Answer:
Sale of plant assets. If the company<u> sales an equipment it will receive cash </u>for it. We are not given with any information of this transaction not being in cash, so we should assume it was a sale in cash or cash equivalent.
Explanation:
<u>Conversion of bonds into common stock.</u> The bonds, which are outstanding and represent a promise to pay, are converted into common stock, this transaction doesn't involve cash.
<u>Issuance of common stock to purchase land. </u>The land is acquire in exchange of common stock, the company is not using cash. the owner of the land can later sold the stock to a third party but it won't affect the cash flow of the company.
<u>Issuance of debt to purchase equipment </u>Like singing a note to purchase a machine, no cash is involve.
Answer:
Effective annual rate = 6.82 %
Explanation:
given data
loan = 65 % of $2.5 million = $1625000
monthly payment pmt = $10,400
time = 30 year = 30 × 12 = 360
solution
we get here rate first by present value
present value = pmt × ..........1
$1625000 = $10400 ×
15.625 =
solve it we get
r = 0.5517%
and Effective annual rate will be
Effective annual rate =
Effective annual rate =
Effective annual rate = 0.068250
Effective annual rate = 6.82 %
Answer:
r = 10.5%
Explanation:
Using Dividend growth model, we have the following equation:
P = D(1) / r - g
P: Stock price ($40)
D(1): Year end dividend ($3)
g: Dividend growth rate (3%)
r: required rate of return (Missing value)
By inputting numbers into the equation, we have:
40 = 3 / r - 0.03
--> r = 10.5%
Answer:
Transfer price= $37
Explanation:
Giving the following information:
Its variable cost per unit is $25, and its fixed cost per unit is $12. Top management of Kobe International would like the Heating Division to transfer 14,600 heating units to another division within the company for $30.
If the Heating division is not operating ar full capacity, the fixed costs shouldn´t be taken into account. <u>In this case, the Heating Division is operating at full capacity. The minimum transfer price must include both fixed and variable costs.</u>
Transfer price= fixed costs + variable cost
Transfer price= 12 + 25= $37