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Calculate for each year the loan balance that remains outstanding, the interest payment on the loan, and the reduction in the loan balance.
In addition, it received $12,500 in interest income from investment and another $10,000 in dividends from a wholly owned subsidiary. What is the company's total tax liability for the year?
In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5965%. Recognizing that coupons are paid semiannually, calculate the bond"s price.
Johnson Corporation has operating income of $120,000, pays interest charges of $60,000, and pays dividends of $20,000. What is the company's tax liability?
If a bond's coupon rate is higher than its yield to maturity, then the bond will sell for more than face value. If a bond's coupon rate is lower than its yield to maturity, then the bond's price will
Preferred stock has a dividend rate of 12 percent. The tax rate is 46 percent. What is the required income before interest and taxes to satisfy the dividend requirement?
A machine costs $380,000 and is expected to produce the following cash flows:
The common stock is selling at a high P/E ratio. The company is considering issuing either common stock or debt. Which type of financing is recommended?
Calculate the approximate price change for this bond using only its duration assuming its yield to maturity increased by 150 basis points. Discuss the impact of the calculation, including the convex
The fund charges 12b-1 fees of 1%, which are deducted from portfolio assets at year-end. What is net asset value at the start and end of the year? What is the rate of return for an investor in the f
What are some comparative advantages of investing in the following:
Estimate (a) cash collections for March and the cash balance at March 31 under the present policy, and (b) cash collections for March and the cash balance at March 31 according to the new policy
Daily costs for Kelso Manufacturing include $1,000 of fixed costs and total variable costs are show below.
Beginning inventory, purchases, and sales data for portable DVD players are as follows:
The cash is available in 2 days on average. (1) Calculate the disbursement, the collection, and the net floats and (2) interpret the result (CFM adapted).
Assume interest rates for bonds today is 5% for an AAA rated bond. Calculate the price of the bond you have selected relative to the 5%. Is the bond selling at a premium or a discount? Why? Be sure
Net Working Capital. Winston Corporation has the following selected assets and liabilities. Determine the company's net working capital.
Far Side Corporation is expected to pay the following dividends over the next four years: $11, $8, $5, and $2. Afterward, the company pledges to maintain a constant growth rate in dividends forever.
By dividing the southern region, collections will be accelerated by ½ day. The rate of return is 17 percent. Should the southern region be divided?
Sales for Petro Equipment are expected to be 5,800 units for the coming month. The company keeps a 25% of unit sales for each month in ending inventory.
Marcel Co. is growing quickly. Dividends are expected to grow at a 30 percent rate for the next three years, with a growth rate falling off to a constant 6 percent thereafter.
As a result of the system, the float time will be reduced by 3 days. The rate of return is 14 percent. Should the lockbox arrangement be instituted?
Accounts are paid on average 60 days after sale. Sales per month average $25,000. What is the investment in accounts receivable?
Explain why sunk costs should not be included in a capital budgeting analysis, but opportunity cots and externalities should be included. Give an example of each.
It anticipates that 30 percent of its customers will take advantage of the discount. The collection period is expected to decrease to 2 months. Should the discount policy be implemented?