6. On January 1, 2018, Pluto Ltd. issued a 15-year, $600, 000 instalment note payable, with annual fixed principal payments of $40,000, plus 5% interest. The cash payment for the first year is a. $30,000. b. $40,000. c. $42,000. d. $70,000.
Q: Required information Exercise 9-21 (Algo) Calculate the issue price of bonds (L09-7) [The following…
A: Bonds are debt units that are traded in the financial markets where it has a fixed maturity date…
Q: a. If the payout ratio is set at 50% and no external debt or equity is to be issued, what is the…
A: The Sustainable Growth Rate (SGR) is a financial metric that measures the rate at which a company…
Q: Future value and present value concepts are applied in various ways, such as calculating growth…
A: The growth rate for 1934-1936 was The growth rate for 1936-1939 was The growth rate for 1934-1939…
Q: Duo Corporation Year 812345 is evaluating a project with the following cash flows: Cash Flow -$…
A: YearCash flow0-$28,800.001$11,000.002$13,700.003$15,600.004$12,700.005-$9,200.00Discount…
Q: Relevant cash flows for a marketing campaign ***I need the Excel Formulas including Operating Cash…
A: When an investment's cash flow over another investment's cash stream or the current cash flow is…
Q: On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued…
A: The "discount on a bond" means the gap or difference between a bond's face value or par value) and…
Q: Weighted-average cost of capital 14.59 X %
A: WACC stands for "Weighted Average Cost of Capital." It is a financial metric used by businesses and…
Q: At one point, some Treasury bonds were callable. Consider the prices on the following three Treasury…
A: Calculation of X:C2=C1∗X+C3∗(1−X).8.85=7.10∗X+12.60∗(1−X)8.25=7.10∗X+12.60−12.60∗XX=0.79091
Q: One year ago, your company purchased a machine used in manufacturing for $100,000. You have learned…
A: The total present value of cash inflows and outflows is known as net present value, or NPV. To put…
Q: What is total book value? What is total market value? What is the cost of debt?
A: The after-tax cost of debt measures the actual interest rate that a firm pays on its debt after…
Q: You have just invested in a portfolio of three stocks. The amount of money that you invested in each…
A:
Q: efer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest…
A: The fair value or the bond price is the sum of the present value of all future cash flows. Cash…
Q: Which of the following formulas is INCORRECT? O A. Div, EPS, X Dividend Payout Rate OB. E=(Div/P)+g…
A: In this question, we are required to identify the incorrect formula.
Q: Suppose a stock has a current price $50 and will pay a dividend $2 at the end of second month. The…
A: A call option is a financial contract that, before or on a designated expiration date, grants the…
Q: A woman, with her employer's matching program, contributes $300 at the end of each month to her…
A: Future value of the money is the amount of deposit done and the amount of compounded interest…
Q: Required information On January 1, 2024, Avalanche Corporation borrowed $102,000 from First Bank by…
A: Net effect on earnings describes the increase in the retained earnings in the balance sheet under…
Q: The following are estimates for two stocks. Firm- Specific Standard Deviation 34% 44 Expected Stock…
A: Standard deviation - The standard deviation is comprised of two components: the systematic risk and…
Q: As a bond fund manager, you are considering corporate bonds issued by Super Buy (SB). Each SB bond…
A: Price of the bond is the present value of cash flow from the bond and present value of par value of…
Q: Sarah and James Hernandez purchased 320 shares of Macy’s stock at $15 a share. One year later, they…
A: Variables in the question:No. of shares=320Purchase price per share=$15Sale price per share=$35…
Q: An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes.…
A: Free cash flow is that amount which is earned by the investor from the project. It is the net amount…
Q: Required information A potential investment has a cost of $455,000 and a useful life of 7 years.…
A: Capital budgeting refers to the financial technique used for evaluating the viability and…
Q: James Consol Company currently pays a dividend of $2.5 per share on its common stock. The company…
A: The value of a share of common stock is equal to the present value of all future cash flows…
Q: ectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used…
A: Expectation theory says that interest rates in the short term should be inline with long term…
Q: Variable costs: Cost of goods sold Selling expenses Administrative expenses Contribution margin…
A: Break even point is where there is no profit and no loss situation and total cost is equal to sales.
