BUSINESS COLLEGE

An All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure: Time Salary 0 $ 5,700,000 1 4,300,000 2 4,800,000 3 5,300,000 4 6,700,000 5 7,400,000 6 8,200,000 All salaries are to be paid in a lump sum. The player has asked you as his agent to renegotiate the terms. He wants a $9.2 million signing bonus payable today and a contract value increase of $1,200,000. He also wants an equal salary paid every three months, with the first paycheck three months from now. If the discount rate is 4.7 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)

Answers

Answer 1
Answer:

Answer:

PTM  $ 1,225,900.379

Explanation:

We will calculate the present value of the contract.

Then we will increase by 1,200,000

Next, we subtract the 9.2 bonus payable today

and distribute the rest under quarter payments:

We use present value of a lump sum

(Nominal)/((1 + rate)^(time) ) = PV

0 5,700,000 5,700,000

1 4,300,000 4,102,588.223

2 4,800,000 4,369,383.7

3 5,300,000 4,603,035.135

4 6,700,000 5,551,785.732

5 7,400,000 5,850,312.795

6 8,200,000 6,185,156.501

Then we add them: 36,362,262.09

We increase by 1,200,000

and subtract the 9,200,000 initial payment

28,362,262.09

this is the present value fothe quarterly payment

Next we calculate the equivalent compound rate per quarter:

(1+(0.047)/(365) )^(365)  = (1+(r_e)/(4) )^(4) \nr_e = (\sqrt[4]{1+(0.047)/(365) )^(365)} - 1)* 4

equivalent rate: 0.002954634

Now we claculate the PTM of an annuity of 24 quearter at this rate:

PV / (1-(1+r)^(-time) )/(rate) = PTM\n

PV  $28,362,262.09

time 24

rate 0.002954634

28362262.0861625 * (1-(1+0.00295463425906195)^(-24) )/(0.00295463425906195) = PTM\n

PTM  $ 1,225,900.379

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Livro Company has three operating segments with the following information: Books Calendars Bags Sales to outsiders $ 8,650 $ 4,360 $ 6,650 Intersegment transfers 665 1,130 1,550 In addition, corporate headquarters generates revenues of $1,000. What is the minimum amount of revenue that each of these segments must generate to be considered separately reportable? (Round your answer to the nearest whole dollar.)

Answers

Answer:

minimum amount of revenue that segment of each generate separate is = $2295.5

Explanation:

given data

Bags Sales = $8,650

Bags Sales = $4,360

Bags Sales  = $6,650

Intersegment transfers = 665

Intersegment transfers = 1,130

Intersegment transfers = 1,550

generates revenues = $1,000

solution

we get here total Sales to outsiders that is

total Sales to outsiders = $8,650 + $4,360 +  $6,650

total Sales to outsiders = $19660

and

Intersegment transfers is = 665 + 1,130 + 1500

Intersegment transfer = 3295

so that Combined Segment Revenue is

Combined Segment Revenue = 19660  + 3295

Combined Segment Revenue = 22955

so minimum amount of revenue that segment of each generate separate is 10% Criteria is

= 10 % of 22955

minimum amount of revenue that segment of each generate separate is = $2295.5

E15-9 (L01,3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2017. Instructions Answer the questions in each of the following independent situations. (a) If the preferred stock is cumulative and dividends were last paid on the preferred stock on December 31, 2014, what are the dividends in arrears that should be reported on the December 31, 2017, balance sheet? How should these dividends be reported? 814 Chapter 15 Stockholders’ Equity (b) If the preferred stock is convertible into seven shares of $10 par value common stock and 4,000 shares are converted, what entry is required for the conversion assuming the preferred stock was issued at par value? (c) If the preferred stock was issued at $107 per share, how should the preferred stock be reported in the stockholders’ equity section?

Answers

Answer:

(a)

Preferred stock Dividend = ( 10,000 x 100 ) x 8% = $80,000

Cumulative Dividend

      Date                   Dividend for the year      Balance

December 31, 2015           $80,0000              $80,000

December 31, 2016           $80,0000              $160,000

December 31, 2017           $80,0000              $240,000

Payable of $240,000 Dividend will be reported on the Balance Sheet.

(b)                                                          Dr.                       Cr.

Preferred Stock (4,000 x $100)   $400,000

Common stock ((4000 x 7) x $10)                            $280,000

Paid-In Capital in excess of Par - Common share  $120,000

(c)

Cash ( 4000 x 107 )                       $428,000

Preferred Stock (4000 x $100)                                 $400,000

Paid-In Capital in excess of Par - Preferred share  $28,000

It will be reported in balance sheet as follow:

Equity                                                                               $

Preferred Stock                                                          400,000

Paid-In Capital in excess of Par - Preferred share     28,000

Explanation:

(a) Last dividend was paid on December 31, 2014, the subsequent 3 years are outstanding until December 31, 2017, so the total payable dividend is $240,000 which will be reported on Balance sheet.

(b) 4000 preferred shares on par value are converted to 7 common shares each at $10 par value.

(c) Preferred stock issued @ $107 will be reported as Preferred stock of $400,000 and Paid-In Capital in excess of Par - Preferred share of $28,000.

Which of the following statements is FALSE?A. MMProposition1, if there are no taxes, states the value of the firm does not depend whatsoever on itscapital structure.B. MM Proposition 2, if there are no taxes, explains how the cost of equity decreases as the firm increasesits use of debt financing.C. Because interest expense is tax deductible, leverage increases the firm's value by the amount of thepresent value of the interest tax shield.D. Because interest expense is tax deductible, a firm's WACC decreases as firms rely more heavily on debt financing.

Answers

Answer:

B. MM Proposition 2, if there are no taxes, explains how the cost of equity decreases as the firm increases its use of debt financing

Explanation:

Here is some price information on Fincorp stock. Suppose that Fincorp trades in a dealer market. Bid Ask 55.25 55.50 a. Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed

Answers

Answer:

$55.50

Explanation:

The bid price is $55,25 is the price applicable to investors would intend to sell their investment.

The ask price is $55.50 is the price applicable to investors who wish to acquire the Fincorp stock.

The prices have been computed in such a  way that the broker will always gain, whether an investor is buying or selling his/her stake.

Conclusively, the order given to the broker to buy at market would be executed at the ask price of $55.50, not the other way round.

There is a direct relationship between the par value and market value of common stock: stocks with a low par value have a low market value, while stocks with a high par value have a high market value.a. True
b. False

Answers

Answer:

The statement is false.

Explanation:

As the market value of the stock depends upon the industry risk, political, economical, technological, etc factors and also largely depends upon the business performance which is the profits generated by the organization and its cashflow health. So higher par value has nothing to do with higher market value. Hence the statement is totally incorrect.

What can I do to make money with no money and no credit?

Answers

Work at a job that does not take them two things like babysitting
Online jobs like surveys and Ux Testing, definitely check out UserTesting and Toluna
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