Trade Credit Rates - A firm currently offers terms of sale of 3/20, net 40. What effect will the following actions have on the implicit interest rate charged to customers that pass up the cash discount? State whether the implicit interest rate will increase or decrease. a) the terms are changed to 4/20, net 40 b) the terms
Why is it argued that the federal income tax exemption of interest on state-local debt is an escape from progressivity for the rich? Please explain the arguements for and against this critisism.
Is the federal income tax exemption of interest on state-local debt an inefficient subsidy in terms of "transfer efficiency"? What are the arguements for and against it being an ineffiecient subsidy in terms of "transfer efficiency"? thank you.
I read that some argue that the federal income tax exemption of interest on state-local debt is that it masks interest rate costs - to all sectors that borrow - of increased volume of state-local borrowing? Please explain the arguements for and an against this theory - I dont understand. thanks.
Calculate the market price of a share of the company's stock. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after tax interest cost on total debt of 5 percent, what is the firm's ROA? If retained earnings were $280 million prior to the transaction, what was the dollar amount of retained earnings after the transfer? Determine the increase or decrease in cash for Rinky Supply Company for last year, given the following information. If the variable cost per bag is $2.00, what price must the division charge in order to break even? What is next year's additional external funding requirement, i.e., what is your firm's AFN?
4-11. You are given the following information: Stockholders' equity = $1,250; price/earnings ratio = 5; shares outstanding = 25; market/book ratio = 1.5. Calculate the market price of a share of the company's stock. a) $ 33.33 b) $ 75.00 c) $ 10.00 d)$166.67 e) $133.32 4-12. A firm has a profit margin of 15 perce
What advantages do compensating balances have for banks? Are the advantages to banks necessarily disadvantages to corporations?
1) A firm's profit margin is 10% and its asset turnover ratio is .6. It has no debt, has net income of $10 per share, and pays dividends of $4 per share. What is the sustainable growth rate? 2) A bank loan has a quoted annual rate of 6%. However, the borrower must maintain a balance of 25% of the amount of the loan, and the
BE2-19 Porter Company signed a lease for an office building for a period of 10 years. Under the lease agreement, a security deposit of $10,000 is made. The deposit will be returned at the expiration of the lease with interest compounded at 5% per year. What amount will Porter receive at the time the lease expires?
4. What are the underlying concepts behind time value of money?
3) Would you rather have a hundred dollars today or a hundred dollars a year from now? Why?
Instructions Using whatever data you believe appropriate, prepare a multiple-step income statement for the Pratt Department Store for the year ended December 31, 2000. Multiple-Step Income Statement Below is a partial listing of the adjusted account balances of the Pratt Department Store at year-end on December 31, 2
Gitler Department Store: Instructions: (a) (1) Prepare a multiple-step income statement for the year: (a) (2) Prepare a retained earnings statement for the year: (a) (3) Prepare a balance sheet for December 31, 2002. (b) Journalize the adjusting entries. (c) Journalize the closing entries that are necessary.
Problem P5-3A Gitler Department Store is located near the Village Shopping Mall. At the end of the company's fiscal year on December 31, 2002, the following accounts appeared in two of its trial balances: Account title Unadjusted Adjusted Account title Unadjusted Adjusted Accounts pa
You win the Zillion Dollar Lottery. Starting in 1 Year, you will receive$500,000 annually for 20 years. The states lottery commission has just enough in an account of 15% compounded annually to pay this annuity. How much money is in it today?] A treasury bill has a maturity value of $10,000 5 years from now. If I receive 5% i
The theory of interest rate parity states that the annual percentage differential in the forward market for a currency quated in terms of another currency is equal to the approximate difference in _______ prevailing in the two countries a. interest rates b. trade deficit rates c. GNP growth rates
1. Journalize the entry to record the amount of the cash proceeds form the sale of bonds. 2. Journalize the entries to record the following a) The first semiannual interest payment on December 31, 2002, including the amortization of the bond premium using the straight line method. b) The interest payment on June 30, 2003, and the amortization of the bond premium using the straight line method. 3) Determine the total interest expense for 2002.
Morseby Inc. produces and sells voltage regulators. On July 1,2002, Morseby Inc. issued $8,000,000 of ten year , 11% bonds at an effective interest rate of 10%. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year for the company is the calender year. 1. Journalize the entry
A bank offers a corporate client a choice between borrowing cash at 11% per annum and borrowing gold at 2% per annum. (If gold is borrowed, interest must be repaid in gold. Thus, 100 ounces borrowed today would require 102 ounces to be repaid in one years time.) The risk-free interest rate is 9.25% per annum and storage costs ar
What would be the swap fixed rate (SFR) for a plain vanilla, two-year interest rate swap, payments every six months beginning 07/01/0X, with the following assumptions/data: Swap initiation - January 1, 200X FRA1,0=2.221%; FRA1,1=2.258%; FRA1,2=2.322%; FRA1,3=2.388%;FRA1,4=2.520%;FRA1,5=2.632% (Read the notation, FRA1,0 as "si
Which of the following events is a financing activity to a company? A) Selling equipment B) Paying interest on a loan C) Paying off the principal portion of a loan D) Purchasing equipment Please select one of the answers stated above.
Explain simple interest with derivation of relevant formulae and a sample calculation.
Bill borrows $1000 at 5% compounded annually. He is able to establish a sinking fund to pay off the debt and interest in 7 years. The sinking fund will earn 8% compounded quarterly. What should be the size of the quarterly payments into the fund?
Mr. & Mrs. Corey are newlyweds and want to purchase a home, but they need a down payment of $10,000. If they want to buy their home in 2 years, how much should they save each month in their savings account that pays 3% per annum compounded monthly?
An employee gets paid at the end of each month and $60 is withheld from her paycheck for a retirement fund. The fund pays 1% per month (equivalent to 12% annually compounded monthly). What amount will be in the fund at the end of 30 months?
You place an order for 1,000 units of inventory at a price of $350 per unit. The supplier offers terms of 2/10, net 30. Answer the following questions about payment. a. If you take the full period to pay, how much should you remit? b. How soon must you pay to get the discount? c. What will be the amount of the di
Suppose that Peter invested $24 at a 5% interest rate. What would be the balance in his account after 5 years? 50 years?
What is the equation to compute loan payment for a multimonth car loan at a fixed interest?
Ying Import has several bond issuances outstanding, each making semiannual interest payments. The bonds are listed in table attached. If the corporate tax rate is 34%, what is the aftertax cost of Ying's debt? Coupon Price Face Bond Rate Quote Maturity Value 1 8.00% $106.38 5 years 10,000,000 2 7.50% $98.00 8 years 45,