Clabber Company has bonds outstanding with a par value of $123,000 and a carrying value of $111,100. If the company calls these bonds at a price of $106,500, the gain or loss on retirement is:

Answers

Answer 1

Answer:

The gain on retirement = $4,600

Explanation:

The gain or loss on retirement = Carrying Value of the Bonds -  Call price of the Bonds

The gain or loss on retirement = $111,100 -  $106,500

The gain on retirement = $4,600

Note: Par value will not be taken for the calculation of the above


Related Questions

Suppose the interest rate on your car loan is 19.00% and the inflation rate is 18.00%. Calculate the real interest rate

Answers

Answer:

1%

Explanation:

The real interest rate is the interest rate adjusted for inflation. It is the rate after accounting for inflation. The real interest rate is the difference between the inflation rate from the quoted(nominal )interest rate.

real interest rate = quoted interest rate - inflation rate

=19% - 18%

=1%

Rouge Company’s $250,000 net income for the quarter ended September 30 included the following after-tax items:A $20,000 cumulative effect loss resulting from a change in inventory valuation method made on September 1.$0 of the $60,000 annual property taxes paid on February 1.For the quarter ended September 30, the amount of net income that Rouge should report is:_______.a. $235,000.b. $250,000.c. $255,000.d. $270,000.

Answers

Answer:

c. $255,000

Explanation:

Rouge should report the following income for this quarter = $250,000 (net income) + $20,000 (cumulative effect loss) - $15,000 (25% of annual property taxes) = $255,000

Cumulative effects on inventory valuation occur when overstate or understate your inventory levels, which directly affects cost of goods sold and overall profits.

Suppose a project will provide an immediate cash inflow of $10,000. For each of the next 15 years it will generate a negative cash flow of $1,000. What is the project's IRR, and is the project worth undertaking if its opportunity cost is 8%?

Answers

Answer:

- the project's IRR is 5.56%.

- the project is not worth undertaking because the IRR is lower than the cost of capital of 8%.

Explanation:

Calculation of IRR of Project using a Financial Calculator :

$10,000    CFj

($1,000)         CFj

15                  Shift Nj

Shift IRR/YR 5.56%

We should always accept project that have an Internal rate of return higher than the Cost of Capital.

In our case, the IRR is lower than the opportunity cost of 8%, therefore the project is not worth undertaking.

A relevant cost is:_______.
a. the foregone benefit of choosing to do one thing instead of another.
b. a cost that differs across decision alternatives.
c. a cost that has already been incurred.
d. a cost that is the same regardless of the alternative the manager chooses.

Answers

Answer:

b. A cost that differs across decision alternatives.

Explanation:

When managers make business decisions, some costs are incurred when such decisions are made. They are called relevant cost. The main purpose of relevant cost is to avoid duplication of data that are not necessary, which could further make business decisions complicated.

Example of relevant cost is when a business or an organization checks whether or not to sell a business unit. The cost incurred in such decision is called relevant cost.

Stoneheart Group is expected to pay a dividend of $3.15 next year. The company's dividend growth rate is expected to be 4 percent indefinitely and investors require a return of 11.6 percent on the company's stock. What is the stock price?

Answers

Answer:

P0 = $41.44736842 rounded off to $41.45

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1 / (r - g)

Where,

D1 is dividend expected for the next period /yearg is the growth rate r is the required rate of return  

P0 = 3.15 / (0.116 - 0.04)

P0 = $41.44736842 rounded off to $41.45

How much can be accumulated for retirement if $2,000 is put aside at the end of each of the next 40 years

Answers

Answer:

the last part of the question is missing:

Assume that you can earn 9% a year on your savings.

you need to determine the future value of an ordinary annuity:

future value = annual contribution x FV annuity factor

annual contribution = $2,000FV annuity factor, 9%, 40 periods = 337.882

future value = $2,000 x 337.882 = $675,764

How much would you pay for a share of preferred stock that pays a $3.75 dividend and your required return is 5.25%

Answers

Answer:

$71.43 per share

Explanation:

Price to pay (Present value) = Annual Dividend / Required return

Price to pay (Present value) = $3.75 / 0.0525

Price to pay (Present value) = 71.42857142857143

Price to pay (Present value) = $71.43 per share

How can parties that have unequal bargaining power negotiate meaningfully,
without one party taking advantage of the other?

