2. On January 1, 2007, Fire wire Company acquired 40 percent of Browser Company's common stock. For this acquisition, Fire wire paid $45,000 above book value. The full differential was attributed to equipment with a remaining life of ten years and zero salvage value at the date of acquisition. During 2007 and 2008, Browser reported net income of $90,000 and $50,000 and paid dividends of $40,000 and $60,000, respectively.
Since November, the stock has shown an increase through mid March 2012 where it reached the fifty-two week high of $32.95 per share. Intel Corporation- On March 30th 2012 at 7:16pm Intel Corporation’s (INTC) common stock price closed at $28.07 per share. Intel closed the previous day at $28.05 per share. Like Microsoft the stock decreased 0.05 from the previous day’s close. While reviewing Intel’s past twelve months, I have found similar findings to Microsoft’s.
How much will she have in December of 2007? (Assume that a deposit is made in 2007. Make sure to count the years carefully.) 8. Mr. Flint retired as president of the Color Tile Company but is currently on a consulting contract for $45,000 per year for the next 10 years.
The coupon reset formula is: 1-month LIBOR + 220 basis points. Therefore, if 1-month LIBOR on the coupon reset date is 2.8%, the coupon rate is reset for that period at 2.80% + 2.20% = 5.00%. 8. Answer the below questions. (a) What is meant by an amortizing security?
iii) For the onetime costs we do not have enough data to calculate the company wise expenses so, we discount it at a rate that seems reasonable. In this case which we have assumed to be the mean of the WACCs of the two entities. 3. Will synergy cash-flows allow the banks to increase their debt? Ans: Since, cost synergies will not change the book values of equities for the merged entity, but they will be transferred to the retained earnings which will increase the overall equity.
If the company wants to lower its income at the end of the accounting period, they would buy more inventory and the cost of that inventory could be used for cost of goods sold. This is done in order to pay less tax. One problem with LIFO is that it is not allowed under the IFRS. This can create a problem when comparing a U.S.
It originally cost $180,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15 years and have a zero salvage value. In 2010, the decision was made to shorten the total life of this asset to 9 years and to estimate the salvage value at $3,000 3. Depreciable asset C was purchased January 5, 2006. The asset's original cost was $160,000 and this amount was entirely expensed in 2006.
They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be • $3,760. • $4,072.
If it is compounded continuosly? Explain the results. Annual: PV = -2000, I/YR = 6; N = 10; solve for FV = $3581.70 Quarterly: I/YR = 6/4 = 1.5; N = 10*4 = 40; solve for FV = $3628.04 Continuously: -2000*(e**.06**10) = $3,644.24 FV increases with the number of compounding periods Question 1b What will be the total accumulated amount at the end of 10 years if in addition to the initial $2,000, you also deposit $4,000 in year 4 and $8,000 in year 8? Assume an annual 6% interest rate for all ten years. First cash flow: FV = 3581.70 (already done) Second cash flow: PV = -4000, N = 6, I/YR = 6, solve for FV = 5674.08 Third cash flow: PV = -8000, N=2, I/YR = 6; solve for FV = 8988.80 ANSWER: 3581.70+5674.08+8988.80 = $18,244.58 Question 1c Using the information from Question 1b, what will be the total accumulated value at the end of 10 years, if the interest rate is expected to be 6% for only the first three years, followed by 8% for the next five years, and 10% thereafter?