Determine the amount of long-term debt for ABC Co. using the following balance sheet information: cash balance of $24,700, accounts payable of $96,526, common stock of $401,347, retained earnings of $501,930, inventory of $205,420, other assets equal to $77,911, net plant and equipment of $706,520, short-term notes payable of $30,000, and accounts receivable of $142,714. Long-Term Debt

Determine the amount of long-term debt for ABC Co. using the following balance sheet information: cash balance of $24,700, accounts payable of $96,526, common stock of $401,347, retained earnings of $501,930, inventory of $205,420, other assets equal to $77,911, net plant and equipment of $706,520, short-term notes payable of $30,000, and accounts receivable of $142,714. Long-Term Debt

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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For the next two questions, a "+" sign is optional for any answer that is a net cash inflow, but a "-" sign is mandatory for any answer that is a net cash outflow. Reebok Ltd is purchasing a $7.7 million machine, which will cost the firm an additional $46,000 to have the machine transported and installed ready for use. The machine is depreciated to a value of zero over a tax life of 4 years via the straight-line method. It will also be worthless in the salvage market at this time. The machine is expected to generate incremental revenues of $4.4 million per year for the firm while also causing incremental costs of $1.6 million per year. Reebok's marginal tax rate is 37.5%. You are forecasting incremental free cash flows for Reebok Ltd (a) What is the incremental free cash flow associated with the new machine at t=0? The free cash flow at t=0 will be $ (Round your answer to the nearest dollar) (b) What is the annual incremental free cash flows each year from t=1 to t=4? The annual free…
2. A warehouse owned by Martha and used in her business (i.e., to store inventory) is being condemned by the city to provide a right-of-way for a highway. The warehouse has appreciated by $180,000 based on Martha’s estimate of its fair market value. In the negotiations, the city is offering $35,000 less than what Martha believes the property is worth. Alan, a real estate broker, has offered to purchase Martha’s property for $20,000 more than the city’s offer. Martha plans to invest the proceeds she will receive in an office building she will lease to various tenants. Identify the relevant tax issues for Martha. Would the answer in part (1) change if Martha’s warehouse was property being held for investment rather than being used in her business? Explain.
On August 1 of year 0, Dirksen purchased a machine for $26,250 to use in its business. On December 4 of year 0, Dirksen sold the machine for $22,250. Use MACRS Table. (Loss amounts should be Indicated by a minus sign. Do not round percentages used for calculations. Round other Intermediate computations to the nearest whole dollar amount. Leave no answer blank. Enter zero If applicable.) a.) What are the amount and character of the gain or loss Dirksen will recognize on the sale? Description Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) $1231 gain/(loss) Amount $(4,000) b)b. What are the amount and character of the gain or loss Dirksen will recognize on the sale if the machine is sold on January 15 of year 1 instead? Description Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) $1231 gain/(loss) Amount
MIRR unequal lives. Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1,470,000 with cash flows over the next six years of $240,000 (year one). $280,000 (year two), $280,000 (years three through five), and $1,700,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: an initial cost of $2,450,000 with cash flows over the next four years of $360,000 (years one through three) and $3,120,000 (year four), at which point Grady plans to sell the facility. The appropriate discount rate for the restaurant is 9.5% and the appropriate discount rate for the sports facility is 11.5%. What are the MIRRS for the Grady Enterprises projects? What are the MIRRS when you adjust for the unequal lives? Do the MIRR adjusted for unequal lives…
(a) What is the weighted average of accumulated expenditures? (b) What is the avoidable interest for the building in 2018?
If I have a machine that I purchased for $50,000. I'be recorded depreciation of $28,000. I sell the machine for $25,000. how would I record the sale? How would MY entry change if I sold the machine for $15,000 rather than $25,000?
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