Homework Answers
a) Net present value = Present value of cash inflow-Present value of cash outflow
4956.50 = 5000X-21718
-5000X = -26674.50
X(PVAF) = 5.3349
Life expentancy = 8 years
b) Return on equity = Net income/Average equity
0.125 = X/1800000
X (Return for common equity) = 225000
Net income = Return on equity + Preferred dividend = 225000+16000 = 241000
So answer is d) $241000
Add Answer to:
The following information is available for an investment in a new piece of equipment: Cost of...
Determining ending consolidated balances in the third year following the acquisition—Equity method Assume that your company...
Determining ending consolidated balances in the third year following the acquisition—Equity method Assume that your company acquired a subsidiary on January 1, 2017. The purchase price was $900,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Original Amount Original Useful Life Patent $600,000 10 years Goodwill 300,000 Indefinite $900,000 The [A] assets with a useful life have been amortized as part of...
1. Alpha, Inc, acquires 6o'percent of Beta for $414,000 cash on January 1, 2014. The remaining...
1. Alpha, Inc, acquires 6o'percent of Beta for $414,000 cash on January 1, 2014. The remaining 40 percent of Beta traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2014 Beta had the following assets and liabilities Book value Fair value Current assets Land Buildings(net) (six year remaining life Equipment (net) (4 year remaining life) 150,000 200,000 300,000 300,000 280,000-auou 150,000 200,000 360,000 Liabilities -100,000 00,000 The financial statements for the year...
need help... please fix the errors as soon as possible. Thanks in advance! Pushdown Accounting Assume...
need help... please fix the errors as soon as possible. Thanks
in advance!
Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent...
San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of...
San Lucas Corporation is considering investment in robotic machinery based upon the following estimates: Cost of robotic machinery $4,000,000 Residual value 300,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 10% and annual net cash flows of $700,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired...
man L03 43. Determining ending consolidated balances in the second year following the acquisition-Cost method Assume...
man L03 43. Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2018. for $1.200,000. The purchase price was $650,000 in excess of the subsidiary's $550,000 book value of Stockholders' Equity on the acquisi tion date. Of this excess purchase price, $250,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $400,000 was assigned to Goodwill. On the acquisition...
Determining ending consolidated balances in the third year following the acquisition-Equity method Assume that your company...
Determining ending consolidated balances in the third year following the acquisition-Equity method Assume that your company acquired a subsidiary on January 1, 2017. The purchase price was $1,000,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: Original Original [A] Asset Amount Useful Life Patent $700,000 10 years Goodwill 300,000 indefinite $1,000,000 The [A] assets with a useful life have been amortized as part of...
Questions #1 Storey, Inc. is considering the purchase and installation of new manufacturing equipment to replace...
Questions #1 Storey, Inc. is considering the purchase and installation of new manufacturing equipment to replace its old, worn-out equipment. The following information is available. 1. Useful life of the new equipment, 8 years. 2. Cost of new equipment, $3,600,000. 3. Cost to set up new equipment, $200,000. 4. Estimated selling price of the new equipment at the end of its useful life, $60,000. 5. Annual operating savings, $700,000. 6. Working capital investment required, $600,000. This amount will be released...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: $130,000 $80,000 165,000 200,000 355,000 65,000 75,000 Income Statement Sales AR Inventory Investment in...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: $130,000 $80,000 165,000 200,000 355,000 65,000 75,000 Income Statement Sales AR Inventory Investment in...
3. Consolidated Balances (35 points) Parent Company acquires a subsidiary by issuing 100,000 common shares with...
3. Consolidated Balances (35 points) Parent Company acquires a subsidiary by issuing 100,000 common shares with a market value of $25 per share for all of the subsidiary's common stock. The subsidiary's assets and liabilities were recorded at fair values with the exception of equipment undervalued by $225,000. In addition, there were two unrecorded assets: a trademark valued at $175,000 and a customer list valued by the subsidiary at $60,000. The balance sheets of the parent and subsidiary immediately after...
