Q: During 2019, Bitsincoins Corporation had EBIT of $100,000, a change in net fixed assets of $400,000...
A: Given, EBIT = $100,000 Change in Capital expenditure = $400,000 Increase in current assets = $100,00...
Q: A stock is selling for $80 in the market. The company’s beta is 1.5, the market risk premium (rM - r...
A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock...
Q: Consider the following three stocks: a. Stock A is expected to provide a dividend of $10.90 a share ...
A: Since you have asked a question with multiple parts, we will solve the first 3 parts for you. Please...
Q: For purposes of the Stock Market Game and real-life comparisons as to how an investment has performe...
A: Return on investment is the percentage rate which shows the percentage of profit earned on the inves...
Q: The XYZ customer service branch maintains a disbursement account which is funded by the main office....
A: In this we have to use optimal cash formula to get the optimal cash balance.
Q: A stock is selling for $80 in the market. The company’s beta is 1.5, the market risk premium (rM - r...
A: As per CAPM Re = Rf + beta x (Rm - Rf) Where: Re = return on equity. Rf = theoretical risk-free rate...
Q: I=$48;P=$600;t=240 days; r=?r=?
A: Simple Interest refers to the method in which we calculate the interest on a specific principal amou...
Q: Mandy has determined the following information about her own financial situation. Her checking accou...
A: Total value of the assets is the sum of the value of the all assets. Hence, all assets need to be co...
Q: A stock has the following probability distribution: If economy is good (the probability is 20%), its...
A: The Expected rate of return is the total return expected by the investor under different situations ...
Q: In order to borrow $100,000 for a 5% loan on a discount loan basis with a 5% compensating balance; t...
A: Whenever an individual is in need of extra funds to finance his or her purchase in case of less cash...
Q: A person needs $17,700 immediately as a down payment on a new home. Suppose that she can borrow th...
A: Borrowing Amount = 17,700 Semi Annual Installments Time Period = 20 semi annual periods Interest Rat...
Q: Suppose you earned a $595,000 bonus this year and invested it at 8.25% per year. How much could you ...
A: Amount that can be withdrawn at end of each of 20 years can be calculated using PMT function in exce...
Q: Suppose that the current one-year rate and expected one-year T-bill rates over the following three y...
A: The unbiased expectations theory states that the return that an investor could earn from holding a s...
Q: Q6/ The purchase price of a natural gas-fired commercial boiler (capacity X) was $190000 eight years...
A: Purchase price eight years ago = $190,000 Capacity of old boiler SB is X. Capacity of new boiler SA ...
Q: Use the data below to answer the following question. If you have a risk-aversion factor of 2.5 and ...
A: Working Note #1 Calculation of standard deviation Year Return (X) X-x̄ (X-x̄)^2 2014 -15% -22...
Q: Which of the following user groups would be interested in the company's dividend policy and operatio...
A: Dividends are distribution of profits or retained earnings by a corporate entity to its shareholders...
Q: show me a solutio
A: Simple interest is a quick and easy way to figure out how much interest you'll pay on a loan, which ...
Q: Equity investors expect to be compensated for two things
A: Investors expect to be compensated for the risk they undertake when making an investment.(i.e. Risk ...
Q: 9. A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 year...
A: Ordinary Annuity is the series of equal payments received at the end of intervals. Present value of ...
Q: Your company wants to bid on the sale of 10 customized machines per year for five years. The initial...
A: Here we need to find sales level for bid by using this equation OCF =[Sales -variable cost-fixed cos...
Q: Explain THREE (3) reasons that make some of the bonds to have high price fluctuation than other bond...
A: A bond is a financial instrument of a company that is issued as fixed-income security by the company...
Q: For a $100,000 mortgage for 25 years at a 11.5% rate (monthly payments), find 4) If 8.685 points...
A: We need to use excel RATE function to calculate yield to lander. The formula is =RATE(NPER,PMT,-PV)...
Q: 7. What is the present worth of a year annuity paying P 3,000.00 at the end of each year, with inter...
A: The time value of money is the financial concept that is used for estimating and determining the wor...
