x
Info
x
Warning
x
Danger
 / 
 / 
 / 
Short Answer Questions 80. Listed below columns of time value of money

Question : Short Answer Questions 80. Listed below columns of time value of money : 1412658

 

Short Answer Questions
 

80.

Listed below are columns of time value of money tables for the 9% rate, followed by labels for five of the columns. Match the columns with their appropriate labels by placing the letter designating the column in the space provided by the label.

 

 

A

B

C

D

E

F

1

1.090

0.917

1.000

0.917

1.000

1.090

2

1.188

1.759

1.917

0.842

2.090

2.278

3

1.295

2.531

2.759

0.772

3.278

3.573



_____ Present value of an annuity due of $1 _______ Future value of an annuity due of $1 _______ Present value of $1 _______ Future value of $1 _______ Present value of an ordinary annuity of $1


 
 

 

 

 

 

81.

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2015 disclosed the following:

Debt. The following table summarizes the long-term debt of the Company at December 31, 2015. All of the notes were issued at their face (maturity) value.
 

7.25% notes due 2016

$201,335,000

7.75% notes due 2023

$345,154,000

8% notes due 2030

$225,000,000

7.63% notes due 2038

$200,000,000

6.55% notes due 2017

$ 25,000,000



Required: 

Assuming that the notes pay interest annually and mature on December 31 of the respective years, compute the following:

The total cash interest payments in 2016 for these notes.


 
 

 

 

 

 

82.

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2015 disclosed the following:

Debt. The following table summarizes the long-term debt of the Company at December 31, 2015. All of the notes were issued at their face (maturity) value.

 

7.25% notes due 2016

$201,335,000

7.75% notes due 2023

$345,154,000

8% notes due 2030

$225,000,000

7.63% notes due 2038

$200,000,000

6.55% notes due 2017

$ 25,000,000



Required: 

Assuming that the notes pay interest annually and mature on December 31 of the respective years, compute the following:

Suppose that Healdsburg wants to buy back the 7.75% notes on December 31, 2016, (i.e., five years early) when the going interest rate is 6%, thereby retiring the $345,154,000 in debt. How much would Healdsburg have to pay for the notes (principal only)?


 
 

 

 

 

 

83.

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2015 disclosed the following:

Debt. The following table summarizes the long-term debt of the Company at December 31, 2015. All of the notes were issued at their face (maturity) value.

 

7.25% notes due 2016

$201,335,000

7.75% notes due 2023

$345,154,000

8% notes due 2030

$225,000,000

7.63% notes due 2038

$200,000,000

6.55% notes due 2017

$ 25,000,000



Required: 

Assuming that the notes pay interest annually and mature on December 31 of the respective years, compute the following:

Suppose that Healdsburg renegotiates the 8% notes on December 31, 2021, when the going interest rate is 8%. Healdsburg agrees to make 12 equal annual installments, commencing on December 31, 2022, rather than pay the annual interest payments and the $225 million in a lump sum at maturity. What would the annual payments be?


 
 

.

 

 

 

84.

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2015 disclosed the following:

Debt. The following table summarizes the long-term debt of the Company at December 31, 2015. All of the notes were issued at their face (maturity) value.

 

7.25% notes due 2016

$201,335,000

7.75% notes due 2023

$345,154,000

8% notes due 2030

$225,000,000

7.63% notes due 2038

$200,000,000

6.55% notes due 2017

$ 25,000,000



Required: 

Assuming that the notes pay interest annually and mature on December 31 of the respective years, compute the following:

Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2016, to provide tires that cost Healdsburg $18 million to produce. The buyer offers Healdsburg $6 million in cash and agrees to take over only the principal payment on Healdsburg's 6.55% debt notes. Assume that the going market interest is 7% at the time. What would Healdsburg's gross profit be on the sale?


 
 

 

 

 

 

85.

Compute the future value of the following invested amounts at the specified periods and interest rates.

 


Item

Invested
Amount

Invested
Rate

Number of
Periods

a.

$20,000

8%

10

b.

$30,000

4%

8

c.

$10,000

12%

15

 


 
 

 

 

 

 

 

 

Solution
5 (1 Ratings )

Solved
Accounting 1 Year Ago 31 Views
This Question has Been Answered!
Unlimited Access Free
Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Instant Access!
Ask an Expert
Our Experts can answer your tough homework and study questions
150323 Accounting Questions Answered!
Post a Question