Q: Define Long-term debt. Explain the types of Long-term debt.
A:
Q: The contract rate is above the market rate. The contract rate is equal to the market rate.
A: The correct answer is option (a) The contract rate is above the market rate.
Q: What is equivalent annual annuity (EAA) method?
A: Equivalent annual annuity (EAA): Equivalent annual annuity measures the annual payments a scheme…
Q: What are Contingent Liabilities? Give an example. What are the factors that determine the reason…
A: A liability, the occurrence of which is uncertain that is it may or may not occur is known as a…
Q: What comprises a lessee’s minimum lease payments? What is excluded?
A: A lease is a contractual obligation under which one party (lessee) uses the assets or resources of…
Q: The ability to meet short term obligations is termed
A: A short-term liability is referred to as the financing obligation that being liable to an…
Q: The formula in getting the compound interest given the present value and maturity value is…
A: Compound interest : Compound interest can be understood as the transfer of interest, or, in specific…
Q: A contingent liability is an obligation that depends on the occurrence of a future event and that…
A: A contingent liability means a type of liability which probably occur depending on certain future…
Q: Assuming the investment is appropriately recognized as financial assets at amortized cost: How much…
A: A bond is a kind of debt financial instrument that is being issued by corporations and the…
Q: If interest-bearing obligations are issued between interest payment dates, the accrued interest sold
A: Interest-bearing obligation- It refers to a Debt instrument issued by the company, where repayments…
Q: . The Lease Liability account should be presented as * O all current liabilities. O deferred…
A: The lease liability is the financial obligation for lease payments recorded at present value for the…
Q: Briefly describe how the concept of the time value of money is incorporated intothe valuation of…
A: Time value of money: Time value of money refers to the concept that the value of money available at…
Q: A. It is probable that an outflow of economic benefits will be required to settle an obligation B.…
A: Option D
Q: Which of the following is not a condition necessary to exclude a short-term obligation from current…
A: SHORT-TEAM OBLIGATIONS: Debt, also called current liabilities, is a firm's financial obligations…
Q: Which of the following payment/s is/are included along with lease liability? a- All of them b-…
A: According to IAS 17, LEASES, There are two types of Leases: 1. Finance Lease 2. Operating Lease
Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…
A: The percentage of completion method is an accounting technique in which long-term deed income and…
Q: Under what conditions should a short-term obligation beexcluded from current liabilities?
A: Current liabilities: The debt obligations owed by a company to creditors and suppliers and are to be…
Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…
A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…
Q: A) Explain under which conditions the uncovered interest rate parity condition could be expressed as…
A: According to the notion of uncovered interest rate parity (UIP), the difference in interest rates…
Q: Current liabilities normally are recorded at their: Select one: O a. Expected value. O b. Present…
A: Current liabilities are the financial obligations of the company which are required to be settled…
Q: Write an equation for determining the value of the series of end-of-period payments?
A: Formula:
Q: A contingent liability: O Is always of a specific amount Is a potential obligation that depends on a…
A: Solution: A contingent liability is a liability that may occur depending on the outcome of an…
Q: What amount should be recognized as annual lease rental payable in advance required to yleld the…
A: Lease refers to a contract between two parties under which one party who is the real owner of an…
Q: Describe Short-Term Obligations Are Expected to Be Refinanced.
A: Refinancing refers to the process where revival of interest rate, payment schedule and terms of…
Q: Describe the obligations of long term liabilities.
A: Long-term liabilities: Long-term liabilities are obligations that the company needs to pay after at…
Q: Interest payable is shown on the Oincome statement as an operating exp Obalance sheet as a long-term…
A: Interest payable is a liability account, shown on a company's balance sheet, which represents the…
Q: What are the two types of losses that can become evidentin accounting for long-term contracts? What…
A: The two types of losses that can become evident while accounting for long-term contracts are:(1) A…
Q: The contractual interest rate is alway state as a
A: Contractual Interest Rate Contractual interest rate refer as the rate which helps to determine the…
Q: The forward contract price, established when the contract is initiated at t = 0, is denoted as…
A: Forward Price: It refers to the contract price of an underlying financial asset or commodity that is…
Q: How much is the contract revenue to date in the year 2019? (In a good accounting form)
A: A company has to recognize revenue and expenses in the year they are earned and incurred,…
Q: Under IFRS, in computing the present value of the minimum lease payments, the lessee should:(a) use…
A: Minimum lease payment: An amount which is payable to the lessor by the lessee when the lease…
Q: Which of the following ratios would be most useful in determining a company’s ability tocover its…
A: Fixed-charge coverage ratio (FCCR): The FCCR tests the capacity of a corporation to meet its fixed…
Q: Explain how to account for revenue on a long-term contract over time as opposed to at a point in…
A: The revenue recognition principle: The revenue recognition principle refers to the revenue that…
Q: choose the right answer e debts which are to be repaid within a short period (a year or less) are…
A: Liabilities: Liabilities refers to the financial obligation of the business it does not include…
Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…
A: Long term contracts are those contracts which are related to construction of building. Usually long…
Q: Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the…
A: Revenue recognizes steps: Identify the contract with a customer Identify the performance…
Q: gent liab
A: Contingent Liability A contingent liability is an obligation that may arise as a result of the…
Q: Describe the terms of Contingent Liabilities with examples.
