1) A firm offers terms of 2/15, net 48. What effective annual interest rate does the firm earn when a customer does not take the discount?
2) What is the Current Price and Yield to Maturity of a 8% semi-annual coupon bond if it has a current yield of 9.3% and matures in 10 years?
3) Use the following list of accounts and balances, to prepare a balance sheet, income statement, cash flow statement and statement of retained earnings for Nina's FIRST YEAR in business, Nina has a 60% gross profit margin and 30% tax rate:
Cash $10,000 Depreciation Exp 5,000
Unearned Revenue 7,000 Accts Rec 18,000
Dividends 2,000 Common Stock ?
Prepaid Exp 2,000 Accum. Deprec. ?
Accts Payable 23,000 Office Equipment 30,000
Operating Exp 15,000 Ending Ret. Earning ?
Sales 50,000 COGS ?
Inventory 20,000 Tax Expense
The solution explains some questions relating to discount terms; price and YTM of bond and preparation of financial statements