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Zolol [24]
3 years ago
6

During 2021, Terps Company issued 800,000 coupons which entitles the customer to a $5.00 cash refund when the coupon is submitte

d at the time of any future purchase. The company estimates that 70% of the coupons will be redeemed. 350,000 coupons had been processed during 2021. The company recognizes coupon expense in the period coupons are issued. At December 31, 2021, the company should report a liability for unredeemed coupons of:
Business
1 answer:
11Alexandr11 [23.1K]3 years ago
5 0

Answer:

$1,050,000

Explanation:

Calculation to determine what the company should report as a liability for unredeemed coupons

Liability for unredeemed coupons =($800,000 x 0.70 ) - $350,000 ) x $5.00

Liability for unredeemed coupons=($560,000-$350,000)×$5.00

Liability for unredeemed coupons=$210,000x $5.00

Liability for unredeemed coupons=$1,050,000

Therefore At December 31, 2021, the company should report a liability for unredeemed coupons of:$1,050,000

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Red Barchetta Co. paid $27,860 in dividends and $28,815 in interest over the past year. During the year, net working capital inc
const2013 [10]

Answer:

the company's cash flow from assets is - $42,880.

Explanation:

Cash flow from assets is also known as cash flow from investment activities.

Prepare <em>a section of cash flow from investing activities </em>to determine the cash flow from assets.

The only cash flow from investing activity is purchase price (cash outflow) of the assets of $42,880.

8 0
4 years ago
Regal Health Plans issued a ten-year, 12 percent annual coupon bond a few years ago. The bond now sells for $1,100. The bond has
Mars2501 [29]

Answer:

The solution to the given problem is done in excel and an image of the solution is attached.

What is the bond's yield to maturity?

10.35%

What is the bond's yield to call?

10.13%

8 0
3 years ago
Read 2 more answers
John wishes to set up an account for his grandfather so that he can have some extra money each month. John wants his grandfather
jeka94

Answer:

John must invest $3719.4

Explanation:

It is given that John grandfather withdraws $120 per month for 3 year

So total month = 12 ×3 =36 months

Total amount withdrawn S = 36×120 = 4320

m = 12 times per year

Rate of interest i = 5 % = 0.05

We know that S=P(1+\frac{i}{m})^{mt}

4320=P(1+\frac{0.05}{12})^{36}

4320=P\times 1.1614

P = $3719.41

So john must invest $3719.4

6 0
3 years ago
Ben hired Lewis to drive his car in a race. Tuan, a friend of Lewis, promised to pay Lewis $3,000 if he won the race. Lewis won
qaws [65]

Answer:

Consideration contract.

Explanation:

Consideration is basically the fact that Lewis never offered something in consideration to Tuan for his offer to pay the $3,000, this means that both parties need to have a benefit from the agreement and both should have a detriment, if only one party has a benefit that is considered a gift, and the law can´t force someone to gift something. This is why Tuan claim is correct and he isn´t forced to pay the $3,000 to Lewis.

8 0
3 years ago
8. The current price of a stock is $65.88. If dividends are expected to be $1 per share for the next five years, and the require
Snowcat [4.5K]

Answer:

a). Future price of stock in five years=$98.97

b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price

Explanation:

a). Use the expression for calculating the required rate of return as to determine the expected dividend growth rate follows:

RRR=(EDP/SP)+DGR

where;

RRR=required rate of return

EDP=expected dividend payment

SP=share price

DGR=dividend growth rate

In our case:

RRR=10%=10/100=0.1

EDP=$1

SP=$65.88

DGR=y

replacing in the original expression;

0.1=(1/65.88)+y

y=0.1-(1/65.88)

y=0.0848

The expected dividend growth rate=8.48%

Future price of stock=Current price(1+DGR)^n

where;

Current price=$65.88

DGR=8.48%=8.48/100=0.0848

n=5 years

replacing;

Future price of stock=65.88(1+0.0848)^5

Future price of stock=$98.97

b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price

7 0
4 years ago
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