Performance City supplies helicopters to corporate clients.i (Click the icon to view additional information.)Requirement a. What is Performance City's weighted average cost of capital?Begin by determining the formula to calculate WACC.New York:XChicago:) + (-(C(Enter the amount as a decimal. Round the WACC to five decimal places, in the format X.XXXXX.)The company's WACC isRequirement b. Compute each division's Economic Value Added.Determine the formula to calculate the EVA of each city. Then enter the amounts for New York and Chicago and calculate the EVA for each. (Entethe WACC to five decimal places in the format X.XXXXX. Round your intermediary calculations to the nearest whole number. Use parentheses ora minus sign when entering a negative EVA. Abbreviation used: inc. = income.)-(x (× (The company's results for 2020 are as follows:(Click the icon to view the data.)Read the requirements.X)) == WACC)) =EVA More infoPerformance City has two sources of funds: long-term debt with a market and bookvalue of $34 million issued at an interest rate of 10% and equity capital that has amarket value of $12 million (book value of $7 million). The cost of equity capital forPerformance City is 16%, and its tax rate is 40%. Performance City has divisions intwo cities that operate autonomously.Data tableOperating IncomeNew York $ChicagoAssets Current Liabilities2,400,0003,600,0002,250,000 $ 12,000,000 $2,900,000 10,500,000X

The weighted average cost of capital of an entity represent the overall cost of capital. The…

Answered: Performance City has two sources of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Easterly City has $47 million of debt recorded in its schedule of changes in long-term obligations, made up of $30 million of general obligation debt, $1 million of compensated absences payable, $4 million of claims and judgments, and $12 million of obligations under capital leases. The state limits the amount of general obligation debt that can be issued by a city to 20 percent of the assessed value of its taxable property. The assessed value of property in Easterly City is $300 million. The city' s legal debt margin is A.) $ 13 million. B.) $ 20 million. C.) $ 30 million. D.) $60 million
As the tax assessor for Indian Creek County, you have been informed that due to budgetary demands, a tax increase will be necessary next year. The total market value of the property in the county is $700,000,000. Currently, the assessment rate is 35% and the tax rate is 30 mills. The county commission increases the assessment rate to 55% and the tax rate to 35 mills. (a) How much property tax (in $) was collected under the old rates? $ (b) How much more tax (in $) revenue will be collected under the new rates? $
Harrison City operates a water utility fund as an enterprise fund. You are provided with the following information for year 2021: 1. The beginning net position balances are net investment in capital assets, S650,000; restricted, S8,000; and unrestricted, S480,000. 2. Bonds in the amount of $200,000 were issued and immediately used to acquire capital assets from the bond proceeds at a cost of $200,000. At the end of year, depreciation on the assets was $10,000. The enterprise fund also had paid back $40,000 of the debt principal. 3. Cash receipts for customer deposits totaled S3,000 for the year. 4. Additional depreciation totaled S12,000. 5. Net income for year 2021 was $300,000 (Note: this amount includes any item that needs to be included in net income from 2. to 4. above) Required: Compute the following items as of December 31, 2021: 1. Net position - net investment in capital assets 2. Net position restricted 3. Net position --- unrestricted
Chesterfield County had the following transactions. A budget is passed for all ongoing activities. Revenue is anticipated to be $939,750, with approved spending of $594,000 and operating transfers out of $275,000. A contract is signed with a construction company to build a new central office building for the government at a cost of $6,000,000. The county previously recorded the budget for this project. Bonds are issued for $6,000,000 (face value) to finance construction of the new office building. The new building is completed. An invoice for $6,000,000 is received by the county and paid. Previously unrestricted cash of $1,350,000 is set aside by county officials to begin paying the bonds issued in (c). A portion of the bonds comes due, and $1,350,000 is paid. Of this total, $235,000 represents interest. The interest had not been previously accrued. Property tax levies are assessed. Total billing for this tax is $885,000. On this date, the assessment is a legally enforceable claim…
As the tax assessor for Indian Creek County, you have been informed that due to budgetary demands, a tax increase will be necessary next year. The total market value of the property in the county is $700,000,000. Currently, the assessment rate is 35% and the tax rate is 40 mills. The county commission increases the assessment rate to 55% and the tax rate to 45 mills. (a) How much property tax (in $) was collected under the old rates? $ (b) How much more tax (in $) revenue will be collected under the new rates? $
1. The debt limit for general obligation debt for Oak City is 1 percent of the assessed property valuation for the city. Using the following information, calculate the city’s debt margin. Assessed property valuation $10,836,621,000 Approved but unissued tax-supported debt 10,000,000 Revenue bonds issued 32,000,000 General obligation serial bonds issued 43,000,000 Capital leases outstanding 5,230,000
Use the formatted answer sheet template provided to analyze the effects of each of transaction on the accounting equations of each fund or nonfund account affected by the transaction. Indicate increases by positive amounts; indicate decreases by putting the amount in parentheses. 1. Beverly County issued at par $20 million of general obligation, 10%, 10-year bonds. The resources are to be used to construct a new civic center downtown. 2. The county paid $100,000 to Fancy Dan Construction Company for work completed during the year. 3. During the year the county transferred $250,000 of general fund cash to the fund from which the bonds are to be repaid. The purpose of shifting the resources was to provide for the principal and interest payments to be made during the fiscal year. 4. $200,000 of the bonds and $20,000 of interest matured and were paid. 2 Fund GCA and GLTL Affected Governmental Funds Nonfund Accounts CA - CL FB GCA-GLTL=NP
City has a population of 50,000. During this fiscal year, the city generated general revenues of $30 million. The primary revenue source is property tax. The taxable property value is $1,250 million. The debt outstanding and the debt service is 37 million and 2.7 million respectively. What is the debt service ratio?
1. The following information is available for the preparation of the government-wide financialstatements for the City of Shortsville for the year ended June 30, 2017: Expenses:General government — $12,900,000Public safety — 21,600,000Public works — 11,100,000Health and sanitation — 5,700,000Culture and recreation — 4,200,000Interest on long-term debt, governmental type — 900,000Water and sewer system — 11,700,000Parking system — 319,000 Revenues:Charges for services, general government — 2,000,000Charges for services, public safety — 430,000Operating grant, public safety — 900,000Operating grant, health and sanitation — 1,400,000Charges for services, culture and recreation — 3,250,000Charges for services, water and sewer — 13,000,000Charges for services, parking system — 400,000Property taxes — 29,300,000Sales taxes — 19,800,000Investment earnings, business-type — 425,000 Other Financing Sources (Uses):Special item-gain on sale of unused land, governmental type — 116,000Transfers from…
The Cane Growers Enterprise (CGE) is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. CGE is an agent of the National Agriculture Association. The Young Famers association controls 25% of CGE. Outside of these powers, its government also provides CGE with monthly subventions to cover its recurrent expenditures based on CGE budgetary demands and the legal allocations by the government.CGE uses ISPAP to prepare its financial statements. You were asked by to government to assist CGE with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASs. Collaborating with a team of qualified and experienced accountants, you were able to prepare the following accounting information of GCE for the year ended December 2022. (see Image) Notes 1. Dividend receivable as at 31 December 2021 was $5,000,000 and Dividend…

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