EBK PRINCIPLES OF CORPORATE FINANCE
12th Edition
ISBN: 9781259358487
Author: BREALEY
Publisher: MCGRAW HILL BOOK COMPANY
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Question
Chapter 2, Problem 21PS
a.
Summary Introduction
To determine: The one year interest rate.
a.
Expert Solution
Answer to Problem 21PS
The one year interest rate is 10.50%.
Explanation of Solution
Determine the one year interest rate
Therefore the one year interest rate is 10.50%.
b.
Summary Introduction
To determine: The two year discount factor.
b.
Expert Solution
Answer to Problem 21PS
The two year discount factor is 0.8190.
Explanation of Solution
Determine the two year discount factor
Therefore the two year discount factor is 0.8190.
c.
Summary Introduction
To determine: The two year
c.
Expert Solution
Answer to Problem 21PS
The two year
Explanation of Solution
Determine the two year
Therefore the two year annuity factor is 1.7240.
d.
Summary Introduction
To determine: The three year
d.
Expert Solution
Answer to Problem 21PS
The three year
Explanation of Solution
Determine the three year
Therefore the three year annuity factor is 2.4650.
e.
Summary Introduction
To determine: The three year discount factor.
e.
Expert Solution
Answer to Problem 21PS
The three year discount factor is 0.7410.
Explanation of Solution
Determine the three year discount factor
Therefore the three year discount factor is 0.7410.
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Problem 2-21 Financial Statements
Use the following information for Ingersoll, Incorporated. Assume the tax rate is 23
percent.
2020
2021
Sales
Depreciation
$ 19,073
$17,436
1,811
1,886
Cost of goods sold
4,729
4,857
Other expenses
1,021
899
Interest
870
1,001
Cash
6,292
6,916
Accounts receivable
8,190 9,877
Short-term notes payable
1,320 1,297
Long-term debt
20,770 25,011
Net fixed assets
51,218 54,723
Accounts payable
4,624 5,094
Inventory
14,538
15,438
1,700 1,768
Dividends
Prepare a balance sheet for this company for 2020 and 2021. (Do not round
intermediate calculations.)
Cash
Assets
Accounts receivable
Inventory
INGERSOLL, INCORPORATED
Balance Sheet as of December 31
2020
2021
$
6,292 $
6,916
8,190
9,877
14,538
15,438
Drov
14 of 20
Ne
Chapter 2 Solutions
EBK PRINCIPLES OF CORPORATE FINANCE
Ch. 2 - (FV) In 1880, five aboriginal trackers were each...Ch. 2 - Prob. 2SQCh. 2 - (PV) Your company can lease a truck for 10,000 a...Ch. 2 - (RATE) Ford Motor stock was one of the victims of...Ch. 2 - Prob. 5SQCh. 2 - Prob. 6SQCh. 2 - Prob. 7SQCh. 2 - (NOMINAL) What monthly compounded interest rate...Ch. 2 - Opportunity cost of capital Which of the following...Ch. 2 - Opportunity cost of capital Explain why we refer...
Ch. 2 - Prob. 3PSCh. 2 - Compound interest New Savings Bank pays 4%...Ch. 2 - Compound interest In 2017, Leonardo da Vincis...Ch. 2 - Future values If you invest 100 at an interest...Ch. 2 - Prob. 7PSCh. 2 - Future values In the five years preceding the end...Ch. 2 - Discount factors a. If the present value of 139 is...Ch. 2 - Prob. 10PSCh. 2 - Prob. 11PSCh. 2 - Present values What is the PV of 100 received in:...Ch. 2 - Prob. 13PSCh. 2 - Present values A factory costs 800,000. You reckon...Ch. 2 - Present values Recalculate the NPV of the office...Ch. 2 - Present values and opportunity cost of capital...Ch. 2 - Perpetuities An investment costs 1,548 and pays...Ch. 2 - Perpetuities You have just read an advertisement...Ch. 2 - Growing perpetuities A common stock will pay a...Ch. 2 - Prob. 20PSCh. 2 - Prob. 21PSCh. 2 - Annuities Kangaroo Autos is offering free credit...Ch. 2 - Annuities David and Helen Zhang are saving to buy...Ch. 2 - Prob. 24PSCh. 2 - Annuities Several years ago, The Wall Street...Ch. 2 - Prob. 26PSCh. 2 - Prob. 27PSCh. 2 - Prob. 28PSCh. 2 - Prob. 29PSCh. 2 - Annuities due A store offers two payment plans....Ch. 2 - Amortizing loans A bank loan requires you to pay...Ch. 2 - Amortizing loans Suppose that you take out a...Ch. 2 - Future values and annuities a. The cost of a new...Ch. 2 - Prob. 34PSCh. 2 - Growing annuities You are contemplating membership...Ch. 2 - Prob. 36PSCh. 2 - Growing perpetuities and annuities Your firms...Ch. 2 - Compounding intervals A leasing contract calls for...Ch. 2 - Compounding intervals Which would you prefer? a....Ch. 2 - Compounding intervals You are quoted an interest...Ch. 2 - Prob. 41PSCh. 2 - Continuous compounding How much will you have at...Ch. 2 - Continuous compounding The continuously compounded...Ch. 2 - Prob. 44PSCh. 2 - Annuities Use Excel to construct your own set of...Ch. 2 - Declining perpetuities and annuities You own an...
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