Accounting question and answers for November 27, 2023
- Q You are a lender and have offered a borrower a $400,000 30-year fixed-rate mortgage loan at 4.68% with monthly payments and fully amortize. The loan does not have any origination...
- Q Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $8,434.22 that will...
- Q Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and...
- Q A loan is to be repaid over 30 years, with month-end repayments of 2,000. If the interest rate is 3.9% p.a. compounded monthly. Calculate the interest paid for year 10....
- Q The tax rate used in EBIT*(1-T) is calculated as tax expense/earnings before taxes. True False
- Q Your client has accumulated $1,408 on his saving account . He would like to withdraw $232 a year at the end of the year. Leaving aside issues of inflation,...
- Q Standard Deviation of Security A = .2; Standard Deviation of Security B = .8; Correlation of A and B = 0.25. What is the Covariance of A and B?
- Q Nanometrics, Inc. has a beta of 2.53. If the market return is expected to be 12.90 percent and the risk-free rate is 6.40 percent, what is Nanometrics required return? (Round...
- Q Knightmare, Inc., will pay a dividend of $6.55, $10.65, and$13.85 per share for each of the next three years, respectively. The company will then close its doors. Investors require a...
- Q Leah has $600,000 saved for retirement in an account earning 2% interest, compounded weekly. How much will she be able to withdraw each week if she wants to take withdrawals...
- Q footsteps company has a bond outstanding with a coupon rate of 5.9 percent and annual payments. the bond currently sells for $935.93, marures in 15 years, and has a par...
- Q Kim Jones has just opened a real estate office under the licensed name of K.C Smith , which of the following names must be used for business transaction
- Q a. Consider two 20 years bond with annual coupon payments. Bond A has an 8 percent coupon rate and bond B has a 4 percent coupon rate. If the market...
- Q A portfolio consists of three bonds as follows. amount invested bond duration Bond X $ 5,000 8.6 years Bond Y $...
- Q Seether, Inc., has the following two mutually exclusive projects available. Year Project R ...
- Q A bank sells a three against nine $4,000,000 FRA on a six-month interest rate for a six- month period beginning three months from today and ending nine months...
- Q How direct insurers in Asia normally sell their insurance product?
- Q Find the EAR in each of the following cases. (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Use 365 days...
- Q Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $ 1 comma 000$1,000, and a coupon rate of 7.2 %7.2% (annual...
- Q Toyota Corp.'s stock price has a variance of returns of 0.0305. Honda Corp.'s stock has a variance of returns of 0.0515. The covariance between Toyota and Honda is 0.0175. What...
- Q A trader has a portfolio worth $35 million with a beta of 0.9. The futures price for a contract on the S&P 500 index is 3,000. The contracts call for...
- Q Harper Industries has $500 million of common equity on its balance sheet; its stock price is $24 per share; and its market value added (MVA) is $70 million. How many...
- Q Oscar Inc. has inventory in Japan valued at 13,688,000 Yen one year ago. One year ago the exchange rate for dollars to yen was 1 yen = $0.0128. Today the...
- Q A forming die (Die A) which is used in the manufacture of your product has an acquisition cost of $70,000, a useful life of two years and an annual...
- Q Columbus Security Corp. has a ROE of 28 percent, profit margin of 6.6 percent, and total asset turnover of 1.3 . What is the firm's debt-equity ratio? (Round it to...
- Q Question 4 Dividend provide income to investors only if it is received in an economic environment where there is relative stability in inflation. In emerging economies of Africa, dividend payment...
- Q A company is considering buying either Machine A or Machine B. Machine Both machines cost $47,644, but Machine A is expected to last 4 years and generate cash flows of...
- Q The Gabriel Packaging Company, Inc. currently has sales of $5,000,000, cost of goods sold amount to 80% of sales, and the firm is in the 30% tax bracket. It the...
- Q 1) A. Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 10.5%; rRF = 5.5%; rM = 9.5%. Round...
- Q bond coupon payments and dividends from preferred stocks and common stock can all enjoy tax-deductible feature True or False
- Q (d) To the closest year, how long will it take a $200 investment to double if it earns 7 percent interest? How long will it take if the investment earns...
- Q Capital budgeting criteria: ethical considerations An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it...
- Q 2. Discuss three Financial Ratios which would be helpful in assessing the financial strength of a Fortune 500 company of your choice.
- Q Year 1 2 3 4 5 Free Cash Flow $22 million $26 million $29 million $32 million $34 million XYZ Industries is expected to generate the above free cash flows...
- Q true or false question and fill in the blank. please answer both. thanks. 1. Call option, gives you the right to purchase an asset for none specific price...
- Q you purchase shares of BH inc at the beginning of the year for 30$ per share. after receiving dividends of 4 $ per share you sell at the end of...
- Q Julian is establishing a company to run the business that he previously ran as a sole trader. As his accountant/financial adviser you have told him that he needs to...
- Q Myca Corp. has a project with the following cash flows. What is the value of the cash flows today assuming an annual interest rate of 10.7 percent? Year Cash Flow...
- Q InstaTok maintains a debt-equity ratio of 0.15, and has an equity cost of capital of 10%, and a debt cost of capital of 3%. InstaTok corporate tax rate is 25%,...
- Q Present a framework for estimating the value of operational synergies from a merger. Identify different potential sources of such synergies. Explain possible difficulties in making estimates of the value of...
