Reference no: EM13498223
Question I Blackwell Hotels Inc.
On January 1, 2011, Blackwell Hotels Incorporated (BHI) acquired a building costing $20,000,000 to use in its operations. The building has an expected useful life of 25 years, with an estimated salvage value of $5,000,000. To pay for the building, Blackwell borrowed $20,000,000 from Barney State Bank (BSB). The bank loan will be repaid over 20 years.
REQUIRED: (Round answers to the nearest thousand dollars.)
1. For this part only, assume that the loan interest rate is 8 percent, compounded annually. Assume that the loan will be repaid with equal payments at the end of each year. Calculate the annual payment that BHI will pay for the loan.
For parts 2 through 5, assume that the loan interest rate is 6 percent, compounded annually, and that the annual loan payment is $1,743,691 to be paid at the end of each year.
2. Calculate interest expense arising from the loan for the year ended December 31, 2011.
3. Calculate the book value of the loan on January 1, 2012.
4. Assume that BHI paid the loan each year as provided in the loan agreement. Calculate the total amount of interest expense recognized by BHI over the 20 year period from January 1, 2011 through December 31, 2030.
5. Assume that on January 1, 2016, BSB offered BHI the opportunity to repay the outstanding amount of the loan in exchange for a payment of $16,000,000. Calculate the gain or loss that BHI would recognize on the early repayment of the loan. (The loan has been outstanding for 5 years on this date.)
For parts 6 and 7, assume that the loan interest rate is 6 percent annually with semiannual compounding, that loan payments are to be made on June 30 and December 31 of each year, and that the semi-annual payment amount is $865,247.
6. Calculate interest expense arising from the loan for the year ended December 31, 2011.
7. Calculate the book value of the loan on January 1, 2012.
8. Assume that BHI depreciates the building using the straight-line method. Calculate the depreciation expense for the building for 2011.
|
Evaluate the mass percent of kcl in the solution
: A solution was prepared by dissolving 25.0 g of KCl in 225 g of water. Calculate the mass percent of KCl in the solution.
|
|
How fast is sarahs twist angular velocity
: Sarah's twist angular momentum increases from 0 to 50 kg*m^2/s in 0.25 s as she initiates a twisting jump on the ice. How fast is Sarah's twist angular velocity at the end of the 0.25 s
|
|
Explain what is the final temperature of the coffee
: At a local convenience store, you purchase a cup of coffee, but, at 98.4 degrees celsius, it is too hot to drink. You add 45.9 g of ice that is -2.2 degree celsius to 248 mL of the coffee. What is the final temperature of the coffee
|
|
Determine the apparent depth of the olive
: An olive is at the bottom of a glass of alcohol (n = 1.36), 6.51 cm beneath the surface. what is the apparent depth d' of the olive
|
|
Calculate the book value of the loan
: Assume that BHI depreciates the building using the straight-line method. Calculate the depreciation expense for the building for 2011.
|
|
Estimate how long is the arm of the centrifuge
: In a large centrifuge used for training pilots and astronauts, a small chamber is fixed at the end of a rigid arm that rotates in a horizontal circle. How long is the arm of the centrifuge
|
|
Evaluate the amounts of magnesium nitride
: a 21.496-g sample of Magnesium is burned in air to form Magnesium Oxide and magnesium nitride. When the products are treated with water, 2.813-g of ammonia gas are generated. Calculate the amounts of magnesium nitride and magnesium oxide formed.
|
|
Estimate the acceleration due to gravity
: Planets are not uniform inside. Normally, they are densest at the center and have decreasing density outward toward the surface. What is the acceleration due to gravity at the surface of this planet
|
|
Explain the standard na2s2o3 solution to be too high
: In preparing the sodium thiosulfate solution, the solid Na2S2O3x5H2O is not dried. Will this oversight cause the reported molar concentration of the standard Na2S2O3 solution to be too high, too low or unaffected? Explain.
|