Compare the overviews from the following two articles to analyse whether inflation or deflation is more likely in the next two years. 1. Krugman, P. (May 3, 2009) Falling Wage Syndrome. New York Times. Retrieved May, 2009 from: http://www.nytimes.com/2009/05/04/opinion/04krugman.html?_r=1 2. Meltzer, A.. (May 3, 2009) Inf
National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January 1, 2011. The bonds mature in 2014 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. Prepare an amortization schedule that determines interes
E14-3 (Entries for Bond Transactions) Presented below are two independent situations. 1. On January 1, 2012, Divac Company issued $300,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2012, Verbitsky Company issued $200,000 of 12%, 10-year bonds dated Ja
1. An investment banker enters into a best efforts arrangement to try and sell 8 million shares of stock at $20 per share for Kemp Corporation. The investment banker incurs expenses of $1 million in floating the issue and the company incurs expenses of $750,000. The investment banker will receive 8 percent of the proceeds o
Because no job can ever be completely free from hazards, occupational safety requires a balancing of the interests of employees and employers. Using the ethical theories that are discussed in Chapter 3, defend a position regarding how these competing interests should be balanced from a moral perspective. Please use: Beau
1.Finding the implied interest rate (APR) when customers do not take the discount for credit terms of credit terms of 2/10 net 30.. 2.What is the effective rate for the above?
1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense? A. Bad Debts Expense .........
Please show formula and calculation: 1) You want to buy a house and wish to borrow $300,000. What would the monthly payment be if the loan requires equal monthly payments for 30 years at an interest rate of 5% of apr. What would your outstanding loan balance be immediately after you make your first payment? 2) You are pan
Set up the flexible budget at three levels for the income statement. Companies prepare budgets based on absorption and/or variable costing. Due to lack of information, we're limiting our budgeting to the absorption approach. You still need to estimate cost behavior based on trends for Sirius XM www.siriusxm.com Information
I'm confused and need help with answering this scenario: You are the chief executive officer of Money Games Inc.(MGI), which has begun to market Borrow & Spend, a video game set in the world of finance. To buy ads, MGI borrows $50,000 from First Savings Bank. On MGI's behalf, you sign a note for the loan and offer its account
Argue either for or against this statement and be sure to defend your reasoning. Reports are written for business executives who want them. Thus, you don't have to be concerned about holding your reader's interest.
You will prepare a flexible budget for next year for the company of your choice (A bakery is my choice). The budget needs to be realistic and based on corporate and economic trends. Set up the flexible budget at three levels for the income statement. Companies prepare budgets based on absorption and/or variable costing. Due
1. Suppose you make an investment of $10,000. This first year the investment returns 9%, the second year it returns 5%, and the third year in returns 4%. How much would this investment be worth, assuming no withdrawals are made? 2. How much would you need to deposit every month in an account paying 9% a year to accumulate by
FASB ASC: effective interest rate for valuing note, patent defense costs, prepaid, refinancing on classification
1. You acquire the outstanding loan (note) of Shepard Company, who is having financial difficulty. Because of the financial difficulty, Shepard Company's credit rating has been downgraded and you acquire the note at a discount. To determine the purchase price of the note you discount it at the effective rate of interest rathe
1. Of the following, the most likely effect of an increase in income tax rates would be to? 2. A 10-year annual payment corporate coupon bond has an expected return of 11% and a required return of 10%. The bond's market price is 3, A bond that pays interest semiannually has a 6% promised yield and a price of $1045. An
The present value of $100,000 to be received in five years at an interest rate of 16%, compounded annually, is $47,610. Required: Using a present value table (Table 6-4 and Table 6-5), your calculator, or a computer program present value function, calculate the present value of $100,000 for each of the following items (par
Can you explain some benefits and drawbacks of raising funds through debt for the FedEx Corporation?
