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If you deposit $50 per month in a savings and loan association at 10 percent interest, how much will you have in your account at the end of the 12th year?
Describe ways in which society has brought pressure on accountants to better serve its needs. Describe how the accounting profession has responded to these pressures. Could the profession have better
If you deposit $1 at the end of each of the next ten years and these deposits earn interest at 10 percent, what will the series of deposits be worth at the end of the 10th year?
Describe what is meant by measurement in accounting. According to this editor, what are the kinds of measurements investors want?
If the property is expected to be worth $50,000 when you receive it, what is the present value of your interest, discounted at 10 percent?
Explain why neutrality is such an important quality of financial statements. Identify examples of the lack of neutrality in accounting reports.
What lump sum settlement, if paid today, would have the same present value as the $7,500 annual annuity? Assume a 10 percent discount rate.
Discuss the relevance of the accounting standard-setting process to analysis of financial statements.
What is the most you can pay for the land today if your required rate of return is 15 percent? What is the expected (annualized) return on this investment over the 10-year holding period if you p
At the end of year 4, the property is sold with 8 percent selling expenses. What is the before-tax equity reversion?
Why might a bank choose to record more loan loss reserve than necessary? Explain how overstated loan loss reserves can be used to manage earnings in future years.
A former Chairman of the SEC refers to hidden reserves on the balance sheet as "cookie-jar" reserves. These reserves are built up in periods when earnings are strong and drawn down to bolster earnin
Calculate the unlevered internal rate of return (IRR). Calculate the unlevered net present value (NPV). The property is sold at the end of year 4 for $860,000 with selling costs of 4 percent.
What is the estimated Net Operating Income? Using the selling price, what is the implied first year overall capitalization rate? What is the (effective) gross income multiplier?
Accrual accounting requires estimates of future outcomes. For example, the reserve for bad debts is a forecast of the amount of current receivables that will ultimately prove un collectible.
Analysts produce forecasts of accounting earnings along with other forward-looking information. This information has strengths and weaknesses versus financial statement information.
Prepare a classified statement of financial position; assume that $13,900 of the notes payable will be paid in 2013.
You are considering the purchase of a quadruplex apartment. What is the effective gross income multiplier? What is the overall capitalization rate?
Prepare the assets section of the company"s classified statement of financial position
The farmer has offered to pay $20,000 today or an annuity of $3,200 at the end of each of the next 10 years. Which payment method should Dr. Jackson accept if his required rate of return is 10 pe
The statement of financial position for Diaz Company includes the following accounts: Accounts Receivable £12,500; Prepaid Insurance £3,600; Cash £15,400; Supplies £5,200; an
What is the difference in the proceeds to the company net of expenses? Other things being equal, which is the better deal?
You are able to buy an investment for $1,000 that gives you the right to receive $438 in each of the next three years. What is the internal rate of return on this investment?
How much would you pay for an investment that provides $1,000 at the end of the first year if your required rate of return is 10 percent? Now compute how much you would pay at 8 percent.
It satisfactory to use the less costly abstract and attorney's opinion as evidence of title for a residence in an urban subdivision. Discuss the merits or risks of this policy.