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3 years ago

PLEASE ANSWER

Business

1 answer:

SashulF [63]3 years ago

5 0

Answer: A. It allows law enforcement to explain why probable

cause exists to arrest someone.

Explanation:

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The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The fir

stich3 [128]

Answer: 5.36%

Explanation:

The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.

When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:

= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)

=5.36%

6 0

3 years ago

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7

mojhsa [17]

Answer:

The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.

Explanation:

Proper year zero cash flow to use in evaluating this project = After-tax value of the land + Cost of manufacturing new plant + Grading Expenses

= $10,100,000 + $21,300,000 + $880,000

= $32,280,000

Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $32,280,000.

NOTE :

- The after-tax value of the land of $10,100,000 should be considered since it is an opportunity cost of capital if the land is used rather than sold.

- The cash outlay of $21,300,000 for the plant cost and the $880,000 for the grading costs are the part of the initial investment in year 0.

6 0

3 years ago

O’Dell Vegetables purchased a harvesting machine on July 1, 2016, for $984,000. The machine was estimated to have a useful life

dusya [7]

Answer:

Depreciation expense in 2019 is $144,050

Explanation:

O’Dell Vegetables uses the straight-line method of depreciation, Depreciation Expense each year is calculated by following formula:

Depreciation Expense = (Cost of machine − Salvage Value )/Useful Life

From July 1, 2016 to 2018:

Annual Depreciation Expense = ($984,000 - $140,000)/8 = $105,500

Depreciation Expense in 2016 = $105,500x6/12 = $52,750

Accumulated Depreciation (end 2018) = $52,750 + $105,500 + $105,500 = $263,750

From 2019, the machine would become uneconomical after December 31, 2023:

Salvage Value = 0 and Remaining useful life = 5 year

Depreciation Expense = (Historical Cost - Accumulated Depreciation - Salvage Value) / Remaining Useful Life = ($984,000-$263,750-0)/5 = $144,050

Depreciation in 2019 is $144,050

7 0

3 years ago

there is a surplus of a new brand of cereal on the market. what will likely happen to the price of the cereal?

Lerok [7]

Answer:

The price of the cereal would fall.

Explanation:

In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.

The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.

When there is a surplus of a new brand of cereal in the market. What will likely happen to the price of the cereal is that the its price would fall.

3 0

4 years ago

Bond Yield and After-Tax Cost of Debt A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 y

Rzqust [24]

Answer:

9.73%

Explanation:

For computing the after tax cost of debt first we have to determine the cost of debt by applying the RATE formula i.e. to be shown in the attachment below:

Given that,

Present value = $604.42

Future value or Face value = $1,000

PMT = 1,000 × 8% ÷ 2 = $40

NPER = 20 years × 2 = 40 years

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after solving this,

1. The pretax cost of debt is 6.95% × 2 = 13.9%

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 13.9% × ( 1 - 0.30)

= 9.73%

8 0

3 years ago