Design Arts, Inc. is a young computer game design company that has been in business for two years. The company has been working on a computer game that is scheduled for release in six months. However, it has exhausted all its financial resources and needs one last loan of $100,000 to help it meet its deadline. The company has not had any revenues up to this point but knows that once the game hits the market, it will be extremely profitable. Would you make a loan to this company? Why or Why not?
Rome Company issued seven-year bonds on January 1. Face value of the bonds is $80,000. The stated interest rate on the bonds is 7%. The market rate of interest at the time of issuance was 10%. The bonds pay interest semiannually. Calculate the issuance price of the bonds.
Show step-by-step solution, all the calculations with explanation. Also, could you explain to me why we must assume the face value of a bond? If different people assume different values, will the final number be different for different people?© BrainMass Inc. brainmass.com October 25, 2018, 3:59 am ad1c9bdddf
Yes, I would make a loan to the company.
Design Arts is in the business of designing computer games and currently have no revenues. With the help of a loan of $100,000 the company will be able to launch its product and is expected to be extremely profitable in future. The computer gaming industry is highly profitable and has a ...
Detailed answer attached.
Business Management: Evaluating Performance
Having previously identified the location of its Greenfield investment, Acme, a multi-billion public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your job is to explain to this committee some of the financial aspects of this acquisition.
Deliverable: At the next steering committee meeting, you will provide a detailed presentation of the characteristics of the various external financing alternatives, including the advantages and disadvantages of each. Your report should conclude with a recommendation of which alternative (or combination of alternatives) should be used to finance the overseas investment.View Full Posting Details