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You are the CFO of Diversi?ed Industries. Diversi?ed has suffered through 4 or 5 tough years. This has deteriorated its ? financial condition to the point that Diversi?ed is in danger of violating two loan covenants related to its largest loan, which is not due for 12 more years. The loan con-tract states that if Diversi?ed violates any of these covenants, the loan principal becomes immediately due and payable. Diversi?ed would be unable to make this payment, and any additional loans taken to repay this loan would likely be at higher rates, forcing Diversi?ed into bankruptcy. An investment banker suggests forming another entity (called ‘‘special purpose entities'' or SPE) and transferring some debt to this SPE. Structuring the SPE very carefully will have the effect of moving enough debt off Diversi?ed's balance sheet to keep the company in compliance with all its loan covenants. The investment banker assures you that accounting rules permit such accounting treatment. Required: How do you react to the investment banker?
The price stages are that at which sellers recruit securities to borrowers.
GOLD MOUNTAIN SKI RESORT CASE You work for a venture firm and have been asked to analyze a proposal from a group of investors interested in building a new ski area in Colorado. The
Q. Define Risk-adjusted discount rates? One technique in this heading is the assignment of investment projects to one of a set of risk classes all of which has a different disc
Changes in accounting estimates In preparing financial statements, it may be difficult to arrive at exact values for certain items to be presented in the financial statements and
tyoes of assets
Surviving Spouse - This is a person whose wife or husband died during tax year. A surviving spouse can file a JOINT RETURN for the year in which death occurred. Additionally a join
Camp Corp had the following balances in its stockholders'' equity at jan 1: Common stock, $2, par value, 450,000 shares issued $900,000 Additional pd in capial 1,200,000 Retained
Explain the term Reporting interval - Management accounting For most businesses, financial accounting reports are produced on an annual basis, though some large businesses prod
Calculation of Liquidity ratios Current Ratio and Acid-Test Ratio - 2008 2009 2010 A
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