The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?

The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?

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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An uninsured patient cannot pay for a major life threatening surgery. ABC Health offers the patient long term financing where the entire amount can be paid in full for 3 years. The cash price of the surgery is $100,000.00 and a contract is issued with an implicit rate of 5.5% Beginning Ending Year 1 2 3 Accounts Instructions A. Record the journal entry as of the surgery date Accounts $100,000.00 Accounts $111,303.00 Accounts Debit Accounts B. At the end of the first year ABC recognizes interest associated with the loan Debit $105,500 Debit Interest C. At the end of the second year ABC recognizes interest associated with the loan Debit $5,500 $5,803 $6,122 Debit Credit D. At the end of the third year ABC recognizes interest associated with the loan Credit Credit Credit E. The patient pays the full amount of the loan receivable at the end of the third year Credit $105,500.00 $ 111,303.00 $ 117,425.00
Dog Quaker State Incorporated offers a new employee a single-sum signing bonus at the date of employment. Alternatively, the employee can receive $8,300 at the date of employment plus $23,000 at the end of each of his first four years of service. Assuming the employee's time value of money is 10% annually, what lump sum at employment date would make him indifferent between the two options?
DITO Corp. a telecommunications operator, entered into a one-year contract with Kim on March 1, 20x7. In lined with the contract, Kim receives a free Apple I-phone handset from DITO, Kim will pay a monthly fee of P1,200. Kim gets the handset immediately after contract signature. DITO sells the same handset for P3,600 and the same monthly plans for P800 per month without handset. Allocate the transaction price to the performance obligations: the allocated transaction price to each performance obligations? a. None, since there is no contract b. P9,600 network service and P3,600 for Apple I-phone Handset c. P0 for network service and P13,200 for Apple I-phone Handset d. P10,473 network service and P3,927 for Apple I-phone Handset
Suraya wants to Buy a building. He went to apply financing with standard chartered. After proper assessment, standard chartered bank provides a financing facility under Murabahah to the Purchase Orderer principle. Financing amount: RM800,000 Rate of return: 8.2% Financing tenure: 10 years At the end of the contract, Suraya still has an outstanding amount of RM40,000. As part of condition of the Murabahah contract, Suraya will be charged an annual penalty fee of 4% for any outstanding amount due and the amount will be donated to charitable organisation. Question: (a) Record journal entries to record all of the above transactions in standard chartered bank's books (Please show your workings/calculations).
Please list all of the journal entries for 2022 the OHIO Contract. Your company name is PP. See below information: Ohio Contract On September 7th of the current year (2022), PP signed a contract with Ohio Contract, a large city in the northeast. PP will provide Ohio with 2,470 scooters for $855 each. Each of the scooters is included in a service agreement, whereby PP will provide all maintenance on the scooters for 3 years. In addition, it will provide labor at no charge for these repairs. At the time of the repair, PP will bill Ohio for the parts needed to accomplish the repair. Ohio paid WTG on September 7th of the current year. PP will deliver 665 scooters on October 1 of the current year, 875 scooters on January 1 of next year, and 930 scooters on April 1 of the next year. Because of the size of Ohio, and its potential to buy many more scooters, PP offers them a volume discount, based on how many scooters they purchase between September 7th of the current year and December 31st of…
SmaGlo, Inc., a telecommunications operator, entered into a contract with Kim Dorothy on March 1,20x7. In line with the contract, Kim Dorothy subscribes for SmaGlo's monthly plan for 12 months and in retum Kim Dorothy receives a free Apple I-Phone handset from SmaGlo. Kim Dorothy will pay a monthly fee of P1,200. Kim Dorothy gets the handset immediately after contract signature. SmaGlo sells the same handsets for P2,400 and the same monthly plans for P800 per month without handset. On March 31,20x7, the amount of accounts receivable to be recorded A. 1,200 B. None
Rakesh
A rookie of a professional sport is negotiating his first professional contract. His opportunity cost is 10%. Hehas been offered three possible 4-year contracts. Payments are guaranteed, and they would be made at the end ofeach year. Terms of each contract are as follows:YearsS 1 2 3 4 dContract 1 $3,000,000 $3,000,000 $3,000,000 $3,000,000Contract 2 $2,000,000 $3,000,000 $4,000,000 $5,000,000Contract 3 $7,000,000 $1,000,000 $1,000,000 $1,000,000As his adviser, which contract would you recommend that he should accept?
William Corp. enters into a contract with a customer to build an apartment building for $1,056,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $136,200 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $45,400 each week that completion is delayed. William commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2026 August 8, 2026 August 15, 2026 After August 15, 2026 Transaction price $ Probability LA 70 % 20 Determine the transaction price for this contract. 5 5 SUPPORT
Velocity, a publicly traded corporation with a calendar fiscal year, entered into an agreement with Wedding Planners, Inc. a wedding event planning company on February 14, 2022. The contract specifies that the services will begin on March 1, 2022. Velocity will design a marketing strategy to increase “hits” on Wedding Planners website by 40%. The contract will last for 3 months (though May 31, 2022). Wedding Planners promises to pay $25,000 at the beginning of each month for Velocity’s services with the first payment on March 1, 2022. At the end of the contract, Velocity will be entitled to an additional $15,000 bonus, depending on whether traffic on Wedding Planners’ website has increased by the desired 40%. At the inception of the contract, Velocity estimated there is an 85% chance that they will earn the $15,000 bonus and 15% likelihood they will not. These probabilities are based on past experience with similar projects and the company has significant experience in these…
GerrinAL sells five machines to VernAL for $500,000 per machine, the list price for the machines is $600,000. In a separate contract they sell maintenance services on the five machines for the first year. They charge $12,000 per machine for the maintenance, the list price for maintenance on the machine. As an incentive to sign the maintenance contract, GerrinAL gives VernAL a 25% discount on the purchase of machines in the next 75 days. No discounts are granted to other customers and they project there is 41% probability they will use the discount to purchase one machine with a stand-alone selling price of $600,000. What is the approximate contract consideration allocated to the discount? Select one: a. $150,000 b. $120,000 c. zero d. $50,000 e. $61,500
Sanjeev enters into a contract that pays him $1,000 each month for six months of continuous consulting services. In addition, there is a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev used the most likely amount to determine transaction price. After Sanjeev has recognized revenue for two months of the contract, he changes his assessment of the chance the contract will pay him $3,000 up to 70%. How much revenue would Sanjeev recognize in the third month of the contract? $2,500 O $1.500 $1,850 O $1,600

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