Reference no: EM13809773
1) Red Corp issues $1,000,000, 8% five year bonds with interest paid semiannually. The current market rate of interest is 10%.
• Required:
Compute the price of the bond
Compute the discount/premium
Record the issuance of the bonds
Record the first interest payment including straight line amortization.
After 2 years, the company redeems the bonds at $1,040,000. Record the transaction.
2) ABC Corporation uses the indirect method to prepare its statement of cash flows. Data related to cash activities for last year is as follows:
Net income $92,500
Dividends paid (cash) $50,100
Depreciation expense $14,000
Net decrease in current assets $21,700
Issued new notes payable for cash $41,700
Paid cash for building $271,000
Net decrease in current liabilities $5,700
Sold investment for cash $400,000
1) What was the net cash flow from operating activities for the year?
2) What was the cash flow from (or used for) investing activities for the year?
3) What was the cash flow from (or used for) financing activities for the year?
4) What was the net change in cash for the year?
5) If the beginning balance of cash for the year was $158,000, what was the balance of cash at the end of the year?
|
Recently incorporated manufacturer of octagonal solar panels
: Panel del Sol Inc. (PdS) is a recently incorporated manufacturer of octagonal solar panels. The company has yet to reach profitability due to both the unsightly appearance of its solar panels and the ability of its Chilean competitors to produce an i..
|
|
Innovative new bond that referred to as biennial bond
: Ablemarle Energy recently raises (borrowed) $50 million by issuing an innovative new bond that is being referred to as a “Biennial” bond. The Biennial bonds, which have a par value of $1000, make an interest payment of $100 once every two years in pe..
|
|
Sales and earnings for emovies are expected to grow rapidly
: Sales and earnings for eMovies are expected to grow rapidly over the next 5 years. Although the firm is currently losing money, eMovies expects to begin paying out 60% of earnings during the fiscal year ending in June of 20/20, with initial sharehold..
|
|
Determine the yield to maturity for a risk-free zero coupon
: The (zero coupon) U.S. treasury strip maturing in one year is selling at an annual yield to maturity of 1.20 percent, which is equivalent to a price of 98.814 percent of its $1000 par value. determine the yield to maturity for a risk-free zero coupon..
|
|
What was the net cash flow from operating activities
: Red Corp issues $1,000,000, 8% five year bonds with interest paid semiannually. The current market rate of interest is 10%. Compute the price of the bond. Compute the discount/premium. Record the issuance of the bonds. What was the net cash flow from..
|
|
Retirement fund-amount of his monthly end-of-month payments
: A man plans to work for 25 years and to make deposits into a retirement fund at the amount of 100 at the end of year month. The fund earns 6% nominal, converted monthly. The fund will be used to purchase a 20- year annuity-certain in retirement. Assu..
|
|
Two brokers at morgan stanley
: Two brokers at Morgan Stanley: Bob and Simon are comparing their performance last year. Bob averaged a 19% rate of return on his portfolio, while Simon averaged a 16% rate of return. The beta for Bob’s portfolio is 1.5 while the beta for Simon’s port..
|
|
Devised defenses that make it much more costly
: Many firms have devised defenses that make it much more costly or difficult for other firms to take them over. How might such takeover defenses affect the firm's agency problems? Are managers of firms with formidable takeover defenses more or less li..
|
|
Reaction to announcements of massive layoffs
: Critically evaluate the following statement: “In recent years, it has been common for companies to experience significant stock price changes in reaction to announcements of massive layoffs. Critics charge that such events encourage companies to fire..
|