1A)) A company wants to have $20,000 at the end of a ten-year period by investing a single sum now. How much needs to be invested in order to have the desired sum in ten years, if the money can be invested at 12%? (Ignore income taxes.)
Multiple Choice
$7,720 A
$3,539.82 B
$3,254.68 C
$6,440 D
1B)) The management of L Corporation is considering a project that would require an investment of $285,000 and would last for 6 years. The annual net operating income from the project would be $115,000, which includes depreciation of $16,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.):
Multiple Choice
2.2 years A
2.3 years B
1.9 years C
2.5 years D
1C)) J Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):
| Investment required in equipment | $ | 39,000 | |
| Annual cash inflows | $ | 9,600 | |
| Salvage value of equipment | $ | 0 | |
| Life of the investment | 15 | years | |
| Required rate of return | 10 | % | |
The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
The simple rate of return for the investment (rounded to the nearest tenth of a percent) is:
Multiple Choice
26.1% A
17.9% B
12.6% C
31.2% D
In: Accounting
What is the present value of a cash flow stream of $1,000 per year annually for 15 years that then grows at 2.0 percent per year forever when the discount rate is 8 percent? (Round intermediate calculations and final answer to 2 decimal places.)
In: Finance
Vittoria Ltd requires a Statement of Cash Flows to be prepared for the year ended
31 March 2018, the following information has been collected for this purpose.
|
Vittoria Ltd Balance Sheets as at 31 March |
||
|
2017 |
2018 |
|
|
Cash |
$176 000 |
$239 000 |
|
Accounts receivable |
220 000 |
280 000 |
|
Allowance for doubtful debts |
(30 000) |
(40 000) |
|
Inventory |
90 000 |
100 000 |
|
Plant and equipment |
900 000 |
1 074 000 |
|
Accumulated depreciation |
(80 000) |
(100 000) |
|
Total assets |
$1 276 000 |
$1 553 000 |
|
Accounts payable |
80 000 |
70 000 |
|
Interest payable |
1 000 |
2 000 |
|
Income tax payable |
76 000 |
88 000 |
|
Long term loans |
109 000 |
148 000 |
|
Share capital |
400 000 |
500 000 |
|
Asset revaluation surplus |
- |
30 000 |
|
Retained earnings |
610 000 |
715 000 |
|
Total equity and liabilities |
$1 276 000 |
$1 553 000 |
|
Vittoria Ltd SCI for the year ended 31 March 2018: |
|
|
Sales |
$885 000 |
|
Less expenses: |
|
|
COGS |
240 000 |
|
Depreciation expense |
90 000 |
|
Interest expense |
6 000 |
|
Doubtful debts expense |
40 000 |
|
Salaries and wages expense |
200 000 |
|
Income tax expense |
84 000 |
|
Other expenses |
120 000 |
|
Profit after tax |
105 000 |
|
OCI: Revaluation gain |
30 000 |
|
TCI |
$135 000 |
Question 2 continued:
Additional information:
Vittoria Ltd classifies interest expense and dividends paid as cash outflows from financing activities.
Plant and equipment, with a fair value of $100 000, has been acquired by the issue of
$100 000 worth of fully paid Vittoria Ltd shares to the sellers of the plant and equipment.
During the year, equipment that originally cost $100 000 was sold for $30 000 cash.
Plant and equipment was revalued upwards by $30 000.
A long-term loan of $30 000 was specifically organised for the purchase of plant and equipment costing $30 000.
Required:
(i) Prepare the general ledger accounts as required in the answer booklet.
(ii) Prepare a statement of cash flows for Vittoria Ltd, for the year ended 31 March 2018, in accordance with NZ IAS 7 Statement of Cash Flows. Vittoria Ltd uses the indirectmethod for the cash flows from operating activities (CFOA) section.
(iii) Prepare a statement of cash flows for Vittoria Ltd, for the year ended 31 March 2018, in accordance with NZ IAS 7 Statement of Cash Flows. Vittoria Ltd uses the directmethod for the cash flows from operating activities (CFOA) section. Complete the necessary reconciliation, as required by NZ FRS-44, to be included in the notes.
(iv) Explain, by completing the table in the answer booklet, how your answers to (ii) and (iii) above would changeifVittoria Ltd classified interest expense paid as a cash outflow from operating activities.
