Again, note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return. If Dana’s state tax rate increases to 10%, corporate bonds are still superior to Treasury bonds. 50. [LO 1] At the beginning of his current tax year David invests $12,000 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $700 in interest ($350 every six months) from the Treasury bonds during the current
What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants? (Points : 4) $28,800 $33,600 $41,600 $40,000 3. (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010.
Each debenture can be converted into 25 shares of common stock at any time before 2019. What is the conversion value of the bond? Question 23 Warren Corporation’s stock sells for $42 per share. The company wants to sell some 20-year, annual interest, $1,000 par value bonds. Each bond would have 75 warrants attached to it, each exercisable into one share of stock at an exercise price of $47.
See below. Example Problems | Find the NPV for the following Capital Budgeting project. | Year | | Cash Flow | | 0 | $ | -10 | | 1 | $ | 5 | | 2 | $ | 2 | | 3 | $ | 2 | | 4 | $ | 2 | | 5 | $ | 2 | | Cost of Capital: | | 10 | % | NPV: | $ | 0.31 | | | (cost done in millions) (http://www.zenwealth.com/businessfinanceonline/CB/NetPresentValue.html) 7-21 NPVs and IRR's for Mutually Exclusive Projects You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity.
You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that. • a.
,Sarah L. G January 6, 2013 Written Assignment #1 1. A) $1,000 with 5% interest after 10 years gives you $1,628. Therefore, you would gain $628 in interest. B) If the interest is withdrawn each year, a total of $500 would be earned because the $1,000 investment would earn $50 of simple interest each year. C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years.
Under an income tax rate of 23 percent, you have to earn $130 to spend $100. Spend that same $100 under a sales tax, you pay that same tax of $30, and the rate is quoted as 30 percent.” (Fairtax.org
PROJECT APPRAISAL CASE STUDY UNITED METAL 0 1. Introduction United Metal manufactures a certain component with a machine it purchased over a year ago for $45,000 (the “Manufacturing Equipment”). To produce 100,000 items a year, United Metal incurs manufacturing costs of $50,000 and spends $40,000 further in raw material. It is expected that United Metal will need to produce this component at the same level for another 8 years. One of its suppliers, Amalgamated Components, has offered to produce said component for 83p per piece.
This shows Targets improvement over time to pay its current liabilities based on available cash, short term investments, and receivables. Some items that may have impacted the quick ratio were a major increase in cash & equivalents as well as a generous increase in receivables from 2007 to 2008. Target’s quick ratio was higher than Wal-Mart’s quick ratio. This is an important comparison as Target’s ratio was higher than Wal-Mart’s regardless of the fact that Wal-Mart is a larger company that has traditionally outperformed
The percentage is 100% for property placed in service after september 8, 2010 and before january 1, 2012. Under the american taxpayer relief act of 2012, 50% additional first-year depreciation may be taken on property placed in service in 2012 and