Reference no: EM131023120
Granfield Company has a piece of manufacturing equipment with a book value of $35,500 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $21,100. Granfield can purchase a new machine for $111,000 and receive $21,100 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $18,100 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:
$17,500 increase
$72,400 decrease
$14,400 decrease
$48,850 increase
$17,500 decrease
|
According to the constant perpetual growth model
: Trust Bankers just paid an annual dividend of $1.9 per share. The expected dividend growth rate is 6.1 percent, the discount rate is 12 percent, and the dividends will last for 18 more years. What is the value of the stock? A share of stock just paid..
|
|
Managerial positions execute strategies and best practices
: Managerial positions execute strategies and best practices on the job in an effort to ensure the annual auditor's report is unqualified. identify the elements in an auditor's report that are needed for an organization in the United States. How does a..
|
|
Research equipment and certain special tools
: In your new position as head accountant (so OK – you’re the only accountant but it will sound better on your resume) working for Mr. Moore, you note that last month on July 2, 2013, they bought “research equipment and certain special tools” for $60,0..
|
|
Yield to maturity and yield to call
: Arnot International's bonds have a current market price of $1,200. The bonds have an 10% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (Call price = $1,090). Wha..
|
|
Granfield company has a piece of manufacturing equipment
: The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:$17,500 increase$72,400 decrease$14,400 decrease$48,850 increase$17,500 decrease
|
|
Yield to call-yield to maturity and market rates
: Absalom Motors's 8% coupon rate, semiannual payment, $1,000 par value bonds that mature in 10 years are callable 6 years from now at a price of $1,025. The bonds sell at a price of $1,254.87, and the yield curve is flat. Assuming that interest rates ..
|
|
Issued bonds-bond valuation with semiannual payments
: Renfro Rentals has issued bonds that have a 11% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 9%. What is the price of the bonds?
|
|
Fraudulently reported inflated earnings
: For several years, CSK Auto, Inc., fraudulently reported inflated earnings. During this period, Maynard Jenkins was a CEO. He was not involved in the fraud, however, and was never charged with a crime. Nonetheless, using a SOX provision, the SEC soug..
|
|
Salvage value for the manufacturing process is expected
: Minnesota Metal Forming Company has just invested $500,000 of fixed capital in a manufacturing process, which is estimated to generate an after-tax annual cash flow of $200,000 in each of the next 5 years. At the end of year 5, no further market for ..
|