- Q Given that nominal interest rates are 8% and the inflation rate is 3%, about how much do you need to invest today to have the equivalent of $100,000 in 2010...
- Q CASE 1 (25 points) Look at the below book-value balance sheet for Universal Corporation. The preferred stock currently sells for 15 per share and pays a dividend of...
- Q Profit margin = 8.9 % Capital intensity ratio = .50 Debtequity ratio = .65 ...
- Q Consider a deposit of $10,000 made for 5 years earning 5.00% interest. How much interest was earned due to compounding? In other words, what was the difference between compounded interest...
- Q T4.1: Budget analysis.* Instructions: Create a table where you can compare the operating budget and the financial budget for: Basis of accounting used in its preparation Purpose Contents Information they...
- Q The price of one-year, two-year, and three-year zero-coupon Treasury bond are currently $980, $860, and $780 respectively. The government plans to issue a new three-year annual coupon bond with a...
- Q A firm has $3,360,000 in its common stock account and $33,600,000 in its paid in capital account. The firm issued 480,000 shares of common stock. What was the issue price...
- Q MT 5) If someone will pay you 100 dollars in 19 years and interest rate is estimated to be 7.2% over those years, what is the estimated value of that...
- Q Mike Mulligan Excavation Inc. has one Caterpillar 345DL Hydraulic Excavator. It was purchased at the beginning of 20X4 for $288,115. The excavator is in Class 43 with a 30% depreciation...
- Q A $4 million investment today, in a project to last 10 years, is believed to result in the following incremental cash flows: annual increase in sales of $2,100,000 operating expenses...
- Q Joe M. purchases a house for $410,000. He sells the home 8 years later for $629,000. What is his internal rate of return (IRR)? 5.15% 1.50% 15% 5.50%
- Q Why would shortening the duration and/or increasing coupon rates would reduce the risk of decline in bond prices in an increasing interest rate environment?
- Q David Rubin has $100,000 to invest over 5 years. David is very risk-averse and has a target average return of 4% per year for his investment over the next...
- Q What is the PV of a 5-year annuity of $5,000 per year with the first payment starting in year 6? Assume an 8% required rate of return.
- Q What is the rate of return for an investor who pays $1,054.47 for a 3-year bond with coupon of 6.5% and sells the bond 1 year later for $1,037.19?
- Q on 1/1/16 purchased a new, fully equipped food truck. The company signed a note that specified four equal annual payments (at each year-end) in the amount of $25,000. The interest...
- Q What is the importance of federal grants for states and localities? concerning ice
- Q Your father incested a lump sum 26 years ago at 4.25 percent intrest. Today, he gave you the proceeds if the investment which titalef $47,008. how much did your father...
- Q Assume that the risk-free rate is 4.5% and that the market risk premium is 7%. What is the required rate of return on a stock with a beta of 1.1?...
- Q What information does the payback period provide? Suppose ABC Telecom Inc.s CFO is evaluating a project with the following cash inflows. She does not know the projects initial cost; however,...
- Q Assume that a bank has assets located in London worth 100 million on which it earns an average of 8% per year. The bank has 150 million in liabilities on...
- Q Seth, Tori, and Uwe each borrow $6000 for 6 years at 6% interest compounded semi-annually. Seth makes no payments until the sixth year when he pay all the principal...
- Q Assume that Betty earns $5 per hour working in a clothing store. She gets one and one-half times her wage if she works over 40 hours. In addition, she can...
- Q if you invest $10,000 at the beginning of each year for 10 years, how much will you have at the end of ten years if the annual interest rate is...
- Q Cloud Accounting (Pty) Ltd is a financial services business that supports small and medium businesses. The companys particular focus is on smart technology for business. They offer accounting solutions that...
- Q ABF Corp is an unlevered firm that has total assets of $5,750, earnings before interest and taxes of $600, and 500 shares of stock outstanding. Assume the firm decides to...
- Q EBS Plc, an all equity-financed firm, has three strategic business units. The polythene division has capital of 8m and is expected to produce annual returns of 11% for the next...
- Q Assume that Krafty Foods and Whole Cheese have identical assets that will pay off either $200 million or $300 million a year from today. Krafty is funded with equity that...
- Q Malayan Banking Ltd is a major lender to Raffles Hotel Pty Ltd. Because of the uncertainty caused by COVID, the bank wanted the ability to appoint a director to...
- Q In the Building and Personal Property Form(BPP), which of the following is considered " business personal property"? (A) The structure itself (B) Additions to the structure (C) Underground pipes (D)...
- Q The SOMO fund has $65 million in assets at the beginning of the year and 5 million shares outstanding throughout the year. Throughout the year assets grow at 11.5%(gross return)....
- Q Far Side Corporation is expected to pay the following dividends over the next four years: $8, $7, $6, and $2. Afterward, the company pledges to maintain a constant 3 percent...
- Q 16. Referring to the advice on pages 22728, revise the following sentences to eliminate the misplaced modifiers. b. Information provided by this program is displayed at the close of the...
- Q 1. If a company issues a 30-years zero coupon bond with a maturity value $1000, what is the current price for the bond if the implied interest rate is 6.8%?...
- Q Baron Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt. Its cost of equity is 9 percent, the cost of...
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