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Luba_88 [7]
3 years ago
8

Dyckman Dealers has an investment in Thomas Corporation bonds that Dyckman accounts for as a trading security. Thomas Corporatio

n's bonds are publicly traded and the prevailing market price indicates that Dyckman's investment is worth 20,000. However, Dyckman management believes that the bond market is generally overvalued, and their analysis of the Thomas investment suggests to them that it is worth $18,000. Dyckman should carry the Thomas investment on its balance sheet at:_____.
A) $20,000.
B) $18,000.
C) Either $18,000 or $20,000, as either are defensible valuations.
D) $19,000, the midpoint of Dyckman's range of reasonably likely valuations of Thomas.
Business
1 answer:
faust18 [17]3 years ago
3 0

Answer: $20,000

Explanation:

Bonds are to be carried in the books at their fair value which is their market value. That value is $20,000 in this instance and so Dyckman Dealers will have to record the bonds at that $20,000 value.

Investment analysis are not a basis for recording bond prices. They are simply a basis for making investment decisions. For instance, because they believe that the bond is overvalued, they can benefit from this by short selling the bond and waiting for it to drop in price.

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At the present time, Andalusian Limited (AL) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. The
JulijaS [17]

Answer:

After tax cost of debt is 6.45%

Explanation:

In computing the after tax cost of debt, the starting point would be to ascertain the pre-tax cost of debt-yield to maturity-before applying the tax.

The yield to maturity can be calculated using the rate formula in excel ,given as :=rate( nper,pmt,-pv,fv)

nper is the nuer of coupon interest the bond would pay which is 20

pmt is the annual payment of the bond which is 13%*$1000=$130

pv is the current price of the bond $1,181.96

fv is the face value of the bond which is $1000

=rate(20,130,-1181.96,1000)

rate=10.75%

Pretax cost of debt is 10.75%

After tax cost of debt=pretax cost of debt*(1-tax rate)

tax rate is 40%=0.4

                                  =10.75%*(1-0.4)

                                   =6.45%

7 0
3 years ago
What criteria is used to determine the date when foreign taxes are accrued for purposes of the foreign tax credit?
vfiekz [6]
➡️ If you choose to take the foreign tax credit, and the taxes paid or accrued✔️

➡️Use the rate of exchange in effect on the date you paid the foreign taxes to the ✔️

➡️For this purpose, withholding tax includes any tax determined on a gross basis.✔️

➡️Need to know how to qualify for Foreign Tax Credit and avoid double taxation✔️

➡️high tax foreign countries, it may be preferable to use the Foreign Tax Credit alone.✔️

➡️ and excess profits taxes paid or accrued during your tax year to any foreign ✔️
7 0
3 years ago
Suppose that France and Denmark both produce fish and stained glass. France's opportunity cost of producing a pane of stained gl
andriy [413]

Answer:

France has a comparative advantage in the production of stained glass.

Denmark has a comparative advantage in production of fish.

France will gain from trade as long as it gets more than 3 pounds of fish for each pane of stained glass.

Denmark can gain from trade if it gets more than 0.09 pane of stained glass for each pound of fish it exports.

4 pounds of fish per pane of stained glass.

7 pounds of fish per pane of stained glass.

Explanation:

France and Denmark both produce fish and stained glass.

France's opportunity cost of producing a pane of stained glass

= 3 pounds of fish

Denmark's opportunity cost of producing a pane of stained glass

= 11 pounds of fish

France's opportunity cost of producing a pound of fish

= \frac{1}{3}

= 0.33 pane of stained glass

Denmark's opportunity cost of producing a pound of fish

= \frac{1}{11}

= 0.09 pane of stained glass

France has a lower opportunity cost of producing stained glass so we can say it has a comparative advantage in the production of stained glass. While Denmark has a comparative advantage in the production of fish.

If both countries start to trade with each other, France will gain from trade as long as it gets more than 3 pounds of fish for each pane of stained glass.

While Denmark can gain from trade if it gets more than 0.09 pane of stained glass for each pound of fish it exports.

Both the countries will gain from trade if the trade price lies between their opportunity cost. both countries will gain from trade if the price is 4 pounds of fish per pane of stained glass or 7 pounds of fish per pane of stained glass.

8 0
3 years ago
Bonita Industries has estimated that total depreciation expense for the year ending December 31, 2018 will amount to $583000, an
Mice21 [21]

Answer:

<u><em>Total expenses 936,500</em></u>

depreciation 291,500

wages expense 645,000

Explanation:

Assuming the depreciation are calculate base on straight line or that their output is lineal through the year:

It will be half of the depreciation for the year.

583,000 / 2 =  291,500 depreciation expense for six-month

For the year-end bonused It wll be the same ideal, we assume are earned equally during the year. So at half year half of the bonuses should be earned:

wages expense 1,290,000/2 = 645,000

<u>Total expenses 936,500</u>

7 0
3 years ago
Here is a question for you to practice your intuition... imagine a deluge in the city versus the forest. why does urbanization (
Serga [27]

The correct answer is B. Urbanization lowers the peak discharge of streams and decreases the lag time after a rainstorm.

4 0
3 years ago
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