The property price peaked in the early months of 2006. This was due to the high demand in housing, house flipping had just began to get popular, and the increase was coupled with a limited supply of properties on the market.
Answer:
Yes, Alaska should pay 1 billion new sol for the acquisition.
Maximum price = 1.616 billion new sol.
Explanation:
Asking price by Estoya = 1 billion new sol.
However, estimating the value of Estoya considering the cash flows in years 1 and 2 to Alaska is as follows.
Year 1 cash flow (figures in millions)
- Cash flow (which will grown by 5% yearly) = 500 * 1.05 = 525
- In USD (exchange rate in year 1 = $.29), 525 = 525 * $.29 = $152.25.
Year 2 cash flow (figures in millions)
- Cash flow = 525 * 1.05 = 551.25
- Resale value = 1,200 (i.e 1.2 billion)
- Total year 2 cash flow = 1,751.25
- In USD (exchange rate in year 2 = $.27), 1,751.25 = 1,751.25 * $.27 = $472.84.
Given a discount rate of 18%, the present value of the cash flows
=
= 129.03 + 339.59
= $468.62.
Therefore, the maximum amount Alaska Inc. should pay for the Company is the local currency equivalent of $468.62 in today's price
= 468.62/0.29
= 1.616 billion new sol.
Because this amount (the fair value) is higher that the 1 billion new sol the company intends to pay, Alaska should pay the 1 billion new sol.
Answer:
0.75163
Explanation:
So, we are given the following data or parameters or information which is going to help us in solving the question above;
=> Payment for the pension = $10,000 once a year for a 10-year period.
=> Time for the first payment = ''end of 6th year from now''.
=> Type of Pension plan for immunization = " 5-year zero-coupon bond and 20-year zero coupon bond to construct the immunization position''
=> Interest rate = 10%.
Therefore, the weight on the 5-year zero-coupon bond can be calculated as follows:
Duration = (Weight × 5) + [( 1 - weight) × 20].
=> 5b + 20 - 20b = 8.7255.
=> b = 0.75163.
Therefore, the weight on the 5-year zero-coupon bond is 0.75163.
The weight on the 20- year zero-coupon bond = 1 - 0.75163= 0.2884.
Answer:
The accounts receivable amount expected to be collected after the write-off entry was $390,500.
Explanation:
Account Receivable Balance = $423,000
Less: Allowance Account Balance = $32,500
New Account Receivable Balance = $390,500
Since the write off entry was not made and there is an account for allowance of uncollectible account so at that the entry was made as follows:
Debit: Account Receivable $32,500
Credit: Uncollectible account expense $32,500
To record uncollectible expense.
Since we are certain that $32,500 will not received and recorded as bad debt so we simply deduct this amount from account receivable balance to derive new balance as shown above.