Essentials Of Investments
11th Edition
ISBN: 9781260316193
Author: Bodie
Publisher: MCG
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Textbook Question
Chapter 1, Problem 7PS
For each transaction, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? (LO 1-2)
a. Toyota takes out a bank loan to finance the construction of a new factory.
b. Toyota pays off its loan.
c. 'Toyota uses $10 million of cash on hand to purchase addiiona1 inventory of spare auto parts.
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Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years.b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,500 shares of Microsoft stock.d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.
25 )
- Classify the following list of items as: revenue/expense/current asset/non-current asset/current liability/non-current liability/capital
a machine for manufacturing widgets
bill of air conditioning used in a factory
sales of 1,000 widgets for cash to Mr. Mohammad, a customer
£3,000 borrowed from the bank
a heap of metal on the yard, to be used for manufacturing widgets
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a Toyota Lexus car, used by an employee but owned by his/her employer, Yen Ltd
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Chapter 1 Solutions
Essentials Of Investments
Ch. 1 - Prob. 1PSCh. 1 - Prob. 2PSCh. 1 - Prob. 3PSCh. 1 - Prob. 4PSCh. 1 - Prob. 5PSCh. 1 - Prob. 6PSCh. 1 - For each transaction, identify the real and/or...Ch. 1 - Prob. 8PSCh. 1 - Lanni Products is u start-.up computer software...Ch. 1 - Reconsider Lanni Products from Problem 9. (LO 1-2)...
Ch. 1 - Prob. 11PSCh. 1 - Examine the balance sheet of commercial banks in...Ch. 1 - Prob. 13PSCh. 1 - Prob. 14PSCh. 1 - Prob. 15PSCh. 1 - Prob. 16PSCh. 1 - Why would you expect securitization o take place...Ch. 1 - Prob. 18PSCh. 1 - Give an examp1e of three financial intermediaries,...Ch. 1 - Firms raise capital from investors by issuing...Ch. 1 - The average rate of return on investments in large...Ch. 1 - Prob. 22PSCh. 1 - Prob. 1WMCh. 1 - Prob. 2WMCh. 1 - Prob. 3WMCh. 1 - Prob. 4WM
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