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aleksklad [387]
3 years ago
11

P7-47. Interpreting Debt Footnotes on Interest Rates and Interest Expense. Boston Scientific discloses the following as part of

its long-term debt footnote in its December 31, 2018 10-K. Borrowings and Credits Agreements As of December 31, In millions, except interest rates Issuance Date Maturity Date 2018 2017 Semi-annual coupon rate January 2020 Note ............. Dec. 2009 Jan. 2020 $850 $850 6.000% May 2020 Notes May. 2015 May. 2020 $600 $600 2.850% May 2020 Notes May. 2015 May. 2022 $500 $500 3.375% October 2023 Notes Aug. 2013 Oct. 2023 $450 $450 4.125% May 2025 Notes May. 2015 May. 2025 $750 $750 3.850% March 2028 Noes Feb. 2018 March. 2026 $1,000 $- 4.000% November 2035 Notes(1) Nov. 2005 Nov. 2035 $350 $350 7.000% January 2040 Notes Dec. 2009 Jan. 2040 $300 $300 7.375% Unamortized debt insurance discount and deferred finance cost 2020-2040 $(29) $(24) Unamortized gain on fair value hedge 2020-2025 $26 $38 Capital lease obligation Various $6 $1 Long term debt $4,803 $3,815 (1) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to extent that our lowest credit rating is above BBB- OR Baa3. The interest rates on our November 2035 notes will be permanently re-instated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. Boston Scientific discloses its required principal debt repayments due during each of the next five years (In millions) 2019 $2,248 2020 $1,540 2021 $- 2022 $500 2023 $450 Thereafter $2,400 Boston Scientific also discloses the following information. Interest Expense The following table provides a summary of our interest expense and average borrowing rate: Year Ended December 31 (in millions) 2018 2017 2016 Interest expense $(241) $(229) $(233) Weighted average borrowing rate 3.6% 3.8% 4.0% Cash paid for interest $(262.00) $(235.00) $(233.00) The price of the Boston Scientific's bonds in February 2019 follows. Maturity date Coupon Current Price Current Yield Moody's Rating(02/21/2019) 2028 4.00% 109.35 $2.80 Baa2 2023 4.13% 101.57 2.41% Baa2 REQUIRED a. What amount of Boston Scientific's long-term debt is due in 2019? b. What is the total amount of Boston Scientific's long-term debt at December 31, 2018, including the current maturities? c. The company's balance sheet reports short term debt including current liabilities of $2,253 million and $1,801 millinon in 2018 and 2017, respectively. Compute the average effective interest rate on the company's total debt for fiscal 2018. Compare this to the average interest rate the company reports. d. Explain how the amount of cash paid for interest can differ from the amount of interest expense recorded in the income statement. e. The 1,000 million 4.00% note due in 2028 is priced at 109.35 (109.35% of face value, or or $1093.50 million) as of early 2019, resulting in a current yield of 2.8%. Adssuming that the company's credit rating has not changed since the bond was issued, what does the pricing of thie 4.00% bond imply about interest rate changes since Boston Scientific issued the bond? f. Compare the bonds that mature in 2023 and 2028. Explain why the bond with the higher coupon rate (4.125%) has the lower yield (2.41%).
Business
1 answer:
Zigmanuir [339]3 years ago
7 0
To go if do he go he do he do he do he
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A homeseller wants to net $75,000. The commission is 9%, the loan payoff is $450,000, and closing costs are $36,000. What must t
gregori [183]

Answer:

The home must sell for $616,500 to be able to settle all costs

Explanation:

The net to the formula can be used to ascertain the price of the property , the formula is given below:

Net amount=Sales price*(100%-commission rate)

The net to the seller in this case is the amount that seller would receive and be able to settle mortgage and closing costs and still be left with $75000

Net amount =$75000+$450000+$36000

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commission rate is 9%

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$561000=sales price*91%

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6 0
3 years ago
Many of the recommendations as team leader to increase your team's productivity will likely result in significant change to the
Pachacha [2.7K]

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Being a team leader is a huge responsibility towards the organization and team members as well. Changes in an organization are common but few people or team members are not able to accept the change and productivity decreases, so being a team leader following steps can be adopted to raise their urgency levels:

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3 0
3 years ago
Prior to the write off of a $500 customer account, Athena Company had the following account balances: Accounts receivable $19,60
Effectus [21]

Answer:

Net accounts receivable Before $18,600 and  After $18,600

Explanation:

solution

we know that here

net accounts receivable before write-off  

Accounts Receivable = $19,600  

and Allowance for doubtful debt = $1,000

so Net accounts receivable =  $19,600 - $1,000 =  $18,600

so

Journal Entry for write off is here    

Allowance for doubtful Accounts = $500

Accounts Receivable = $500

and

Net accounts receivable after write off is    

Accounts Receivable= $19,100

and

Allowance for doubtful debt= $500  

so Net accounts receivable = $19,100 - $500

Net accounts receivable = 8,600

so Net accounts receivable Before $18,600 and  After $18,600

6 0
3 years ago
Creative Canopies (CC) is a manufacturer of flexible canopies for athletic facilities. CC has contracts with 3 universities to i
ElenaW [278]

Answer:

Creative Canopies (CC)

With gross profits of $10,000, the least profitable is:

B. UCLA

Explanation:

a) Maintenance Costs of Canopies:

Support Activity      Driver                    Cost per Driver Unit

Major refinishes:    Hours on jobs                 $55

Minor touchups:     Number of visits          $400

Communication:     Number of calls             $25

b) Customer Data:

University    Hours      major Visits    minor Calls=

USD             100               7                     12

USC              90               5                     15

UCLA           120              6                      9

c) Calculation of the Cost of Canopy Maintenance for each customer:

University  Hours  Major   Minor  Major          Minor     Commun-  Total

                              Visits   Calls    Refinishes  Touchups  ication  

USD           100         7         12       $5,500        $2,800      $300    $8,600  

USC            90         5         15       $4,950        $2,000      $375    $7,325

UCLA         120        6          9      $6,600        $2,400      $225    $9,225

d) Calculation of net income from each customer:

University   Gross Profit         Maintenance Cost        Net Income

USD               $10,000                 $8,600                          $1,600

USC               $10,000                 $7,325                         $2,675

UCLA            $10,000                 $9,225                            $775

8 0
2 years ago
Holton Company has the following equivalent units for July: materials 20,000 and conversion 18,000. Production cost data are:
miskamm [114]

Answer:

$3.55; $3.13

Explanation:

Calculation to determine what The unit production costs for July are:

Using this formula

Unit product cost = (Beginning work in progress + Cost added) / Number of units

MATERIALS

Unit product cost=($8000+$63,000) / 20,000 units

Unit product cost=$71,000/20,000

Unit product cost=$3.55

CONVERSION

Unit product cost = ($3750+$52500) / 18,000

Unit product cost=$56,250/18,000

Unit product cost=$3.125

Unit product cost=$3.13 (Approximately)

Therefore The unit production costs for July are:$3.55; $3.13

6 0
2 years ago
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