Answer:
- Credit (decrease) cash account (112): $12,207
- Debit (decrease) loan account (341): $12,000
- Debit (increase) interest expenses (635): $207
Explanation:
The interest occurred = $12000*7%/365*90=$207
The note to be paid = $12,000
Total paid out: $12,207
If Uniform Supply use cash to pay off the note then the entries include:
- Credit (decrease) cash (112): $12,207
- Debit (decrease) loan account (341): $12,000
- Debit (increase) interest expenses (635): $207
Answer:
True
Explanation:
One of the key roles of any manager is controlling the operations under his authority, and the two main tools that a financial manager has to help him/her control the operations under his/her department are the financial controller (internal auditor) and the external auditor firm. In an ideal world, the financial controller should be enough to do this job, but in the real world, things can get complicated and it is always better to have a different point of view. There is always the possibility that the financial controller is not performing his/her job properly, and the external auditor will help us notice this flaws.
Solution:
The calculation of interest rates using the financial calculator for these inputs;
PV = -$9,968,843;
PMT = $1,521,875;
N = 19;
FV = 0;
CPT I/Y = 13.9999% or approximately 14%
The discount rate used by the potential buyer is approximately 14%
The annual interest rate is 11.803%.
Assumptions:
- Interest is compounded annually.
Answer:
8.43 %
Explanation:
Weighted Average Cost of Capital (WAAC) is the Cost of long term permanent sources of finance. We consider WACC on the Market Weight of sources of Finance.
WACC = ke × E/V + kd × D/V
where,
ke = cost of equity
= 11.08 %
E/V = Market Weight of Equity
= 100 % - 34 %
= 0.66
kd = cost of debt
= interest × ( 1 - tax rate)
= 5.38 % × (1 - 0.39)
= 3.2818 %
D/V = Market Weight of Debt
= 0.34
Therefore,
WACC = 11.08 % × 0.66 + 3.2818 % × 0.34
= 8.43 %