Answers

Answer:

Through Collaborative bargaining

Explanation:

Parties that have an unequal bargaining power can negotiate meaningfully, without one party taking advantage of the other through the method known as collaborative bargaining. In collaborative bargaining, both the involved parties listen to each other’s claims and issues and then collaborate to come to a consensus. There is transparency in the overall bargaining process and hence there is very less probability that one party is taking advantage of the other party.

1. Problems and Applications Q1 In 2012, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 142,496,000 were employed, 12,506,000 were unemployed, and 88,310,000 were not in the labor force. What is the adult population

Answers

Answer:

the adult population is 243,312,000

Explanation:

The computation of the adult population is shown below:

The Total adult population is

= Employed + Unemployed +  Not in the labor force

= 142,496,000 + 12,506,000  + 88,310,000

= 243,312,000

Hence, the adult population is 243,312,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

1. Research is
a. A systematic methodological process to answer a question
b. A process of data collection to formulate a report
c. An experimentation to construct a hypothesis

Answers

Answer:

I think a. a systematic

The only business that is directly protected by the U.S. Constitution (in the First Amendment) is:_______

a. interest group lobbying.
b. health care.
c. polling.
d. the press (the news media).
e. software development.

Answers

Answer:

d. the press (the news media).

Explanation:

The only business protected by the First Amendment is the press (the news media). The other aspects protected by the First Amendments are human rights and not a business. The press is protected because they serve as countrywide investigators to uncover the truth and inform the people, this also includes the truth of any government actions, scandals, or secrets being held from the public eye. This is because in a democracy the government is accountable for the people and not the other way around.

If the Fed has an interest-rate target, meaning they want to control the interest rate at a specific rate such as 4%, why will an increase in the demand for reserves lead to a rise in the money supply?

Answers

Answer:

A rise in demand for reserves will shift the demand for reserves curve to the right which will cause a rise in interest rates. The Fed will then have to act to reduce this interest rate because they would prefer that it remained at the specific rate as mentioned.

To do this they will embark on Open Market Operations aimed at increasing money supply as this will reduce interest rates by increasing the supply of reserves because it will shift the supply curve for reserves to the right. The new equilibrium will be a lower interest rate.

The relevant Open Market Operation will be the buying of bonds from the public.

The main reason most international transactions require full payment before the buyer receives the merchandise is:_____.
a. strict government regulations.
b. an underlying lack of trust. an excess of factor endowments.
c. to trigger lower tariffs.
d. the inability to charge interest on the cost of goods.

Answers

Answer: b. an underlying lack of trust.

Explanation:

When dealing with an international customer, there is no guarantee that the customer will pay you if they receive their merchandise first and if this should happen, getting the person to pay you can be quite cumbersome and expensive.

It is therefore better that the customer sends the full payment first because money has a better chance of being retrieved than goods that are delivered. Using payment websites like PayPal for instance ensure buyer protection so money can be retrieved if goods are not sent. If the reverse were true however, this would be more difficult.

So yes, there is an underlying lack of trust.

Note: An excess of factor endowments is a separate option.

People do things for different reasons. The main reason most international transactions require full paymentbefore the buyer receives the merchandise is an underlying lack of trust.

If there is lacks of trust in business transactions, it allows a lot of harmful thoughts, actions, or emotions.

The lack of trust has lead to hopelessness, depression and possibly consider harming themselves.

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Why does the adoption of new technology tend to increase supply?

Answers

Answer:

New technology allows firms to produce at a lower cost. As a result, as firms adopt a new technology, their cost curves shift downward. Market supply increases, and the market supply curve shifts rightward. With a given demand, the quantity produced increases and the price falls.

