Answer:
:(A) present value factors
Explanation:
Given that you need to have $35,000 on hand to buy a new Lexus five years from today. To achieve that goal, you want to know how much you must invest today in a certificate of deposit guaranteed to return you 3% per year.
i.e. we have to calculate how much to invest when we want to have 35000 dollars on hand after 5 years from today.
Rate is given as 3% per year.
So we have to find the present value factor
The formula used is if P is to be invested
P(1.03)^t = 35000 $ assuming compound interest.
So P = 35000 (1.03)^(-t)
Thus we are calculating present value factor
Answer is
:(A) present value factors
Answer:a The corporation can make a public issue of shares to obtain capital to make the purchase. ( B) The accountant will open a temporary account called the business purchase account and the vendor account to record the purchase
Explanation:
a. When a corporation want to purchase a existing business ,the purchase price may be paid either totally in cash or partly in cash and partly in shares or in some cases totally in shares. The method of payment is arranged between the corporation and the existing business. If the company makes a public issue of shares to raise funds for the purpose of acquisition of the business. A statement in the prospectus to issue the shares that the vendor will be paid either totally or partly in shares boost the investors confidence in the business because they see it as a sign that the vendor has faith in the future prospect of the business under the new ownership. The shares allotted as consideration for the purchase becomes part of the issued capital of the company.
b. The temporary account and the vendor account would include the following
1.Dr the business purchase account
Cr the vendor account
With the agreed purchase price,and the allotment of shares or debenture as part of the purchase price
2. Dr the asset, including Goodwill if any to their respective account,
Cr the total value of asset taken over in one amount to the business purchase account
3. Dr the total value of liabilities taken over in one amount to the business purchase account
Cr the liabilities to their respective account
4. Dr vendor account
Cr the corporation capital account both with the purchase price when paid
Answer:
The answer is D.
Explanation:
The demand curve faced by perfectly competitive firm is horizontal. This means that if individual firm charges price above the market price, it will not sell anything.
The curve is the same as marginal revenue curve because change in total revenue from selling one more unit(marginal revenue) is the constant market price.
And it holds in perfect market that price equals marginal revenue (P=MR).
The correct option is D.
Answer:
6.64%
Explanation:
The pretax cost of debt is the Yield to Maturity (YTM). Since the coupons are paid semiannually, adjust the duration and the coupon payment amount to semi-annual terms.
You can solve for the YTM using a financial calculator with the following inputs;
Maturity of the bond; N = 20*2 = 40
Face value ; FV = 1000
Semi-annual coupon payment ; PMT = (7%/2)*1000 = 35
Current price of the bond; PV = -1.04*1000 = -1040
Then compute the semiannual interest rate ; CPT I/Y = 3.318%
Therefore, pretax cost of debt; YTM = 3.318 *2 = 6.64%
Answer:
option 14.92%
Explanation:
Data provided in the question;
Expected annual dividend to be paid = $0.65
Expected growth rate = 9.50%
Walter’s stock currently trades = $12.00 per share
Now,
Expected rate of return = 
+ Growth rate
or
Expected rate of return = 
+ 9.50%
or
Expected rate of return = ( 0.054167 × 100% ) + 9.50%
or
Expected rate of return = 5.4167% + 9.50%
or
Expected rate of return = 14.9167 ≈ 14.92%
Hence, the correct answer is option 14.92%
