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2 years ago

12

Red Sun Rising Corp. has just signed a lease for its new manufacturing facility. The lease agreement calls for annual payments o

f $2,000,000 for 10 years with the first payment due today. If the interest rate is 3.61 percent, what is the value of this liability today?

1 answer:

fomenos2 years ago

5 0

Answer:

The value of this liability today is $24,234,083.39...

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Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to sala

11111nata11111 [884]

Answer: $20,000

Explanation:

Given that,

Singer's original capital = $40,000

McMann's original capital = $60,000

Singer's salary = $12,000

McMann's salary = $18,000

Interest on original capital = 10%

Profit sharing ratio = 3:2

Income of the year = $30,000

McMann's share of the income:

Salary = $18,000

Interest = $6,000

Singer's share of the income:

Salary = $12,000

Interest = $4,000

Therefore,

Remainder = $30,000 - $40,000

= -$10,000

Hence, remainder will be divided among these two partners in 3:2 ratio.

So,

McMann's share of remainder = $\frac{2}{5}\times10,000$

= -$4,000

Therefore, McMann's share of the income:

= Salary + Interest + remainder

= $18,000 + $6,000 + (-$4,000)

= $20,000

3 0

2 years ago

A corporation has 10,000 bonds outstanding with a 6% annual coupon rate, 8 years to maturity, a $1,000 face value, and a $1,100

stiv31 [10]

Answer:

Year Cashflow [email protected]% PV [email protected]% PV

$ $ $

0 (1,100) 1 (1,100) 1 (1,100)

1-8 47.4 5.3349 252.87 7.0197 332.73

8 1,000 0.4665 465.5 0.7894 789.4

NPV (381.63) NPV 22.13

Kd = LR + NPV1/NPV1+NPV2 x (HR – LR)

Kd = 3 + 22.13/22.13 + 381.63 x (10 – 3)

Kd = 3 + 22.13/403.76 x 7

Kd = 3 + 0.38

Kd = 3.38%

Explanation:

Cost of debt is calculated based on internal rate of return formula. In year 0, we will consider the current market price of the bond as cashflow. In year 1 to 8, we will consider the after-tax coupon as the cashflow. The after-tax coupon is calculated as R(1 - T). R is 6% x $1,000 = $60 and tax is 21%. Thus, we have $60(1 - 0.21) = $47.4. then we will discount the cashflows for 8 years so as to obtain the internal rate of return. The internal rate of return represents cost of debt.

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2 years ago

Sunset Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on OshawaOshawa Air. Sunset's fixed

coldgirl [10]

Answer:

Explanation:

Break even point=fixed cost/ contribution margin per unit

Units to be sold to get target operating income=(fixed costs+ target operating income)/contribution margin per unit

1. Revenue=10%×1600=$160 per ticket

Contribution per ticket=$100-$42=$58 per ticket.

Fixed cost=$29,500

Break even units:$29,500/$58=508.6 tickets

Units to be sold to get target operating income:(29500+$12000)/$58=715.5 tickets

2. Revenue=10%×1600=$160 per ticket

Contribution per ticket=$100-$35=$65 per ticket.

Fixed cost=$29,500

Break even units:$29,500/$65=453.8 tickets

Units to be sold to get target operatig income:(29500+$12000)/$65=638 tickets

3.

Revenue=$50 per ticket

Contribution per ticket=$50-$35=$15 per ticket.

Fixed cost=$29,500

Break even units:$29,500/$15=1966 tickets

Units to be sold to get target operating income:(29,500+$12,000)/$15=2766 tickets

4.

Revenue:$55(fixed comission fee)+$5(delivery fee)=$60 per ticket

Contribution per ticket=$60-$35=$25 per ticket.

Fixed cost=$29,500

Break even units:$29,500/$25=1180 tickets

Units to be sold to get target operating income:(29,500+$12,000)/$25=1,660 tickets

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2 years ago

The last dividend on Spirex Corporation's common stock was $4.00, and the expected growth rate is 10 percent. If you require a r

grandymaker [24]

Answer:

$44

Explanation:

Data provided in the question:

Dividend on Spirex Corporation's common stock = $4.00

Expected growth rate, g = 10%

Required rate of return, r = 20%

Now,

Price willing to pay = $\frac{\textup{D1}}{\textup{r - g}}$

here,

D1 = dividend at end of year

or

D1 = $4 × (1 + r )

or

D1 = $4 × ( 1 + 0.1 )

or

D1 = $4.4

Thus,

Price willing to pay = $\frac{\textup{4.4}}{\textup{0.2 - 0.1}}$

or

Price willing to pay = $44

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2 years ago

A fast-growing computer service company is hiring a Computer Network Architect, a Computer Programmer, a Web Administrator, and

viktelen [127]

IT (Information Technology).

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2 years ago

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