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SVEN [57.7K]
3 years ago
12

On January 1, 2011, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 202

1, but were callable at 101 any time after December 31, 2013. Interest was payable semiannually on July 1 and January 1. On July 1, 2016, Fox called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Fox's gain or loss in 2016 on this early extinguishment of debt was
Business
1 answer:
Tju [1.3M]3 years ago
4 0

Answer:

$8,000 gain

Explanation:

the carrying value of the bonds at the time of the redemption:

10 coupon payments were made, so amortization of bond premium = ($40,000 / 20) x 11 = $22,000

carrying value = $1,040,000 - $22,000 = $1,018,000

redemption price = $1,000,000 x 1.01 = $1,010,000

Fox's gain = carrying value - redemption price = $1,018,000 - $1,010,000 = $8,000

Since the carrying value was higher than the redemption value, Fox must report a gain.

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What is the expected constant-growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and
Viktor [21]

Answer:

8.9

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid = d0 x (1 +g)  

r = cost of equity

g = growth rate

50 = [4 x (1 +g)] / (0.18 - g)

50(0.18 - g)  = 4(1 +g)

6 0
3 years ago
This chapter states that most economists would probably maintain that new technologies are the single most important source of p
maks197457 [2]

Answer:

the correct answer is c)Poor countries do not benefit from new scientific knowledge to the same degree that rich countries do, since they lack the resources required to apply the knowledge widely in a beneficial way.

Explanation:

although novel technologies enable economies to be more productive and achieve greater potentials, in poorer countries they lack the necessary infrastructure and human resources to harness the full potential of this technologies. Also, the initial costs of applying these technologies is higher as well.

Because of this, these new technologies do not benefit the poor countries much.

4 0
3 years ago
Aiden and Priya believe automation is necessary so Bergman’s can be ______, not ______.
denpristay [2]

Answer:

Bergman’s can be more efficient, not cumbersome to consumers

Explanation:

Priya acknowledges that competitors are changing its purchase method to an automated one. She sees the trend in consumer behavior and establishes that Bergman has to adopt this new method to be up to date in regards to market best practices.

Therefore, changing to an automated sales, Pryia believes that Bergman will be more modern, efficient and faster.  

5 0
3 years ago
1. Harley Davidson has its engine plant in Milwaukee and its motorcycle assembly plant in Pennsylvania. Engines are transported
Serggg [28]

Answer:

Company should load 1,479.9 motorcycles on each truck.

Explanation:

Cost per trip = $1,000

Demand for motorcycles = 300 per day

Cost per engine = $500

Holding cost =  20% of $500

                     = $100

Assuming that company plant works for 365 days in a year,

Annual demand = 300 motorcycles × 365 days

                           = 109,500 motorcycles

Economic\ order\ quantity\ for\ each\ truck=\sqrt{\frac{2DS}{H}}

where,

D = Annual demand in units

S = Set up cost per order

H = Handling cost per order

Economic\ order\ quantity\ for\ each\ truck=\sqrt{\frac{2\times109,500\times1,000}{100}}

=\sqrt{\frac{219,000,000}{100} }

\sqrt{2,190,000}

= 1,479.9

Thus, the company should load 1,479.9 motorcycles on each truck.

5 0
3 years ago
Annual maintenance cost for a particular section of highway pavement are $3,000.The placement of a new surface would reduce the
UkoKoshka [18]

Answer:

$17,877

Explanation:

initial outlay = ?

net cash flows years 1 to 5 = $3,000 - $400 = $2,600

net cash flows years 6 to 10 = $3,000 - $800 = $2,200

assuming that the discount rate is 6%, we need to determine the maximum amount of initial investment that would result in the NPV = 0

in order to do this we have to calculate the present value of the future cash flows:

PV = $2,600/1.06 + $2,600/1.06² + $2,600/1.06³ + $2,600/1.06⁴ + $2,600/1.06⁵ + $2,200/1.06⁶ + $2,200/1.06⁷ + $2,200/1.06⁸ + $2,200/1.06⁹ + $2,200/1.06¹⁰ = $17,877

that means that the maximum amount that can be invested = $17,877, and that way the NPV = 0

7 0
3 years ago
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