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Journal Entries for Bonds Purchased at a Premium; Retired Earlier

ABC received $1,075,736 including accrued interest when they issued bonds on April 1, 2011. The bonds had a face value of $1,000,000 and 9% interest payable annually on Jan 2, and maturing Jan 2, 2021. ABC retired $300,000 of the bonds at 102 plus accrued interest on July 1, 2013. What are the journal entries for the origin

Grider Industries: Amortization of discount or premium on bonds

Grider Industries, Inc. issued $8,000,000 of 8% debentures on May 1, 2012 and received cash totaling $7,098,102. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2020. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold

Intermediate Financial Accounting II: Understanding Debt, Bonds, SPE

1 - You are planning to invest $10,000 in ABC's bonds. Right now the stated rate of the bonds is seven percent, and the market rate is eight percent. The Federal Reserve System (FRS) is considering lowering the interest rate by two percent to help stimulate the economy sometime next year, but the final decision has not been made

AFN Equation and Assumptions

1. The following equation is sometimes used to forecast financial requirements: AFN = (A₀ */S₀) (ΔS) - (L₀ */S₀) (ΔS) - MS₁ (1-POR) What key assumption do we make when using this equation? Under what conditions might this assumption not hold true? 2. What is meant by the term "self-supporting growth rate?" H

Average Level of Inventory

I need help answering this question: 1. Vanity Press, Inc., has annual credit sales of $1.6 million and a gross profit margin of 35 percent. a. If the firm wishes to maintain an average collection period of 50 days, what level of accounts receivable should it carry? (Assume a 365-day year.) b. The inventory turnover for t


Students will analyze and synthesize the financial reports of an organization of their choice and present their findings in a PowerPoint presentation (with completed Notes section providing details of analysis and synthesis of information to presented points. You must also provide a separate document of exhibits of financial rep

Calculate the required capital budgeting parameters.

1. What is the payback for a project that has anticipated cash inflows of $10,000 for 5 years and a cost of $22,000? 2. Good old XYZorp (they're back!) is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the cost accountants out of their cages, it was determined that pr

Platinum & Steel Products Return on Equity

At the beginning of the year, the net assets of Platinum & Steel Products were $334,500. The only transactions affecting stockholders' equity during the year were net income of $48,000 and dividends of $14,500. Calculate Platinum & Steel Products's return on equity (ROE) for the year. (Round your answer to 1 decimal place

Foreign Exchange Market and Financial Management

The market for foreign exchange can be viewed as a two-tier market. One tier is the wholesale or interbank market and the other tier is the retail or client market. International banks provide the core of the FX market. They stand willing to buy or sell foreign currency for their own account. These international banks serve thei

Calculating Cash Flows

Titan Football Manufacturing had he following operating results for 2014: sales=23,730, cost of goods sold= 16,780, depreciation expense=2,840, interet expense=414, dividends paid =616, At the begining of the year, net fixed asset were 16,560, current assets were 2,940, and current liabilities were 2,592. At the end of the year

Enterprise value of Turnbull Corporation

Multiple Analysis: Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.

Cost of Equity Capital for Gangland Water Guns Inc.

The cost of equity: Gangland Water Guns Inc. is expected to pay a dividend of $2.10 one year from today. If the firm's growth in dividends is expected to remain at a flat 3% forever, then what is the cost of equity capital for Gangland if the price of its common shares is currently $17.50?

Rate of return for owning Serox in the most recent year

Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

Total money to be raised

I need help with assignment. Please see the attachment. It is a question about determining the amount of money that needs to be raised.

Investments - Securities Markets and Transactions

Andre Khan is a stockbroker who lives with his wife, Sasha, and their five children in Milwaukee, Wisconsin. Andre firmly believes that the only way to make money in the market is to follow an aggressive investment posture - for example, to use margin trading. In fact, Andre himself has built a substantial margin account over

Fast Food Restaurant with Above Average Return on Assets

Fast Food Restaurants Assume that fast-food restaurants generally provide an ROI of 16%, but that such a restaurant near a college campus has an ROI of 18% because its relatively large volume of business generates an above-average turnover (sales/assets). The replacement value of the restaurant's plant and equipment is $206,0

Calculating future values and rates of return

1. If you deposited $250 in your savings account today, and the bank pays 4 percent interest per year, how much would you have in your savings account after 9 years? - Recalculate the account balance using a 6 percent interest rate and a 7 percent interest rate. 2. A $450 deposit earns 6 percent interest in the first year,

Audit Planning CASE STUDY: Little Diggers Ltd

CASE STUDY: Little Diggers Ltd Little Diggers Ltd is a large manufacturer of construction machinery based in the UK. They have recently appointed yourfirm 'Jones Cleese and Chapman' (JCC) to conduct the yearend audit for the 12 months to 30th September 2013. The engagement was accepted and as audit senior you have been asked

Inputs Diagnosis: Time Warp 2

Using the Nadler-Tushman Congruence Model, conduct an analysis of Whole Foods Market's inputs and how they align with the strategy. For the analysis, start with strategy. Review Whole Foods Market's strategy and then determine which one of Porter's competitive strategies fits with this strategy. Then review the company's inp

Expected return on Barbara's investment

Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find Probability

Finance Questions

14-1 Puckett Products is planning for a $5 million in capital expenditures next year. Puckett's target capital structure consists of 60% debt and 40% equity. If net income next year is $3 million and Puckett follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio? 14-4

MCQ- Depreciable base, real option

Need help with assignment. A stock is currently selling for $25. A 6-month call option on the stock has a strike price of $30 and sells for $0.50. Calculate the exercise value of the option? $0.00 $4.50 $5.00 $24.50 none of the above Which of the following is not a real option? The option to switch the type of ve

Debt, Equity, WACC

An all equity firm has a required return on its equity of 15%, has 10 million shares outstanding, and pays no taxes. The shares are currently trading at $6.00 each. The firm is planning to borrow $9 million at 5% interest rate and use the borrowed funds to buyback a portion of its equity. Calculate the new value of the firm a

Call option value

Which of the following is correct? a. NPV will be higher if sunk costs are included in a project's cash flows b. A good example of a sunk cost is a situation where a company builds a restaurant and that results in lower sales by another of its restaurants. c. A good example of a sunk cost is a situation where a company build

Business / Finance / Weighted Average Cost of Capital (WACC)

Genaro needs to capture a return of 40 percent for his one-year investment in a property. He believes that he can sell the property at the end of the year for $150,000 and that the property will provide him with rental income of $25,000. What is the maximum amount that Genaro should be willing to pay for the property? Please

Define the following terms

1. Define the following Terms: a. Proprietorship; partnership; corporation b. Limited partnership; limited liability partnership; Professional Corporation c. Stockholder wealth maximization d. Money Market; capital market; primary market; secondary market e. private Markets; public markets; derivatives f. Investment Banker