A: Contingent liability: This is an uncertain obligation that might be incurred on a future date as a…
Q: The forward contract value today is denoted as a.Vo(0,T) b.Fo(0,T) c.So(1 + r)^T d.Fo(0,T)/(1 +…
A: Forward contracts are buy or sell agreement between two parties that specify the exchange of asset…
Q: e contract revenue yo da
A: The percentage of completion method is a method of recognizing revenue of long-term contract or…
Q: W TO Find the refund fraction for the interest refund.
A: Some time the loans are paid before the day of expiration of loan than we need to find out the…
Q: . Which of the following may not be equal to the contract rate of interest? a. stated rate b.…
A: Contract rate of interest is the defined rate of interest on bonds, notes or loan.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
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- On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = FV = (b) The present value of the note was (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method.On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = Answer 1 Question 4 I/Y = Answer 2 Question 4 PMT = $Answer 3 Question 4 FV = $Answer 4 Question 4 (b) The present value of the note was $Answer 5 Question 4 (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method. Ace Company Schedule of Note Discount/Premium Amortization Effective Interest Method Date Cash Interest Amortized Amount Carrying Value of Note Jan 1, 2022 $Answer 6 Question 4 Dec 31, 2022 $Answer 7 Question 4 $Answer 8 Question 4 $Answer 9 Question 4 Answer 10 Question 4 Dec 31,…Equity bank grants you a loan of 49,800 on 1 january 2022 that is repayable in 5 annual payments of 13815 at an Interest rate of 12% per annum. Construct arnortization schedule using excel and calculate total interest?
- Determine the value of the single payment on November 8, 2023 that is economically equivalent to a payment stream consisting of: ● a payment of $10,670 on April 3, 2023, . a payment of $9,970 on September 6, 2023, ● a payment of $8,250 on January 31, 2024. Assume a simple interest rate of 3.1%. Apr. 3, 2023 $10,670 FV2 = $ FV1 = $ PV3 = $ Start by calculating the following values on the time diagram: Sep. 6, 2023 Total = $9,970 The single payment on November 8, 2023 is: $ Nov. 8, 2023 + FV2 FV1 + PV3 Total Jan. 31, 2024 $8,250On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = Answer 1 Question 3 I/Y = Answer 2 Question 3 PMT = $Answer 3 Question 3 FV = $Answer 4 Question 3 (b) The present value of the note was $Answer 5 Question 3 (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method. Slack Company Schedule of Note Discount/Premium Amortization Effective Interest Method Date Cash Interest Amortized Amount Carrying Value of Note Jan 1, 2022 $Answer 6 Question 3 Dec 31, 2022 $Answer 7 Question 3 $Answer 8 Question 3 $Answer 9 Question 3 Answer 10 Question 3 Dec 31,…At the end of 2020, the business has a notes payable with maturity value of TL18.000. The maturity date of the note is April 30, 2021. If the discount rate is 15%, what is the present value of the note on December 31, 2020 by using maturity value method? a.TL17.100 b.TL15.300 c.TL17.325 d.TL17.143
- On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = _________________ I/Y = ___________________ PMT = ______________________ FV = $______________ (b) The present value of the note was $________________ (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method.Based on the depositors rate of return as the following tableDeposit TypesRate of return6 months & less6%9 months & less3%12 months & less5%More than 12 months4%determine the profit attributable to the ( A ) depositor who invested OR 44500 from 1st. January 2018 to 15 August 2019Assume a face value of $10,000 a. Calculate the ask price of the Treasury bill maturing on 27 February 2020, as of December 27, 2019 b. Calculate the bid price of the Treasury bill maturing on 04 June 2020, as of December 27, 2019. (For all requirements, use 360 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g. 32.16)) a Treasury bill ask price b. Treasury bill bid price Amount
- On November 17, 2020 a sum of $42,200 was deposited into an account. What would be the future value of this sum of money on March 18, 2024, if the interest rate is 3.15% compounded semiannually. Round the value for FV to two decimal places. P/Y = C/Y = DBD = days I/Y = % PV = $ PMT = $ FV = $A customer is offered an investment where interest is calculated according to the force of interest,t {0.02t 0 ≤ t ≤ 3, 0.045 t > 3If the customer invest GH¢1000 now, what rate of interest, compounded quarterly is earned over the first 4 year period.On January 1,2022, Ace Company finished landscaping services and accepted in exchange a 10% $400000 promissory note with a due date of December 31,2024. Interest is receivable at December 31 each year. Notes with similar risks have a market rate of interest of 5%. (A.) Determine the value of the following N, I/Y, PMT, FV. B The present value of the note was $_______. (C) Prepare a schedule of Note Discount/Premium Amortization for Ace Company under the effect interest method