not billions of dollars on marketing every year. Pick a company that does significant marketing and is a public company. You will need to look up the company’s annual report to find the total amount spent on marketing for the last calendar year (20XX). Once you find the information from the company’s website and annual report, explain the number and what the company reported spending the money on. Do some mathematical comparisons, total revenue as compared to marketing budget, total liability as compared to marketing budget to determine the percentages the company plans to spend just on marketing. ROI (Return on Investment) is also a calculation that can be conducted. Assume that any gain from the year prior to your current year selected is due to increased investment, what would be the percentage ROI that the company achieved by this increased investment. (estimated numbers are okay, as long as you show your work, calculations, and explain your answers.
In: Accounting
A 27 year old female training to be a police officer comes into the clinic complaining of left, anterior, knee pain. She states that while running an obstacle course yesterday she was running on uneven ground and she twisted her knee, causing her to fall. She landed on her left knee and immediately experienced pain. The patient states that she is unable to bear weight and she is unable to move her knee into full extension or flexion. The patient has considerable swelling and she states that when it first happened there was a bump (or deformity) on the outside of her knee. Lastly, the patient states that when she does try to weigh the bear it feels like her knee is going to give out. The patient does not recall hearing a pop. Based on this information, come up with a differential diagnosis, identify possible structures involved, and come up with a treatment plan for this individual.
In: Anatomy and Physiology
Ace Movers is thinking about buying a truck. In the first year it expects to earn $9,000 and then during the second year it will be retro-fitted so it can burn natural gas. After that it will earn $14,000 per year for third, fourth and fifth years. Its cash flows can be summarized as follows:
|
Year |
Cash Flow |
|
0 |
-26,000 |
|
1 |
9,000 |
|
2 |
-6,000 |
|
3 |
14,000 |
|
4 |
14,000 |
|
5 |
14,000 |
Ace Mover's cost of capital (the interest rate on money brought into the firm) is 6.00%. Because the loan will be paid off as soon as possible this rate can be considered the "reinvestment rate."
A) What is the payback period for the truck?
B) What is the discounted payback period for the truck?
C) What is the net present value for the truck?
D) What is the internal rate of return for the truck? Please carry out your answer to two digits to the right of the decimal place.
E) What is the modified internal rate of return for the truck? Please carry out your answer to two digits to the right of the decimal place.
F) Suppose that investors decided that they required a 10:00% cost of capital instead of 6.00%. Would the truck be a good investment? Yes or No.
In: Finance
6.1 Oregon Co.'s employees are eligible for
retirement with benefits at the end of the year in which both age
60 is attained and they have completed 35 years of service. The
benefits provide 15 years reimbursement for health care services of
$20,000 annually, beginning one year from the date of
retirement.
Ralph Young was hired at the beginning of 1977 by Oregon after
turning age 22 and is expected to retire at the end of 2020 (age
60). The discount rate is 4%. The plan is unfunded.
The PV of an ordinary annuity of $1 where n = 15 and i = 4% is
11.11839.
The PV of $1 where n = 2 and i = 4% is 0.92456.
With respect to Ralph, what is the service cost to be included in
Oregon's 2018 postretirement benefit expense, rounded to the
nearest dollar?
Multiple Choice
$3,544.
$20,000.
$5,272.
$6,365.
6.2 Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:
| SITUATION | 1 | 2 | ||
| Taxable income | $ | 40,000 | $ | 80,000 |
| Amounts at year-end: | ||||
| Future deductible amounts | 5,000 | 10,000 | ||
| Future taxable amounts | 0 | 5,000 | ||
| Balances at beginning of year, dr (cr): | ||||
| Deferred tax asset | $ | 1,000 | $ | 4,000 |
| Deferred tax liability | 0 | 1,000 | ||
The enacted tax rate is 40% for both situations.
Required:
For each situation determine the:
| situation | |||
| 1 | 2 | ||
| a | Income tax payable currently | ||
| b | Deferred tax asset - balance at year end | ||
| c | deferred tax asset change dr or cr for the year | ||
| d | deferred tax liability - balance at year end | ||
| e | Deferred tax liability change dr or cr for the year | ||
| f | income tax expense for the year |
In: Accounting
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:
| Beginning inventory | 0 | |
| Units produced | 28,000 | |
| Units sold | 24,000 | |
| Selling price per unit | $ | 466 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 21 |
| Fixed per year | $ | 336,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 296 |
| Direct labor cost per unit | $ | 57 |
| Variable manufacturing overhead cost per unit | $ | 34 |
| Fixed manufacturing overhead per year | $ | 448,000 |
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
In: Accounting
On January 1 of this year, Victor Corporation sold bonds with a face value of $1,560,000 and a coupon rate of 10 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Required:
1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Prepare the journal entry to record the
interest payment on June 30 of this year. (If no entry is
required for a transaction/event, select "No journal entry
required" in the first account field.)
3. What bonds payable amount will Victor report on
its June 30 balance sheet?
In: Accounting