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Anettt [7]
2 years ago
12

g On January 1, 2021, Tiny Tim Industries had outstanding $1,000,000 of 11% bonds with a book value of $966,500. The indenture s

pecified a call price of $983,000. The bonds were issued previously at a price to yield 13% and interest payable semi-annually on July 1 and January 1. Tiny Tim called the bonds (retired them) on July 1, 2021. What is the amount of the loss on early extinguishment?
Business
1 answer:
pentagon [3]2 years ago
4 0

Answer:

The loss on early extinguishment is $8677.5

Explanation:

First of all,one needs to compute the carrying value of the bond as at the date of the call in order to determine the loss on early redemption.

carrying value =book value+interest expense-coupon payment

book value is $966,500

interest expense=$966,500*13%*6/12=$62,822.50  

coupon payment=$1000,000*11%*6/12=$55,000

carrying value=$966,500+$62,822.50-$55,000=$ 974,322.50  

Loss on redemption =call price -carrying value of the bond

call price is $983,000

loss on early redemption=$983,000-$974,322.50  =$8,677.5

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At an activity level of 3,000 units, North Corporation's total variable cost is $15,000 and its total fixed cost is $20,000. For
oee [108]

Answer:

$5 per unit.

Explanation:

At an activity level of 3,000 units, we have:

Variable cost per unit = Total variable cost / Units produced = $15,000 / 3,000 = $5

Since the variable cost per unit must be equal at both lowest and highest level of activities, theerefore, the variable cost per unit at 3,500 is also $5 per unit.

3 0
2 years ago
Blink Dream has four strategic business units (SBUs)—accommodation, insurance, music, and publishing. Its publishing unit has al
spayn [35]

Answer: The options are given below:

A) Dogs

B) Question marks

C) Stars

D) Cash cows

The correct option is D. Cash cows.

Explanation:

Products that are in slow-growing markets, but for which the company has a relatively large market share are considered Cash Cows, and it is expected of the company to milk the cash cow for as long as it can.

Cash cows, are typically leading products in markets that are mature.

Generally, a product that is designated as a Cash Cow will generate returns that are higher than the market's growth rate and sustain itself from a cash flow perspective.

The product should be taken advantage of for as long as possible. The value of cash cows can be calculated easily because their cash flow patterns are highly predictable.

In summary therefore, low-growth, high-share Cash Cows should be continuously milked for cash in order to reinvest in high-growth, high-share Stars that have a high future potential.

4 0
2 years ago
To hedge future uncertainty, five sets of actions organizations can be taken. One of which is: Select one: a. collaborate b. inc
saveliy_v [14]

Answer:

The correct answer is letter "C": delay until further clarity emerges.

Explanation:

American Professor Alfred A. Marcus (born in 1950) in his book "<em>The Future of Technology Management and the Business</em>" (2015) explains hedging could be a strategy to protect companies in front of the rapidly changing environment they face because of the constant introduction to technology in the market. According to Marcus, there are five (5) hedging strategies firms could implement:

  1. Gamble on the most probable: <em>work on the product with the highest success rate. </em>
  2. Take the robust route: <em>invest in as many products as possible. </em>
  3. Delay until further clarity emerges: <em>waiting for a proper moment to react in front of market changes. </em>
  4. Commit with a fallback: <em>adapt according to the market. </em>
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8 0
2 years ago
Hubbard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-
Ghella [55]

Answer:

Instructios are listed below.

Explanation:

Giving the following information:

Hubbard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days.

Wages and salaries:

Fixed= $ 2,300

Variable=  $ 7.20

Estimated Wages and Salaries= 2,300 + 7.2*2,100= $17,420

3 0
2 years ago
Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas.
Zinaida [17]

Answer and Explanation:

Nike

$18,627÷ ($2,494.7a+ $2,795.3b)/2

$18,627÷$2,645 = 7.0 times

Adidas

$10,299÷$1,415c+ $1,459d)/2

10,299÷$1 437= 7.2 times

2,566.2 – 71.5

b2,873.7 – 78.4

c1,527 – 112

d1,570 – 111

Average collection period

Nike

365÷7.0= 52.1 days

Adidas

365÷7.2

= 50.7 days

Therefore Adidas's accounts receivable turnover was about 3% higher [(7.2 – 7.0) ÷7.0] than that of Nike's, which simply means that Adidas was slightly more efficient than Nike in turning accounts receivable into cash.

8 0
2 years ago
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