Answer:
c. Kena recognizes a gain of $30,000
Explanation:
cash 650,000 debit
land 250,000 credit
gain at disposal 350,000 credit
liabilities 500,000 debit
cash 500,000 credit
Then, the company will close all account and leave kena account with a capital of 150,000 to mathc the remaining 150,000 cash
as her basis is 120,000 there will be a gain for 30,000
Answer:
The loss of the financial institution is $413,000
Explanation:
Let's say that after 3 years the financial institution will receive:
0.5 * 10% of $10million
= 0.5 * 0.1 * 10000000
= $500,000
Then, they will pay 0.5 * 9% of $10M
= 0.5 * 0.09 * 10000000
= $450,000
Therefore, their immediate loss would be $500000 - $450000
= $50000.
Let's assume that forward rates are realized to value the rest of the swap.
The forward rates = 8% per annum.
Therefore, the remaining cash flows are assumed that floating payment is
0.5*0.08*10000000 =
$400,000
Received net payment would be:
500,000-400,000= $100,000. The total cost of default is therefore the cost of foregoing the following cash flows:
Year 3=$50,000
Year 3.5=$100,000
Year 4 = $100,000
Year 4.5= $100,000
Year 5 = $100,000
Discounting these cash flows to year 3 at 4% per six months, the cost of default would be $413,000
Answer:
They would need to buy $64,068.981 in U.S treasury bonds on Ava's second birthday to ultimately provide $120,000 for college expenses in 16 years.
Explanation:
The initial amount to be invested in order to yield $120,000 after 16 years can be expressed as;
F.V=P.V(1+R)^n
where;
F.V=future value of investment
P.V=present value of investment
R=annual interest rate
n=number of years
In our case;
F.V=$120,000
P.V=unknown
R=4%=4/100=0.04
n=16 years
replacing;
120,000=P.V(1+0.04)^(16)
120,000=P.V(1.04)^16
120,000=1.873 P.V
P.V=120,000/1.873
P.V=$64,068.981
They would need to buy $64,068.981 in U.S treasury bonds on Ava's second birthday to ultimately provide $120,000 for college expenses in 16 years.
The banking that allows that can be chase.