You live in Detroit, MI, the headquarters for many U.S. auto manufacturers, and work for one of them. Analysts have determined that rates of return on securities are better explained by multifactor models, and that the rate of return of a portfolio of U.S. auto manufacturers is explained as: please see attachment.
(1) Brooks Company has a debt-equity ratio of 0.75. Return on assets is 10.4 percent, and total equity is $900,00. What is the equity multiplier? Return on equity? Net income? (2) If the SGS Corp. has a 13 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate? (3) Conrad Co. had $285,000 in taxable
A client comes to you for investment advice on his $500,000 winnings from the lottery. He has been offered the following options by three different financial institutions and requests assistance to help understand which option would be the best for his investment. Option 1: 6% compounded interest quarterly for 5 years. Opti
1. How much of Coca-Cola's long-term debt is due in 2007? 2. How much of Coca-Cola's long term debt is due in each of the next 4 years (2008-2011)? 3. Why might financial analysts be interested in these scheduled debt payments? What options does the company have with regard to making its payments?
Newell Manufacturing: Analyzing installment note and imputed interest. How much interest expense would Newell record in 2012 for the installment loan? What would the loan balance be on December 31, 2012; one day before Newell makes the second loan payment?
On January 1, 2011, Newell Manufacturing purchased a new drill press that had a cash purchase price of $6,340. Newell decided insted to pay on an installment basis. The installment contract calls for four annual payments of $2,000 each beginning in one year. Newell was not required to make an initial down payment for the drill p
McVay Corporation: effective interest method on bonds/ recording bond interest payments December 31, 2011
On July 1, 2011, McVay Corporation issued $15 million of 10-year bonds with an 8% stated interest rate. The bonds pay interest semiannually on June 30 and December 31 of each year. The market rate of interest on July 1, 2011, for bonds of this type was 10%. McVay closes its books on December 31. 1. At what price were the bond
Star Solutions, Inc. paid a dividend last year of $3.55, which is expected to grow at a constant rate of 3%. Star Solutions has a beta of 1.8 and their stock is currently selling for $31.47. If the market interest rate is 9% and the risk-free rate is 4%, would you purchase Star Solutions' stock? a. No, because it is overvalue
Please help me understand the formulas and the setup. Spread sheet in Excel will be helpful too (when applicable). BioMax Inc. offers an 8 percent coupon bond that has a $1,000 par value, semiannual coupon payments and 20 years of its original 25 years left to maturity. Which of the following statements is true if the mark
What are some examples of the different types of loans out there? What is the difference between them?
What is the relationship between inflation and interest rates? How does this relationship affect asset prices? How does the unemployment rate affect interest rates? How do changes in interest rates affect the balance of payments? What is the difference between systematic and unsystematic risk? How is the beta coefficient used
The Apex supplies corporation needs to acquire 100 million in funds to expand their facilities. The bank has offered them a discounted loan at 10% and a compensating balance of 6% . What is the effective interest rate on this loan?
Which of the following might indicate the correct choice of a plug figure if a financial plan shows sources of funds to be $100,000 and uses of funds to be $90,000? a) External debt must increase by $10,000. b) Dividend payments must decrease by $10,000. c) Cash balances must increase by $10,000. d) The capital budget must decrease by $10,000. Which of the following factors is fixed and thus cannot change for a specific perpetuity? a) PV of a perpetuity b)Cash payment of a perpetuity c) Interest rate on a perpetuity d) Discount rate of a perpetuity
Which of the following might indicate the correct choice of a plug figure if a financial plan shows sources of funds to be $100,000 and uses of funds to be $90,000? a) External debt must increase by $10,000. b) Dividend payments must decrease by $10,000. c) Cash balances must increase by $10,000. d) The capital budget must
assume that the Nike Inc. (NKE) (http://www.nikebiz.com/; http://money.cnn.com/quote/quote.html?symb=NKE) is expanding globally. One way to expand globally is to open up new branches. But Nike Inc. might need to raise funds in order to finance new projects. Read the information in the background material, look for more in