The term ______ describes circumstances where a country's exports exceed it imports.

Avicorp has a $15.5 million debt issue outstanding, with a 6.3% coupon rate. The debt has semi-annual coupons, the next coupon i

Studentka2010 [4]

Answer:

a) Pre-tax cost of debt is 8.45%

b) After tax cost of debt is 5.07%

Explanation:

a) Given:

Debt issue outstanding = $15.5 million

Semi-annual coupon rate = 0.063 / 2 = 0.0315

Assumed par value (FV) = $1,000

Coupon payment (pmt) = 0.0315 × 1000 = $31.5

Current bond price (PV) = 92% of $1,000 = $920

Time period (nper) = 5 × 2 = 10 periods

Calculate semi-annual rate using spreadsheet function =Rate(nper,pmt,PV,FV)

Semi-annual rate = 4.14%

Pmt and FV are negative as they are cash outflows.

YTM = 4.14 × 2 = 8.28%

Effective annual rate = $(1+\frac{Rate}{compounding\ periods}) ^{2} -1$

= $(1+\frac{0.0828}{2}) ^{2} -1$

= 0.0845 or 8.45%

b) Tax rate is 40%

After tax cost of debt = Pre tax cost of debt × (1 - 0.4)

= 0.0845 × 0.6

= 0.0507 or 5.07%

4 0

3 years ago

(a) Dell Computers is a leader in the computer industry with over $ 59 billion in sales each year. A recent annual report for De

sp2606 [1]

1. Warranty Expense a/c……………..Dr $501,100,000

To warranty payable a/c…………….$501,100,000

(Warranty expense incurred)

Warranty Payable a/c………………Dr $415,000,000

To Cash a/c…………………………..$415,000,000

(Warranty Expense paid by cash)

2. Cash a/c………………………Dr $90,900,000

To Unearned revenue a/c………$90,900,000

(Recognize the receipt of cash)

Unearned revenue a/c…………..Dr $80,050,000 ($90,900,000 - $2,850,000)

To Revenue a/c……………………$80,050,000

(Recognized as revenue)

Warranty liability is a legal responsibility account in which a company records the amount of the repair or replacement cost that it expects to incur for products already shipped or services already provided. This can be an extensive liability for more complicated products subject to breakage.

Accrue the warranty expense with a debit to the warranty price account and a credit to the warranty liability account. As actual warranty claims are received, debit the warranty liability account and credit the stock account for the cost of the replacement parts and products sent to customers.

learn more about liability here brainly.com/question/25687338

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6 0

1 year ago

Ryan’s shoe store sells a variety of shoes. his “active shoes” campaign is reaching the daily budget cap by the early afternoon.

irina1246 [14]

What should Ryan do in order to get more traffic for his products is to increase the budget cap of the campaign, this will have a benefit towards their goal because if there is enough budget cap, they may gain advantages in terms of having their products to be as much and to be sold to wide variety of consumers, increasing order for their product.

8 0

3 years ago

During october, alameda company had $102,500 of cash receipts and $103,150 of cash disbursements. the october 31 cash balance wa

Mkey [24]

The Alameda co had income of $102,500 in October and disbursements of $103,500 also during October. The difference is 103,500-102500= -$650. So if at Oct. 31 the cash balance was $18,600, at Sept. 30th the cash balance would have to be $18,600+$650=$19,250.

8 0

3 years ago

In 2005, Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up nat

jarptica [38.1K]

Answer:

<h2>In this case,the correct answer would be option B) in the answer choices or shift the short-run aggregate supply curve to the right.</h2>

Explanation:

The destruction of the oil and natural gas refinery capacity Gulf of Mexico during Hurricane Katrina would reduce the overall supply of oil which would decrease the short run aggregate supply in the economy.
This phenomenon can be illustrated by an initial shift of the aggregate supply curve to the left in the goods market in economy. Now, due to reduction in overall oil supply due to destruction of the refineries, the oil prices in the market would increase,everything else held constant.
As after three years,the oil refineries are restored properly, the overall oil supply would again increase in the market from its initial position following the refinery destruction after the hurricane,which would consequently lead to a rightward shift of the aggregate supply curve in short run in the goods market.

7 0

3 years ago