(a) To calculate: The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent. Introduction: Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

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Answer 1

Question

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

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Assume that the following statements of financial position are stated and a book value. Alpha Corporation Current Assets $15,000 Current Liabilities $5,400 Net Fixed Assets 39,000 Long-Term Debt 10,100   Equity 38,500     $54,000   $54,000 Beta Corporation Current Assets $3,600 Current Liabilities $1,400 Net Fixed Assets 6,700 Long-Term Debt 2,100     Equity 6,800   $10,300   $10,300 Suppose the fair market value of Beta’s fixed assets is $9,500 rather than the $6,700 book value shown. Alpha pays $17,300 for Beta and raises the needed funds through an issue of long-term debt. Construct the post-merger statement of financial position now, assuming that the purchase method of accounting is used.

The shareholders of Barley Corporation have voted in favor of a buyout offer from Wheat Corporation. Information about each firm is given here: Barley Wheat Price/earnings ratio 13.5 21 Shares outstanding 90,000 210,000 Earnings $180,000 $810,000 Barley shareholders will receive one share of Wheat stock for every three shares they hold of Barley. Required What will the EPS of Wheat be after the merger? What will be the P/E ratio if the NPV of the acquisition is 0? What must Wheat feel is the value of the synergy between these two firms? Explain how your answer can be reconciled with the decision to go ahead with the takeover?

Answer 2

Question

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Expert Solution & Answer

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Answer 3

Question

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Answer 6

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Answer 7

Chapter 3, Problem 13PA

Summary Introduction

(a) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 6 percent.

Introduction:

Future value refers to the value that is to be received in future after considering the rate of interest on a particular investment for a number of periods of time. It is the total amount to be received by an investor on his investment after certain period with the component of interest.

Answer 8

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Answer 9

Summary Introduction

(b) To calculate:

The future value of $6,000 when it is invested for 5 years at an interest rate of 6 percent compounded semi annually.

Introduction:

Compounding period can be referred to the time period for which the amount of interest would be added in the amount of principal that has been invested. The compounding period can be defined in annually, semi annually, quarterly or even monthly.

Answer 10

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Answer 11

Summary Introduction

(c) To calculate:

The future value of $6,000 when it is invested for 5 years at an annual interest rate of 12 percent compounded annually and semi annually.

Introduction:

Interest rate refers to the rate of return that an investor will receive on its investment or it can be refer to as the rate of charge that a borrower is liable to pay periodically on his borrowed amount. The change in interest rate results in the change in the amount to be received or to be paid at the end of a period.

Answer 12

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Answer 13

Summary Introduction

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

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Chapter 3 Solutions

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(d) To calculate: The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent. Introduction: Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.

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Chapter 3 Solutions

(d) To calculate:

The future value of $6,000 when it is invested for 12 years at an annual interest rate of 6 percent.

Introduction:

Time horizon refers to the length of a period for which the investment has been made and after which it is expected to receive the total amount on investment.