Q: Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm…
A: Answer-aStock…
Q: Brief introduction/background of CIBC. (Comprehensive summary of the bank’s origin identifying its…
A: The Canadian Imperial Bank of Commerce, commonly referred to as CIBC, is one of the 'Big Five' banks…
Q: Suppose you want to have $300,000 for retirement in 35 years. Your account earns 4% interest. How…
A: The monthly deposit is an annuity because it is made at the end of each month. The future value of…
Q: An oil refinery finds that it is necessary to treat the waste liquids from a new process before…
A: EUAC is the equivalent annual uniform cost which is equivalent to all cost and is used for projects…
Q: Summit Record Company is negotiating with two banks for a $134, 000 loan. Fidelity Bank requires a…
A: Given,Loan Amount = $134,000Fidelity Bank = 18%Southwest Bank = 9%Stated Rate for both Banks = 12%
Q: Calculating interest rates The real risk-free rate (r*) is 2.8% and is expected to remain constant.…
A: The objective of the first question is to calculate the yield on a fifteen-year, AA-rated bond…
Q: Media Blas Incorporated issued-bonds 10 years ago at $1,000 per bond. These bonds had a 25-year life…
A: Bonds are fixed-income instruments that reflect investor loans to borrowers, who usually represent…
Q: A $35,000 bank loan is to be repaid in equal yearly payment over 15 years at an effective annual…
A: The amortization refers to the systematic, equal and regular repayment of loan amount for the period…
Q: Total assets of the firm is $5,000,000. Outstanding stock is 50,000 shares. EBIT is $500,000.…
A: In this question, we are required to determine the Earnings per Share (EPS) and Return on Equity…
Q: 1. Corp A wishes to acquire the business of Corp T. Corp T stock is worth $650 million, and its…
A: The acquisition is when one company wants to overtake or acquire another. If voting rights are to be…
Q: MIRR A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 12…
A: MIRR is the modified internal rate of return (MIRR). The MIRR is useful in situations where cash…
Q: are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that…
A: The cash flows of the project include the initial investment amount, the operating cash flows, and…
Q: A 10-year bond of a firm in severe financial distress has a coupon rate of 10% and sells for $900.…
A: Yield to maturity can be calculated by following function in excel=RATE (nper, pmt, pv, [fv],…
Q: The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor…
A: Here, in millionsAMKLALamCompany Assumed Values $ 20,513.00 $ 26,202.00Equity Assumed Values $…
Q: Project the annual free cash flows (FCF) of buying the chains. The annual free cash flows for years…
A: Net Present Value (NPV) is a financial concept widely used in investment analysis and capital…
Q: A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay…
A: Here, Notional Amount € 15,000,000.00Fixed Rate10.05%Interest Received RateSOFR+0.5%Interest Rate…
Q: Cookie Dough Corporation has two different bonds currently outstanding. Bond M has a face value of…
A: Bonds are debt instruments issued by companies. The issuing company pays periodic coupons or…
Q: Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying…
A: It is a capital budgeting technique used for making investment decisions.Net Present Value (NPV) is…
Q: A company just paid a dividend of $2, what is the dividend in period 5 f the growth rate is 10% ?
A: Just paid dividend (D0) = $2Growth rate (g) = 0.10Period (n) = 5 yearsDividend in period 5 = ?Future…
Q: Garrett deposits $8000. Determine the APY if there is an APR of 3% compounded daily. Express your…
A: APY stands for annual percentage yield. It takes into consideration the compounding frequency. APR…
Q: Last year, Joan purchased a $1,000 face value corporate bond with an 10% annual coupon rate and a…
A: Rate of Return:The rate of return is a measure used to evaluate the profitability of an investment…
Q: Achi Corp. has preferred stock with an annual dividend of $3.19. If the required return on Achi's…
A: Stock price refers to the price at which the stocks are bought and selling in the market by…
Q: The current price of a stock is $50, and the annual risk-free rate is 5.5%. A call option with a…
A: Value of call option = C0 = $13.78Current price of the stock = S0 = $50Strike price = K = $43Risk…
Q: Suppose a five-year, $1,000 bond with annual coupons has a price of $897.56 and a yield to maturity…
A: The coupon rate is the interest rate paid by the issuer on a bond over the life of the instrument.…
Q: After spending $9,700 on client-development, you have just been offered a big production by a new…
A: Free cash flow:Free cash flow refers to the amount of cash a company generates after accounting…
Q: Note: Do not round intermediate calculations. Round your answer to the nearest ce $ CA Amount of…
A: In annuity due payments are made at the beginning of periods and value of annuity is the present…
4
Step by step
Solved in 3 steps
- On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
- Lime Co. incurs a $4,000 note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year? A. $800 B. $1,000 C. $500 D. nothing, since this is a noncurrent note payableHalep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
- Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267On November 1, 2018, A-1 Products borrowed $64,000 on a 5%, 5-year note with annual installment payments of $12,800 plus interest due on November 1 of each succeeding year. On November 1, 2020, what is the balance of the Long-Term Notes Payable account? (Round your answer to nearest whole number.) OA. $38,400 OB. $64,000 OC. $12,800 O D. $51,200
- On March 1, 2024, Lewis Services issued a 10% long - term notes payable for $24,000. It is payable over a 6– year term in $4000 principal installments on March 1 of each year, beginning March 1, 2025. Which of the following entries needs to be made on March 1, 2024? O A. Current Portion of Long - Term Notes Payable Long- Term Notes Payable 24,000 24,000 O B. Long - Term Notes Payable Accounts Payable 24,000 24,000 O C. Long - Term Notes Payable 4000 Cash 4000 O D. Cash 24,000 Long - Term Notes Payable 24,0003.Isko Company, a calendar-year company, has a 6% note receivable dated November 1, 2020 in the original amount of P3,000,000. Payments of P1,000,000 in principal plus interest on the outstanding balance are due annually on October 31, 2021, 2022 and 2023. How much is the interest revenue from the note for the year ended December 31, 2021?On July 8, Action Co. issued an $80,000, 6%, 90-day note payable to Scanlon Co. Assuming a 360-day year, what is the maturity value of the note? a.$84,800 b.$78,800 c.$80,000 d.$81,200