The term _____ refers to a private piece of a company's Internet network that is made available to customers and/or vendor partners on the basis of secured access by unique password.v

Answers

Answer:

intranet

Explanation:

The term that is being described in this question is known as the company's intranet. This network is mainly used in order for the company's public tools and information to be accessed by anyone that may need it and has been giving access to it. This facilitates many different aspects and partnerships for the company, as those who have access can quickly and easily grab and use what they need off of the network to easily get things done and solve problems without needing direct involvement from the company.

1.Provide definitions of throughput, inventory and operational expense given in The Goal. How do they compare with traditional definitions

Answers

Answer:

The Goal:

This involves increasing net profit and as this is done, return on investment is increased and cash flow is also increased.

Throughput can be defined as the rate by which money is being generated by the system through sales.

Inventory is all amount of money that is currently in the system. It is all the amount of money that has been invested in buying things which the system has intentions of selling.

Operational expense is all amount of money that has been spent by the system in trying to turn inventory into throughput.

Compared to traditional definitions they are almost basically with the same meaning.

According to the rational-actor model, as the benefits of an activity rise a. we should observe fewer people undertaking the activity, because when benefits rise, costs usually rise by more. b. we should observe more people undertaking the activity. c. it is hard to predict how people will react, because some people are often irrational. d. the costs will rise too. e. none of the above

Answers

Answer: b.we should observe more people undertaking the activity

Explanation:

The rational actor model follows the theory of rational choice which believes that the behavior of individual actors make up the social behavior on the society and that the individual actors are all making their own individual decisions.

It should be noted that when there's an increase in the benefits of an activity, this will lead to more people enjoying the benefit as there will be more players.

Therefore, the correct option is B

The four people below have the following investments. Invested Amount Interest Rate Compounding Jerry $ 11,400 12 % Quarterly Elaine 14,400 6 Semiannually George 21,400 8 Annually Kramer 17,400 10 Annually Required: 1-a. Calculate the future value at the end of five years

Answers

Answer:

Jerry

$20,589.67

Elaine

$19,352.40

George

$31,443.62

Kramer

$28,022.87

Explanation:

Use following formula to calculate the future value

FV = PV ( 1 + r )^n

Where

PV  = Present value = Investment

FV = Future value = ?

r = interest rate per compounding period

n= numbers of compounding periods

Jerry

PV = $11,400

r = 12% x 3/12 = 3%

n = 5 years x 12/4 = 20 periods

Placing values in the formula

FV = $11,400 x ( 1 + 3% )^20

FV = $20,589.67

Elaine

PV = $14,400

r = 6% x 6/12 = 3%

n = 5 years x 12/6 = 10 periods

Placing values in the formula

FV = $14,400 x ( 1 + 3% )^10

FV = $19,352.40

George

PV = $21,400

r = 8%

n = 5 years

Placing values in the formula

FV = $21,400 x ( 1 + 8% )^5

FV = $31,443.62

Kramer

17,400 10 Annually

PV = $17,400

r = 10%

n = 5 years

Placing values in the formula

FV = $17,400 x ( 1 + 10% )^5

FV = $28,022.87

The future values of the investments are computed as follows:

              Invested Amount   Interest Rate    Compounding    Future Value

Jerry               $ 11,400             12%                Quarterly            $20,589.67

Elaine               14,400               6%                Semiannually     $19,352.40

George            21,400               8%                Annually             $31,443.62

Kramer             17,400             10%                 Annually            $28,022.87

Data and Calculations:

Jerry:

N (# of periods) = 20 (5 x 4)

I/Y (Interest per year) = 12%

PV (Present Value) = $11,400

PMT (Periodic Payment) = 0

Results

Future Value = $20,589.67

Total Interest $9,189.6

Elaine:

N (# of periods) = 10 (5 x 2)

I/Y (Interest per year) = 6%

PV (Present Value) = $14,400

PMT (Periodic Payment) = 0

 

Results

Future Value = $19,352.40

Total Interest = $4,952.40

George:

N (# of periods) = 5 years

I/Y (Interest per year) = 8%

PV (Present Value) = $21,400

PMT (Periodic Payment) = 0

Results

Future Value = $31,443.62

Total Interest = $10,043.62

Kramer:

N (# of periods) = 5 years

I/Y (Interest per year) = 10%

PV (Present Value) = $17,400

PMT (Periodic Payment) = 0

 

Results

Future Value = $28,022.87

Total Interest = $10,622.87

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CVS sells both manufacturer's brands and private brands. Explain why a store would do this.​

Answers

They make more of a profit when it comes to there own brands. With private brands they have to pay when people buy the private brands things. Think of it as renting a house yes your living in this house but you have to pay to live in it.

