1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
spayn [35]
3 years ago
6

QRM, Inc.'s marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. Aft

er $12 per bond flotation costs, new bonds will net the company $966 in proceeds. Determine the appropriate after-tax cost of new debt for the firm to use in a capital budgeting analysis.
Business
1 answer:
puteri [66]3 years ago
6 0

Answer:

4.87%

Explanation:

In this question , we are asked to calculate the appropriate after-tax cost of new debt for the firm to use in capital budgeting analysis.

PMT = 1000*7% = 70 (indicates the amount of interest payment)

Nper = 10 (indicates the period over which interest payments are made)

PV = 966 (indicates the present value)

FV = 1000 (indicates the future/face value)

Rate = ? (indicates the cost of debt)

After Tax Cost of Debt = Rate(Nper,PMT,PV,FV)*(1-Tax Rate) = Rate(10,70,-966,1000)*(1-.35) = 4.87%

You might be interested in
If the consumption of a good by one individual does not change the amount of the good available to others, the good is considere
Pepsi [2]

Answer:

A. nonrival-in-consumption is the correct answer.

Explanation:

3 0
3 years ago
We do not owe you anything at December 31, 2018, as the goods, represented by your invoice dated December 30, 2018, number 25050
dangina [55]
I don’t understand this please explain it differently please
5 0
1 year ago
Gwen, an independent consultant, traveled to New York City on a business trip. Gwen spent 4 days in business meetings and confer
PolarNik [594]

Answer:

The deductible expense  =  $570

Explanation:

First, the question is not complete, the complete question is as follows

Gwen, an independent consultant, traveled to New York City on a business trip. Gwen spent 4 days in business meetings and conferences and then spent 2 days sightseeing in the area. Gwen's plane fare for the trip was $250. Meals cost $160 per day. Hotels and other incidental expenses amounted to $250 per day.Gwen was not reimbursed by her employer for any expenses. Her AGI for the year is $50,000 and she itemizes but has no other miscellaneous itemized deductions. Gwen may deduct (after limitations).

Solution

How much is the plane fare              $250

How much was spent on means       $640 (160 a day x 4 days)

Subtract: 50% of meal costs               ($320) 0.5 x 640

Hotel Expense was                              $1,000 ($250 x 4 days)

The total is                                            $1,570

Subtract 2% of the AGI                       <u> $1,000</u> (0.02 x 50,000)

The final deductible expense                 $570

This means the amount that Gwen can deduct from the expenses for the trip after the limitations as calculated above is $570

6 0
3 years ago
Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased
denis23 [38]

Answer:

Nicole's Getaway Spa (NGS)

1. Depreciation Schedules:

A. Straight-line method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,000            $16,000            $3,000             $13,000

Year 2         3,000              16,000               6,000               10,000

Year 3         3,000              16,000               9,000                7,000

Year 4         3,000              16,000             12,000                4,000

Year 5         3,000              16,000             15,000                1,000

B. Units-of-production method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,600            $16,000             $3,600              $12,400

Year 2         3,450               16,000               7,050                  8,950

Year 3         3,300               16,000             10,350                  5,650

Year 4         3,150                16,000             13,500                  2,500

Year 5        1,500                16,000             15,000                   1,000

C. Double-declining-balance method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $6,400            $16,000             $6,400              $9,600

Year 2         3,840               16,000              10,240                 5,760

Year 3         2,304               16,000              12,544                 3,456

Year 4          1,382               16,000              13,926                 2,074

Year 5         1,074                16,000             15,000                  1,000

2. Sale of machine for $3,000 at the end of year 3:

Journal Entry of disposal:

1) Straight-line method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $9,000

Credit Sale of Equipment $9,000

To close accumulated depreciation.

Debit Income Summary $4,000

Credit Sale of Equipment $4,000

To record the loss from sale of equipment.

2) Units-of-production method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $10,350

Credit Sale of Equipment $10,350

To close accumulated depreciation.

Debit Income Summary $2,650

Credit Sale of Equipment $2,650

To record the loss from sale of equipment.

3) Double-declining method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $12,544

Credit Sale of Equipment $12,544

To close accumulated depreciation.

Debit Income Summary $456

Credit Sale of Equipment $456

To record the loss from sale of equipment.

Explanation:

a) Data and Calculations:

Cost of machine =     $16,000

Residual value =             1,000

Depreciable amount $15,000

Estimated useful life = 5 years

Annual depreciation expense/rate:

A. Straight-line method = $3,000 ($15,000/5)

B. Unit of production method = $1.50 per unit ($15,000/10,000)

Year 1 = $3,600 (2,400 * $1.50)

Year 2 = $3,450 (2,300 * $1.50)

Year 3 = $3,300 (2,200 * $1.50)

Year 4 = $3,150 (2,100 * $1.50)

Year 5 = $1,500 (1,000 * $1.50)

C. Double-declining balance method:

Straight-line method rate = 20% (100/5)

Double-declining rate = 40% (20% * 2)

Year 1 = $6,400 ($16,000 * 40%) Balance $9,600

Year 2 = $3,840 ($9,600 * 40%) Balance $5,760

Year 3 = $2,304 ($5,760 * 40%) Balance $3,456

Year 4 = $1,382 ($3,456 * 40%) Balance $2,074

Year 5 = $1,074 ($2,078 - $1,000) Balance $1,000

6 0
3 years ago
Select the correct answer.
almond37 [142]

Answer:

answer is b

Explanation:

8 0
2 years ago
Other questions:
  • Classify each statement as true or false by dragging it into the corresponding category.
    6·1 answer
  • The following transactions occur for Badger Biking Company during the month of June: Provide services to customers on account fo
    8·1 answer
  • With manufacturing as the company's core strength, how will you develop a customer focus
    7·1 answer
  • Stephen, the vice president of a private bank, promotes a stress-free work environment. He is concerned about his employees' wel
    6·1 answer
  • Because of their relatively small national economies, which of the following is most likely considered to be the most important
    6·1 answer
  • Quantification Group of answer choices often makes our observations more explicit. limits the possibility of statistical analyse
    5·1 answer
  • You are shopping for a new printer to take back to college with you. You decide on the PIXMA iP100 due to its superior photo pri
    5·1 answer
  • You have $100,000 invested in a 2-stock portfolio. $30,000 is invested in stock with a beta of 1.60 and the remainder is investe
    7·1 answer
  • Fractional reserve banking can be thought of as a bank withholding a portion of its total deposits that are not loaned out. hold
    13·1 answer
  • The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics Internation
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!