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write my assignment 4650

Ted just won the lottery, and he must choose among three award options. He can elect to receive a lump sum today of $61m, to receive 10 payments of $9.5 million per year at the end of each year (the first payment occurs one year from now), or to receive 30 payments of $5.5 million per year at the end of each year (the first payment occurs one year from now).

i. If he thinks he can earn 7% annually, which should he choose?

ii. If he thinks he can earn 9% annually, which is the best choice?

iii. Explain how interest rates influence the award options.

Option 1 Lump sum 61,000,000 Option 2 10 payments 9,500,000 Option 3 30 payments 5,500,000 i. If he thinks he can earn 7% annually, which should he choose?Option 1 Present Value $61,000,000.00…

 

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write my assignment 13375

Neveready Flashlights Inc. needs $324,000 to take a cash discount of 2/15, net 73. A banker will loan the money for 58 days at an interest cost of $11,100.  

a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

b. How much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 73 days instead of 15 days? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

c. Should the firm borrow the money to take the discount?

NoYes  

d. If the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $324,000?

e-1. What would be the effective interest rate in part d if the interest charge for 58 days were $16,700? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

e-2. Should the firm borrow with the 20 percent compensating balance requirement? (The firm has no funds to count against the compensating balance requirement.)

YesNo

 

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write my assignment 9678

  • Attachment 1
  • Attachment 2

Problem 14-2 (Part Level Submission) Pearl Co. is building a new hockey arena at a cost of $2,420,000. It received a downpayment of$540,000 from local businesses to support the project, and now needs to borrow $1,880,000 to completethe project. It therefore decides to issue $1,880,000 of 11%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 10%. V (3)Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2016. (Round present valuefactor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal placese.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do notindent manually.) Date Account Titles and Explanation Debit CreditPremium on Bonds Payable – 115518 Bonds Payable – 1880000

 

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write my assignment 8937

Suppose that the consensus forecast of security analysts of your favorite company is that earnings NEXT YEAR will be E1 = $5 per share.  Suppose that the company tends to plow back 50% of its earnings and pay the rest as dividends.   If the CFO estimates that the company’s growth will be 8% from now onwards, answer the following questions:

If your estimate of the company’s required rate of return on its stock is 10%, what is the equilibrium price of the stock?

Suppose you observe that the stock is selling for $50 per share and that is the best estimate of its equilibrium price.  What would you conclude about either?  (1) your estimate of the stock’s required rate of return or (2) the CFO’s estimate of the company future growth rate

Suppose your 10% estimate of the stock’s required rate of return is shared by the rest of the market.  What does the market price of $50/share imply about the market’s estimate of the company’s growth rate?

 

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