Q: Is Collateralized debt obligation a good investment? Please explain in details.
A: A collateralized debt obligation also known as a CDO is a complex structured credit product which is...
Q: A family spends $34000 in a year for living expenses. If prices increase 1% per year for the next 3 ...
A: As the prices increase due to inflation the expenses of the family will also increase accordingly. T...
Q: 4. Many retired people buy annuities. With an annuity, a saver pays an insurance company a lump- sum...
A: Initial amount = $180,000 Annuity amount = $20,000 Age = 65 Let interest rate be r%
Q: 8.On March 24, 2020, the Dow Jones Industrial Average opened at $18,591.93 and closed at $20,704.91....
A: The effective annual rate of interest is the actual or the real rate of interest paid or received ov...
Q: QUESTION 7 The table below shows rates on zero-coupon Treasury securities: Maturity (years) Yield 1 ...
A: Zero-coupon Treasury securities Zero-coupon bonds are also called as deep discount bonds or pure dis...
Q: You deposit $120 monthly in a saving plan with APR of 6% for 10 years. How much would your accumul...
A: Future value The future value of the cash flow is the future worth of a cash flow at a certain rate ...
Q: For Nos. 33-35. A CAD center just purchased a CAD software for P500,000 now and annual payments of P...
A: 33. Let the annual payment be denoted as CFn for year n. r = 20% n = 5 years Present worth of paymen...
Q: 8. A man loans P 187.400 from a bank with interest at 5% compounded annually. He agrees to pay his o...
A: Loan amount = P 187,400 Annual interest rate = 5% Number of annual payments = 8 First annual payment...
Q: 6. Which of these gives the lowest effective rate of interest? A. 12.35% compounded annually B. 11.9...
A: The effective rate of interest The effective rate of interest may be a useful concept also called t...
Q: So Long, Inc, has sales of $334,000, costs of $145,400, depreciation expense of $63,200 and interest...
A: Operating cash flow refers to the inflow and outflow of the cash resulting from the everyday activit...
Q: A car was bought on an installment basis with a monthly installment of 30,000 for 60 months. If the ...
A: Monthly payment (P) = $ 30,000 Number of monthly payments (N) = 60 Annual interest rate = 12% Monthl...
Q: A person needs $17,700 immediately as a down payment on a new home. Suppose that she can borrow thi...
A: Continuously compounded interest rate refers to the interest rate that is calculated on the princip...
Q: While Mary Corens was a student at the University of Tennessee, she borrowed $11,000 in student loan...
A: Present Value of annuity refers to the present value of all the future payments of and series of ann...
Q: 6.22 Computing annuity payment: Gary Whitmore is a high school sophomore. He currently has $7,500 in...
A: Note: Since here multiple questions have been posted and two questions are specified, we can solve t...
Q: Renovate Replace -$4,000,000 -$1,300,000 2,000,000 1,000,000 2,000,000 700,000
A: In this we have to find out net present value and find out the best.
Q: Pharmecology just paid an annual dividend of $1.50 per share. It's a mature company, but future EPS ...
A: Annual dividend = $1.5 per share Forecasted dividend growth rate = 3.5% Nominal cost of capital = 10...
Q: Mr. Dela Cruz bought a piece of property for Php100,000 downpayment and 10 deferred semiannual pay...
A: Down payment = Php 100,000 Semi annual payment = Php 8,000 Number of semi annual payments = 10 First...
Q: A manufacturer purchases 20,000 units of a product at S1 each, 15,000 at S1.15 each and 5,000 at S2 ...
A: 20000 Units at $ 1 each 15000 Units at $ 1.15 each 5000 Units at $ 2 each
Q: The Nelson Company has $1,228,500 in current assets and $455,000 in current liabilities. Its initial...
A: Current ratio is the liquidity ratio that is calculated by dividing current assets by current liabil...
Q: Thom Inc.’s common stock has a par value of $1 and a current market price of $15. Explain why these ...
A: The par value is the value assigned by the entity to the financial instrument. The shares and bonds ...
Q: A project has an initial cost of P52,125, expected net cash inflows of P12,000 per year for 8 years,...