1. Alpha, Inc, acquires 6o'percent of Beta for $414,000 cash on January 1, 2014. The remaining 40 percent of Beta traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2014 Beta had the following assets and liabilities Book value Fair value Current assets Land Buildings(net) (six year remaining life Equipment (net) (4 year remaining life) 150,000 200,000 300,000 300,000 280,000-auou 150,000 200,000 360,000 Liabilities -100,000 00,000 The financial statements for the year...
need help... please fix the errors as soon as possible. Thanks
in advance!
Pushdown Accounting Assume a parent company acquires its subsidiary by paying $1,200,000 for all of the outstanding voting shares of the investee. On the acquisition date, subsidiary's assets and liabilities have individual fair values that equal their book values, except for property equipment with a fair value greater than book value by $150,000 and license with a fair value greater than book value by $250,000. The parent...
man L03 43. Determining ending consolidated balances in the second year following the acquisition-Cost method Assume a parent company acquired a subsidiary on January 1, 2018. for $1.200,000. The purchase price was $650,000 in excess of the subsidiary's $550,000 book value of Stockholders' Equity on the acquisi tion date. Of this excess purchase price, $250,000 was assigned to Property, plant and equipment with a remaining economic useful life of 10 years, and $400,000 was assigned to Goodwill. On the acquisition...
Determining ending consolidated balances in the third year following the acquisition-Equity method Assume that your company acquired a subsidiary on January 1, 2017. The purchase price was $1,000,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: Original Original [A] Asset Amount Useful Life Patent $700,000 10 years Goodwill 300,000 indefinite $1,000,000 The [A] assets with a useful life have been amortized as part of...
Questions #1 Storey, Inc. is considering the purchase and installation of new manufacturing equipment to replace its old, worn-out equipment. The following information is available. 1. Useful life of the new equipment, 8 years. 2. Cost of new equipment, $3,600,000. 3. Cost to set up new equipment, $200,000. 4. Estimated selling price of the new equipment at the end of its useful life, $60,000. 5. Annual operating savings, $700,000. 6. Working capital investment required, $600,000. This amount will be released...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: $130,000 $80,000 165,000 200,000 355,000 65,000 75,000 Income Statement Sales AR Inventory Investment in...
P2-23 Consolidated Worksheet at End of the First Year of Ownership (Equity Method) Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows: $130,000 $80,000 165,000 200,000 355,000 65,000 75,000 Income Statement Sales AR Inventory Investment in...
3. Consolidated Balances (35 points) Parent Company acquires a subsidiary by issuing 100,000 common shares with a market value of $25 per share for all of the subsidiary's common stock. The subsidiary's assets and liabilities were recorded at fair values with the exception of equipment undervalued by $225,000. In addition, there were two unrecorded assets: a trademark valued at $175,000 and a customer list valued by the subsidiary at $60,000. The balance sheets of the parent and subsidiary immediately after...
Most questions answered within 3 hours.
-
The blues made its way into many kinds of music. Eric Clapton,
The Beatles, and Elvis...
asked 24 minutes ago -
If you’re standing at the bottom of a hill and asked to evaluate
it while being...
asked 1 hour ago -
1. Which region has taken the lead in the world of
e-waste handling?
a) European Union...
asked 1 hour ago -
A 8.15- g bullet from a 9-mm pistol has a velocity of 366.0 m/s.
It strikes...
asked 2 hours ago -
The outstanding bonds of Alpha Extracts have a yield to maturity
of 7.4 percent and a...
asked 2 hours ago -
The Problem: The Case of the Harmonizing Vacations
Your CEO is exploring partnering with a European...
asked 4 hours ago -
A chemical equation is balanced by adding coefficients in front
of some formulas so that the...
asked 4 hours ago -
From the literature (reference your sources): What are the
lattice parameters of calcite and aragonite? Why...
asked 4 hours ago -
Your system is rejecting the question am asking which is
preceded by a case study. It...
asked 4 hours ago -
3. On January 2, 2000, Larry creates a trust with himself as
trustee. Larry as trustee...
asked 4 hours ago -
A member of the volleyball team spikes the ball. During this
process, she changes the velocity...
asked 4 hours ago -
Are adult gamers less likely to use a gaming console (Xbox,
PlayStation, Wii, etc...) than teen...
asked 5 hours ago