(v) Vittoria Ltd has provided you with 15 types of cash inflows and cash outflows in the answer booklet and requires you to determine where they should be included in the Statement of Cash Flows in accordance with NZ IAS 7 Statement of Cash Flows. AssumeVittoria Ltd uses the direct method for CFOA. Hint: Remember certain cash flows have a choice of classification; for these particular cash flows highlight the two choices available.
CFOA = cash flows from operating activities, CFIA = cash flows from investing activities and CFFA = cash flows from financing activities.
In: Accounting
$1 is paid at the end of every year for 50 years. Assume an interest rate of 5% unless otherwise noted.
3. Calculate the value of the annuity at t = 25 using the following methods:
1. Sum up the value of each individual payment
2. Use the annuity formulas
3. Use the excel formulas
4. Accumulate the value from part 1.1
5. Present value the value from part 2.1
For 4, part 1.1 gives total present value of $18.2559. And for 5, part 2.1 gives the total accumulated value of 209.3480 at t = 50.
Do this in excels please. And please show the equation that you using with the instructions given.
In: Finance
Assume that I can borrow money at a rate of 10% per year, but that I only earn 2% per year on money I loan. A friend has recently offered me an investment opportunity; make a $5,000 investment today and receive a guaranteed $5,400 in one year. I currently have $10,000 in the bank, but I plan on consuming $9,000 – meaning that I only have $1,000 that I could invest. Can/should make the investment? How much consumption would I need to be willing to forego to make the investment? (Another way to think about this is what is the maximum amount that I would be willing to borrow to take the investment?)
In: Finance
You are the recipient of a gift that will pay you $25,000 one year from now and every year thereafter for the following 24 years. The payments will increase in value by 2.5 percent each year. If the appropriate discount rate is 8.5 percent, what is the present value of this gift? STEPS FOR BAII PLUS CALCULATOR PLEASE!
In: Finance
(1) The standard costs of wooden ducks on wheels, for the CURRENT year, for 5 mm board and for cutting are as follows:-
5 mm board: 0.2 sq. metre at £4.50 per sq. metre.
Cutters: 1.5 minutes at £7.20 per hour.
In the most recent period, 120 wooden ducks on wheels were produced.
25 sq. metres of 5 mm board were requisitioned from stores at a total cost of £110.
2.75 hours were recorded for cutters at a total cost of £22.
Required
(a) Calculate the material price variance and material usage variance for 5 mm board
(ii) Calculate the wage rate variance and labour efficiency variance for cutters
Suggest possible reasons for the variances calculated.
(2) Given standard cost per unit:
Direct materials (4 kg. @ 75p per kg)
Direct labour (2 hrs @ £1.60 per hr)
Actual details are:
|
|
£ |
|
|
Output produced (units) |
38,000 |
|
|
Direct material purchased |
180,000 kg |
126,000 |
|
issued to production |
154,000 kg |
|
|
Direct labour |
78,000 hrs |
136,500 |
Calculate: Material and labour variances.
In: Accounting
An owner of the Atrium Tower is currently negotiating a 5 year lease with ACME Corp. for 20,000 rentable SF. ACME would like a base rent of $25/SF with step-ups of $1/year beginning one year from now. a) What is the present value of cash flows to Atrium (assume A 10% discount rate) b) The owner of ATRIUM believes that the Base rent of $25/SF in (a) is too low and wants to raise that amount to $29 with the same step-ups. If so, Atrium would provide ACME with a $50,000 moving allowance and $150,000 in tenant improvements. What is the PV of this alternative and the effective rent. c) ACME informs ATRIUM it will pay $23/SF but must buyout one year left on its existing lease ($15/SF on 20,000/SF); no moving allowance or tenant Improvements. What is the PV of this alternative and the effective rent.
In: Finance
Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly.
1) Assume that a $1,000,000 par value, semiannual coupon US Treasury note with four years to maturity has a coupon rate of 4%. The yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
a) $874,669.10
b) $551,041.53
c) $743,468.74
d) $1,049,602.92
Based on your calculations and understanding of semiannual coupon bonds, complete the following statement:
2) When valuing a semiannual coupon bond, the time period variable(N) used to calculate the price of a bond reflects the number of (4-month, 8-month, 6-month, 12-month) periods remaining in the bond’s life.
In: Finance
ASSIGNMENT:
Suggested topics for the assignment include:
In: Computer Science