A: NPV is the difference between resent value of all cash inflows and initial investment. NPV =Present ...
Q: A firm has steady inflows and periodic outflows and wants to use the Beranek model to manage its cas...
A: Beranek model : It is based upon the assumption that cash inflows are greater than cash outflows ,...
Q: A local sanitation authority needs to purchase a new garbage truck. The authority has two truck mode...
A: Net present value (NPV) is the difference between present value(PV) of all cash inflows/benefits and...
Q: 9. A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 year...
A: Loan amount = P 10,000 Annual interest rate = 12% Annual payment = P 2000
Q: Statement 1: Proceeds of life insurance received by the beneficiary of the insured is a return on ca...
A: Life insurance is an agreement between an insurance policy holder and an insurer or insurance compan...
Q: You are planning to invest $1,000 in an account earning 12% per year for retirement. a. If you put t...
A: Amount to be invested = $1000 Interest rate = 12%
Q: Which of the following is correct regarding a 20-year monthly payment amortized mortgage with a nomi...
A: Mortgage loan are taken against security of immovable property such as house. These are generally ta...
On January 2, 2011, Blink Corporation was granted 5,000 acres of land in a village, located near the slums outside city limits, by a local government authority. The condition attached to this grant was that Blink Corporation should clean up this land and lay roads by employing laborers from the village in which the land is located. The government has fix the minimum wage payable to the workers. The entire operation will take three years and is estimated to cost P100,000,000. This amount will be spent in this way, P20,000,000 each in the first, P30,000,000 in the second years and P50,000,000 in the third year. The fair value of the land is currently P120,000,000.
What portion of the grant is recognized for the year ended December 31, 2012?
Step by step
Solved in 2 steps
- Bright Co. received a government grant of 10,000,000 to install and run a windmill in an economically backward area. The entity had estimated that such a windmill would cost 25,000,000 to construct. The secondary condition attached to the grant is that the entity shall hire labor in the area where the windmill is located. The construction was completed on January 1, 2014. The windmill is to be depreciated using the straight-line method over a period of 10 years. What amount of grant income should be recognized for 2014? O2,500,000 1,500,000 O 1,000,000 5,000,000A city is evaluating the installation of a garbage incinerator on the outskirts of town. The cost of the unit is $2 million. Environmental impact studies cost $25,000 to be paid prior to construction begins. Annual costs are estimated to include: Plant operating expenses: $30,000. Environmental remediation expenses: $32,000. As a benefit of the incinerator, a cost reduction of $12 per year is estimated to be on the bill of the company's 35,000 customers. The equipment is estimated to have a lifespan of 10 years, after which the incinerator will be dismantled at a cost of $45,000. Assuming the money is raised at 4% interest, how much is the profit ratio at cost of this project? a. 1.625 b. 1.597 c. 1.634 d. 1.651 e. None of the aboveOn July 1, 2004, the national government granted a parcel of land located in Baliuag, Bulacan to Black. On the date of grant, the land had a fair value of P2,000,000. The grant required Black to construct a cold storage building on the site. Black finished the construction of the building, which costs P4,000,000 and has an estimated useful life of 25 years, on January 2, 2005. How much income from the government grant should be recognized in 2005? a. P2,000,000 b. P160,000 c. P80,000 d. P0
- A village recently completed the construction of a new water tower. The entire cost of the water tower was $948,000, and the government paid $360,000 of the total cost through the awarding of a grant. In addition, the village can delay paying the balance of the cost for 40 years (without paying any interest during the 40 years). To finance the balance, the village board will at this time assess its 511 homeowners a one-time flat fee surcharge and then invest this money in a 40-year CD paying 7.1% interest compounded monthly. Complete parts (a) through (c) below. a) What is the balance due on the water tower? $ b) How much will the village need to invest at this time to raise the balance due in 40 years? (Round to the nearest cent as needed.) $ c) What amount should each homeowner pay as a surcharge? $Derringdo is a broadband provider which receives government assistance to provide broadband to remote areas. Derringdo invested in a new server at a gross cost of $800,000 on 1 October 20X2. The server has an estimated life of ten years with a residual value equal to 15% of its gross cost. Derringdo uses straight-line depreciation on a time apportioned basis. The company received a government grant of 30% of its cost price of the server at the time of purchase. The terms of the grant are that if the company retains the asset for four years or more, then no repayment liability will be incurred. Derringdo has no intention of disposing of the server within the first four years. Derringdo's accounting policy for capital-based government grants is to treat them as deferred credits and release them to income over the life of the asset to which they relate. What is the net amount that will be charged to operating expenses in respect of the server for the year ended 31 March 20X3? A $10,000 B…I Company received a government grant of P15,000,000 to install and run a windmill in an economically backward area. The entity has estimated that such a windmill would cost P25,000,000 to construct. The secondary condition attached to the grant is that the entity shall hire labor in the local market from the economically backward area where the windmill is located, instead of employing workers from other parts of the country. The entity shall maintain a ratio of 1:1 local worker to workers from outside in its labor force for the next 5 years. The construction was completed at the beginning of current year. The windmill is to be depreciated using the straight line method over a period of 10 years. What amount of income from the government grant is recognized for the current year?