If a portfolio of the two assets has an expected return of 7 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Answers

Answer:

the beta of the portfolio is 0.562

Explanation:

The computation of the beta is shown below:

As we know that

Expected return of portfolio = return of stock × weightage of stock + return of risk free asset × weightage of risk free asset

7% = 11% × weightage of stock + 2.4% × (1 - weightage of stock)

weightage of stock = 0.535

Now Beta of portfolio is

= 1.05 × 0.535

= 0.562

hence, the beta of the portfolio is 0.562

If you own 100 shares of Air Line Inc. at $42.50, 250 shares of BuyRite at $53.25, and 350 shares of MotorCity at $7.75, what are the portfolio weights of each stock

Answers

Answer and Explanation:

The computation of the weights of portfolio of each stock is shown below:

But before that first we have to determine the total portfolio i.e.

= 100 shares × $42.50 + 250 shares × $53.25 + 350 shares × $7.75

= $20,275

Now the weightage of each stock are as follows

For air line inc

= 100 shares × $42.50 ÷ $20,275

= 0.2096

For Buyrite

= 250 shares × $53.25 ÷ $20,275

= 0.6566

For Motor city

= 350 shares × $7.75 ÷ $20,275

= 0.1338

In 2019, Waterway Industries sold 3000 units at $250 each. Variable expenses were $165 per unit, and fixed expenses were $780000. The same variable expenses per unit and fixed expenses are expected for 2020. If Waterway cuts selling price by 4%, what is Waterway's break-even point in units for 2020?
a) 9559
b) 9176.
c) 10000.
d) 10400.

Answers

Answer:

d) 10400.

Explanation:

The computation of the break even point in units is shown below:

Break even point in units is

= Fixed cost ÷ contribution margin per unit

= $780,000 ÷ ($250 × 96% - $165)

= $780,000 ÷ ($240 - $165)

= $780,000 ÷ $75

= 10,400 units

hence, the correct option is d. 10,400 units

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

A firm expects to pay dividends at the end of each of the next four years of $2.00, $1.50, $2.50, and $3.50. If growth is then expected to level off at 8 percent, and if you require a 14 percent rate of return, how much should you be willing to pay for this stock

Answers

Answer:

P0 = $43.96935449 rounded off to $43.97

Explanation:

Using the dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula to calculate the price of the stock today is,

P0 = D1 / (1+r)  +  D2 / (1+r)^2  +  ...  +  Dn / (1+r)^n  +  [(Dn * (1+g) / (r - g)) / (1+r)^n]

Where,

g is the constant growth rater is the required rate of return

P0 = 2 / (1+0.14)  +  1.5 / (1+0.14)^2  +  2.5 / (1+0.14)^3  +  3.5 / (1+0.14)^4  +  

[(3.5 * (1+0.08)  /  (0.14 - 0.08)) / (1+0.14)^4]

P0 = $43.96935449 rounded off to $43.97

The Aggie Company has EBIT of $50,000 and market value debt of $100,000 outstanding with a 9% coupon rate. The cost of equity for an all equity firm would be 14%. Aggie has a 35% corporate tax rate. Investors face a 20% tax rate on debt receipts and a 15% rate on equity. Determine the value of Aggie.
A) $120,000
B) $162,948
C) $258,537
D) $263,080
E) $332,143

Answers

Answer:

D) $263,080

Explanation:

