At December 31, 2020, Bingo Industries has $778,500 in bonds payable (due in 2025), $128,000 in notes payable (due in 2028), and a $65,700 discount on bonds payable. Bingo is thinking about leasing equipment. The present value of the lease payments is $172,050. Of that amount, Bingo would pay 30% within the next 12 months, another 30% in the 12 months after that, and the remaining 40% in the 12 months after that. If Bingo proceeds with the lease, its total long-term liabilities will be Select answer from the options below: $840,800. $961,235. $1,012,850. $892,415.

At December 31, 2020, Bingo Industries has $778,500 in bonds payable (due in 2025), $128,000 in notes payable (due in 2028), and a $65,700 discount on bonds payable. Bingo is thinking about leasing equipment. The present value of the lease payments is $172,050. Of that amount, Bingo would pay 30% within the next 12 months, another 30% in the 12 months after that, and the remaining 40% in the 12 months after that. If Bingo proceeds with the lease, its total long-term liabilities will be Select answer from the options below: $840,800. $961,235. $1,012,850. $892,415.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 3P

See similar textbooks

Similar questions

cutiepie Company leased a warehouse from cheescake Company on December 31, 2020. The lease term is for 3 years. The implicit interest rate is 11%. The lease payment is P100,000 payable at the end of each year. The payments are variable upon the consumer price index outstanding at the beginning of each period. The consumer price index oustanding (in millions of PHP) and related incremental borrowing rate at each date are as follows: December 31, 2020 – P100.00 and 12% January 1, 2021 – P100.00 and 12% January 1, 2022 – P98.00 and 13% January 1, 2023 – P105.00 and 9% The carrying value of the lease liability as of December 31, 2022 is?
Moore’s Inc. will be making lease payments of $3,895.50 for a 10-year period, starting at the end of this year. If the firm uses a 9 percent discount rate, what is the present value of this annuity? (Round to the nearest dollar.)
Jenny Enterprises has just entered a lease agreement for a new manufacturing facility. Under the terms of the agreement, the company agreed to pay rent of $12,500 per month for the next 10 years with the first payment due today. If the APR is 6.48 percent compounded monthly, what is the value of the payments today?
Please give a detailed solution On January 1, 2020, TPM Inc. acquires a piece of equipment for a list price of $300,000. It pays$20,000 immediately and writes a note for the remainder. Annual interest of 3% is due everyDecember 31st, and the principal of the note is payable in 6 years.TPM’s incremental borrowing rate is 6%, while the seller’s incremental borrowing rate is 7%.TPM is a public company. It depreciates its equipment using the diminishing balance method at15%. The equipment’s residual value is $40,000 at the end of its useful life. 1) Prepare all required journal entries for the years 2020 and 2021.2) Determine the Asset’s net book value on January 1, 2024.3) Determine the note payable carrying value on January 1, 2024
A $700,000 loan was received on Nov. 30, 2022, with annual interest at 9.5%, C/M, requires monthly, end of period payments of $7,700, beginning Dec.31, 2022. How many payments are needed to fully pay off the loan? How much will the final payment be? How much interest is paid on the 30th payment? What is the balance still owing after 10 years? How much of the loan principal will be paid, in total, during years 6 and 7? How much interest is paid, in total, during the life of the loan?
Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,775,000, or it can make annual payments of $340,000 for 15 years. Click here to view factor tables. Payments must begin now and be made on the first day of each of the 15 years. What payment method would you recommend assuming an expected effective-interest rate of 9% during the future period? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Present value of annual payment $ Recommended payment method SUPPORT
Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $1,979,000, or it can make annual payments of $270,300 for 15 years. Click here to view factor tables. Payments must begin now and be made on the first day of each of the 15 years. What payment method would you recommend assuming an expected effective-interest rate of 11% during the future period? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Present value of annual payment Recommended payment method $ Immediate Payment ✔
A manufacturer can lease a machine for 7 years at $3,000 per quarter, payable at the beginning of each quarter. Alternatively, they can purchase the machine for $78,000 and sell it for $8,700 in 7 years. The cost of capital is 6.2% compounded annually. a. What is the present value of the cost: (enter a positive value accurate to the nearest dollar) i) of the lease option? $ ii) of the purchase option? $ b. Should the manufacturer purchase or lease? O Purchase since Purchase PV is higher than Lease PV O Lease since Lease PV is higher than Purchase PV O Lease since Purchase PV is lower than Lease PV O Purchase since Lease PV is lower than Purchase PV Lease since Lease PV is lower than Purchase PV Purchase since Lease PV is higher than Purchase PV Submit Question
A property development agreement valued at $47,000 requires annual lease payments of $7,500. The first payment is due three years after the date of the agreement and interest is 9% compounded monthly. For how long will payments be made? The payments will be made forO vear(s) and O month(s). (Type whole numbers.)
A manufacturer can lease a machine for 6 years at $3,680 per quarter, payable at the beginning of each quarter. Alternatively, they can purchase the machine for $76,000 and sell it for $8,700 in 6 years. The cost of capital is 9.1% compounded annually. a. What is the present value of the cost: (enter a positive value accurate to the nearest dollar) i) of the lease option? ii) of the purchase option? GA
Property is expected to have NOI of $100,000 in the first year. The NOI is expected to increase by 3 percent per year thereafter. The appraised value of the property is currently $1 million and the lender is willing to make a $900,000 participation loan with a contract interest rate of 8 percent. The loan will be amortized with monthly payments over a 20-year term. In addition to the regular mortgage payments, the lender will receive 50 percent of the NOI in excess of $100,000 each year until the loan is repaid. The lender also will receive 50 percent of any increase in the value of the property. The loan includes a substantial prepayment penalty for repayment before year 5, and the balance of the loan is due in year 10. (If the property has not been sold, the participation will be based on the appraised value of the property.) Assume that the appraiser would estimate the value in year 10 by dividing the NOI for year 11 by a 10 percent capitalization rate. Calculate the effective cost…
On January 1, 2020, Tamia & Co, sold a machinery and immediately leases it back for a period of 4 years. Remaining useful life of the machinery is 10 years. Selling price is P3,000,000. Carrying amount of the machinery is P2,250,000. Annual rental is P400,000 payable every December 31, starting December 31, 2020. Implicit rate is 10% and PV factor for ordinary annuity at 10% for 4 periods is 3.169865. If the fair value of the sold and leased asset is P3,200,000, what amount of gain/loss related to the right transferred shall be recognized by the seller-lessee? a. Zero b. 950,000 c. 435,796 d. 514,204