Reference no: EM133123775
Questions -
Q1. On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on December 31, 2022. The bond has a coupon rate of 10% and a required rate of return of 12%. What is the value of the investment on January 1, 2020?
Q2. ABC Corporation invested in one of DEF's ordinary shares that has a par value of P500 and a market value of P625 on January 1, 2021. The 2020 dividend paid to each shareholder amounted to P120. The dividend rate is not expected to grow. what is the value if the required rate of return is 17%?
Q3. On March 15, year 1, ABC Corporation adopted a plan to accumulate P1,000,000 by September 1, year 5. ABC plans to make four equal annual deposits to a fund that will learn interest at 10% compounded annually. ABC made the first deposit on September 1, year 1. Future value and future amount factors are as follows: Future value of P1 at 10% for 4 periods (1.46), Future amount of ordinary annuity of P1 t 10% for four periods (4.64), Future amount of annuity in advance of P1 at 10% for four periods (5.11). What amount of four annual deposits shall be made?
Q4. On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-interest bearing note requiring ten annual payments of P10,000. DEF made the first payment on December 30, Year 1. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows: For 9 periods, the present value of P1 at 8% is 0.50 while the present value of ordinary annuity of P1 at 8% is 6.25. Meanwhile, for 10 periods, the present value of P1 at 8% is 0.46 and the present value of ordinary annuity of P1 at 8% is 6.71. In its December 31, Year 1 balance sheet, what amount should ABC Corporation report as note receivable?
Q5. What would be the value of P1,000,000 3 years from now if it would be invested at a return of 12% per annum?
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