Calculation to Determine the value

First step is to calculate the Unlevered firm amount

Unlevered firm = [$50,000 (.65)]/ .14

Unlevered firm= $232,142.86

Second Step is to calculate leverage tax shield value using this formula

Leverage tax shield value = [1 - ((1 - .35)(1 - .15)/1 - .20))]*$100,000

Leverage tax shield value = $30,937.50

Last step is to calculate the value

Using this formula

Total value=Unlevered firm+Leverage tax shield value

Let plug in the formula

Total Value = $232,142.86 + $30,937.50

Total Value = $263,080

Therefore the value will be $263,080

The process by which management plans, evaluates, and controls investments in fixed assets is called capital investment analysis.

a. True
b. False

Answers

Answer:

a. True

Explanation:

The process by which management plans, evaluates, and controls investments in fixed assets is called capital investment analysis. This process is also known as capital budgeting.

Generally, capital investment analysis or capital budgeting is used by business firms or governmental agencies to assess and measure the profitability of a long-term investment on a fixed asset such as real estate, machinery or factory equipments etc.

Hence, the management is able to choose the best option for investment after an assessment of which investment would yield a higher level of profits.

Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 2.00% per year. What is the real risk-free rate of return, r*

Answers

Answer:

Real risk-free rate of return = 5.00%

Explanation:

r* = T-Bill yield - IP

Real risk-free rate of return = T-bills currently yield - Inflation rate

Real risk-free rate of return = 7.00% - 2.00%

Real risk-free rate of return = 5.00%

4. You sold a futures contract for GBP10,000 at $1.50/GBP. Suppose that the futures price at settlement was $1.30. How much would be your payoff

Answers

Answer: $2,000

Explanation:

The Futures were sold at $1.50/GBP yet the settlement is $1.30/GBP. That means the premium is;

= 1.50 - 1.30

= $0.2/GBP

Payoff would be;

= 10,000 * 0.2

= $2,000

You are depositing $1,500 in a retirement account today and expect to earn an average return of 6.5 percent on this money. How much additional income will you earn if you leave the money invested for 50 years instead of just 40 years?

Answers

Answer:

$16,335.90622

Explanation:

The computation of the additional income earned is shown below:

For 40 years

Future value = Present value × (1 + rate of interest)^number of years

= $1,500 × (1 + 0.065)^40

= $18,624.1118

For 50 years

Future value = Present value × (1 + rate of interest)^number of years

= $1,500 × (1 + 0.065)^50

= $34,960.01802

Now the additional amount is

= $34,960.01802 - $18,624.1118

= $16,335.90622

Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 15%. What is the beta on a stock with an expected return of 17%

Answers

Answer:

im sorry

Explanation:

Use the following information to answer next three questions: IO PI IRR LIFEProject 1 $300,000 1.12 14.38% 15 yearsProject 2 $150,000 1.08 13.32% 6 yearsProject 3 $100,000 1.20 16.46% 3 yearsAssume that the cost of capital is 12%.If the firm has a maximum capital expenditures budget of $450,000, and if the projects are independent and mutually exclusive but not repeatable, which project(s) should be accepted?Projects 1 and 2Projects 1 and 3Projects 2 and 3Projects 1, 2, and 3Project 1

Answers

Answer:

Project 1

Explanation:

                    IO          PI    IRR       LIFE

Project 1 $300,000 1.12 14.38% 15 years

Project 2 $150,000 1.08 13.32% 6 years

Project 3 $100,000 1.20 16.46% 3 years

Assume that the cost of capital is 12%.

We should invest in  the projects that have the highest profitability index (PI) first.

PI = present value of project's cash flows / initial outlay

Projects with a high PI should also have high IRRs and this applies to this situation:

Project 3 has a PI of 1.2 and an IRR of 16.46%Project 1 has a PI of 1.12 and an IRR of 14.38%Project 2 has a PI of 1.08 and an IRR of 13.32%

If the protects weren't mutually exclusive and the company had enough money for the 3 of them, then it should invest in all of them. But that is not the case, here, since the company has to decide in which project it will invest (only 1 project). The first option should be project 3, but since it cannot be repeated, and its life is short, I would go for project 1.

Besides, it is the only possible answer since you have to choose only 1 project (remember projects are mutually exclusive).

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