- Coyote Co. is building a waste landfill in the desert between Arizona and California. Coyote estimates that this landfill will be in operation for five years, will cost $250 million to build, and will generate $800 million in revenues during its useful life. Federal law requires that Coyote decommission and decontaminate the site at the end of its useful life. A team of engineers has studied the decontamination procedure and has estimated that Coyote will have to spend $15 million on the decommissioning process when the landfill is shut down in five years. Coyote’s credit-adjusted rate of interest is 10%. Use tables (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1-a. Prepare the entry required for the recognition of any ARO asset and liability. 1-b. Prepare an amortization table.ACME Corporation distributes agricultural equipment. The board of directors is considering a proposal to establish a facility to manufacture an electronically controlled "intelligent" crop sprayer invented by a professor at a local university. This crop-sprayer project would require an investment of $10 million in assets and would produce an annual after-tax net benefit of $1.8 million over a service life of eight years. All costs and benefits are included in these figures. When the project terminates, the net proceeds from the sale of the assets would be $1 million (as shown). Compute the rate of return of this project.Gentry Machines. Inc .. has just received a special job order from one of itsclients. The following financial data on the order have been collected: This two-year project requires the purchase of a special-purpose piece of equipment for $55,000. The equipment falls into the MACRS five-year class. The machine will be sold at the end of two years for $27,000 (today's dollars). The project will bring in additional annual revenue of $114,000 (actual dollars), but it is expected to incur an additional annual operating cost of $53,800 (today's dollars). To purchase the equipment, the firm expects to borrow $50,000 at 10% over a two-year period (equal annual payments of $28,810 in actual dollars). The remaining $5,000 will be taken from the firm's retained earnings. The firm expects general inflation of 5% per year during the project period. The firm's marginal tax rate is 40%, and its market interest rate is 18%.(a) Compute the after-tax cash flows in actual dollars.(b) Whal is the…
- Garbage collection in the city are collected by garbage trucks which are operated by private contractor to ensure effective service to the public. One garbage truck will cost P3M with an annual maintenance cost of P50,000. The life of the truck is 5 years with a salvage value of P180,000. The contractor can hire a similar truck for P3400 a day. If money is worth 10% annually, how many days per year must the truck be used to warrant the purchase of the machine assuming it is used everyday for the whole year? Select the correct response: 158 221 239 200Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a hurricane. THSI will lease space in this facility to various agencies and groups providing relief services to the area. THSI estimates that this project will initially cost $4.87 million to setup and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million. THSI will require no working capital for this investment. THSI's marginal tax rate is 35%. Assume that THSI's cost of capital is 14.6% p.a. Compute the NPV of the temporary housing facility to the nearest dollarSAP Inc. received a $1.5 million grant under its Small Business Innovation program. SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $500,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 14% per year? Assume a cost of operations and other costs for SAP equal 50% of revenue. $5.64 million $4.80 million $4.51 million $5.93 million
