The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NYW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called. What will the after-tax annual interest savings for NYW be if the refunding takes place?
The business required £30,000 cash for working capital. The company gets a loan of £450,000 which was transfer into the business bank account in January as shown in appendix 6. The cash budget shows a balance of £3,918 in January and £16,335 February. The loan calculation is shown in appendix 8. This is expected to be paid back within 8 years by monthly paid instalments of £5.718.41 which was calculated on a 5.1% interest rate.
Question: : (TCO D) A company issues $5,000,000, 7.8/%, 20-year bonds to yield 8% on January 1, 2010. Interest is paid on December 31. The proceeds from the bonds are $4,901,036. Using effective-interest amortization, how much interest expense will be recognized in 2010? 15.
After that time, the truck (with an expected life of eight years) will be returned to the lessor. Ace has an incremental borrowing rate of 6 percent. The lessor has an implicit annual interest rate of 8 percent built into the contract. Ace is aware of this implicit rate. The present value of a four-year annuity due of $10,000 at a 6 percent annual rate is $36,700.
If the lease contract gives Royal the option to buy the machine at the end of four years, then both parties must report the transaction as a capital lease 28. Danville Corporation buys a truck for $52,000 and leases it to Viceroy for 8 years. At the end of that time, Viceroy can buy the truck for $7,000 in cash. Which of the following is not true? 1.
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.
During the year, the purchaser paid Damien $30,000 principal and $72,000 interest on the note and paid $6,000 principal and $18,000 interest on the mortgage he assumed. The contract price for the above transaction is what amount? Question 7. (TCOs 3, 4, 5, & 7) Which of the following is not an itemized deduction allowed for AMT purposes? Question 8.
Prepare a partial income statement for Stacy beginning with income before income taxes. The corporation had 4,954,000 shares of common stock outstanding during 2014. Brief Exercise 4-7 Your answer is correct. Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2014, Vandross decides to increase its estimate to 2%.
You are to receive $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?-PV $1 As the interest rate increases, the present value of an amount to be received at the end of afixed period-decreases. As the time period until receipt increases, the present value of an amount at a fixed interest Rate - decreases A home buyer signed a 20-year, 8% mortgage for $72,500. How much should the annual loan payments be?
[4] Fifth edition of RWJR, #4.5, page 93 Further question: (d) If Ms. Fawn wishes to consume the same quantity in each period, should she borrow or lend in the current period? By how much? 2. A capital investment project is expected to produce an after-tax net cash flow of $1,200 in one year. After-tax net cash flows are then expected to grow at a rate of 4% per year for 7 years, ending 8 years from today.