Both monies pooled together after taxes add together the sum of £1626.56. With outgoings at £1140 and £1625 pooled together there is a difference of £405 which split between the two girls would be a total of £202.50. Using the online household equivalence calculator this compensates Praveena’s loss of income by 37%. Case study 2 Casper is in the process of paying for his holiday which will cost him £2000, he is considering what to do? If Casper decided to take out a loan that charges 20% APR over one year for the amount of £2000 over 12 months he would expect to pay £183 per month for 12 months with interest of £205.
The employee is paid semi-monthly with an annual salary of $52,000. What should the employee’s wages be on the 9/30/12 payroll? (52,000/2080=$25, 86.67*80%=69.33hrs, $25*69.33=$1,733.33) 5. A FT-salaried employee making $60,000 per year receives a salary increase of $5,000 retroactive to 1/1/2012. The employee is paid on a semi-monthly basis.
Corporation FinanceBus 35200Case Study: Penelope | | 1. What is the NPV of the first generation phone project, ignoring both the possibility of investing in the second-generation project and the possibility of selling the equipment after two years? We calculate the NPV by adding the yearly future free cash flows of the project discounted at a rate equal to the cost of equity. We use the CAPM formula to calculate the cost of equity, assuming a risk free rate of 10%, a β of 1.2 and the market risk premium of 8%. We got a cost of equity of 20%.
Explain Problem 2: Sale-Leaseback Sangamon signs a sale-leaseback with a buyer, Bismark. Under the terms of the contract, Bismark will pay $146,874 in cash to Sangamon for equipment and then immediately lease it back to Sangamon. The equipment originally cost $100,000 and had a carrying value of $80,000 on Sangamon’s books immediately prior to the transaction. In 5 years, the residual value of the leased equipment is estimated to be $20,000 when the lease terminates. The lease contract obligates Sangamon to make five equal annual payments of $30,000 to Bismark that begin immediately after the sale.
Prepare the trial balance of Gordon Construction, Inc., at June 30, 20xx. * 4. The manager asks you how much in total resources the business has to work with and, how much it owes. Case Study 1 (Part B) Requirement 1 (Learning Objectives 3, 4: Adjust the accounts; construct the financial statements) Record the following month end adjusting entries for Gordon Construction, Inc. at June 30, 20xx Month end accruals at June 30, 20xx: * a. Accrued advertising revenue at June 30, $3,100.
Paid $1,200 down and the balance was placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1. Note: Use Accounts Payable for the Balance Due. July 8 Purchased landscaping supplies from Lakeside Company on credit, $780.
If Krell is expected to pay a dividend of $0.88 this year, and its stock price is expected to grow to $23.54 at the end of the year, what is Krell’s dividend yield and equity cost of capital? Answer: Dividend Yield = Dividend / Share price = 0.88/22 = 4% Capital Gain Rate = (End of year stock price – Share price today) / Share price today = (23.54 – 22) / 22 = 7% Total expected return (Equity cost of capital) = 4% + 7% = 11% 9-5 No Growth Company NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 15% per year? Answer: Assume: dividends are paid at the end of the year Stock pays a total of $2.00 in dividends per year. Valuing this dividend as a perpetuity: P = $2.00 / 0.15 = $13.33 9-6 Value of Operations of Constant Growth Summit Systems will pay a dividend of $1.50 this year.
When taxes are considered, the effective costs are affected by interest paid and the amortization of points on the loan. This analysis will require you to compare only before-tax costs. Bloomberg.com provides a mortgage calculator that allows you to compare the effective costs on alternative mortgages. You are considering three alternatives for a $250,000 mortgage. Assume that the mortgage will start in December, 2002.
Timothy agrees to pay monthly instalments of R450. The agreement of the loan allows Timothy to start paying these equal monthly instalments from 1 August 2010. 7.2.1 Calculate the total amount owing to the financial institution on 1 July 2010. (2) 7.2.2 How many months will it take Timothy to pay back the loan? (4) 7.2.3 What is the balance of the loan immediately after Timothy has made the 25th payment?
The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $25,000 that had cost $14,000 to make. Required Explain how these events would affect the balance sheet, income statement, and statement of cash flows by recording them in a horizontal financial statements model as indicated here.