Answer:
In 2022, Cullumber should record interest expense of $57,057.80.
Explanation:
The interest expense can be calculated using the following formula:
Interest expense = (Present value of lease payments - Annual payments at the beginning of each year) * Effective interest rate .................... (1)
Where:
Annual payments at the beginning of each year = $180,000
Present value of lease payments = $750,578
Effective interest rate = 10%
Substituting the values into equation (1), we have:
Interest expense = ($750,578 - $180,000) * 10% = $57,057.80
Therefore, Cullumber should record interest expense of $57,057.80 in 2022.
Answer:
<em>Regional advertising</em>
Explanation:
Regional advertising <em>implies sponsor-paid advertising that supplies goods or services regionally across two or more regions</em>.
Examples might include using specific location billboards to provide some of the simplest ways to reach local communities.
Answer: SEE EXPLANATION
Explanation:
Given the following ;
Values depending on Success
$150M, $135M, $95M, $80M
Risk free rate = 5% = 0.05
Pervebtage to be lost in case of bankruptcy = 25% = 0.25
A.) 0.25 × [( 150 + 135 + 95 + 80) ÷ 1.05] = $109.52 million
Assume a zero-coupon debt with a $100million face value
B.) 0.25 × [( 100 + 100 + (95×0.75) + (80×0.75)) ÷ 1.05] = $78.87 million
C.) Yield to maturity (YTM)
(100M÷78.87M) - 1
1.2679 - 1 = 0.2679 = 26.79%
Expected return = 5%
D.) Equity value
0.25 × [( 150 + 135 + (95×0.75) + (80×0.75)) ÷ 1.05] = $99.11 million
E.) share if no debt is issued
109.52 ÷ 10 = 10.95 per share
F.) Share price if debt of $100M is issued
99.11 ÷ 10 = 9.91 per share
The price differs because bankruptcy cost will Lower the share price.
