Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 8, Problem 16SE
Other long term assets (Learning Objective 8) 5-10 min.
Classify each of the following as:
Trading security (T)
Available-for-sale security (A)
Held-to-maturity security (H)
None of the above (N)
_______ 1. A bond that management plans on owning until it is repaid; management does not believe it will need to sell the bond to generate cash before the bond’s scheduled maturity date
________ 2. Land that management is holding as an investment
________ 3. Intel stock that company management plans on selling quickly as soon as its price is 10 percent more than what the company paid at the time it purchased the stock
________ 4. Ford Motor Company stock; management does not actively manage this stock and intends to sell it only if it needs to generate cash
________ 5. A bond that management plans on owning until it is repaid; however, management believes it may have to sell the bond within the year in order to provide enough cash for operations
________ 6. inventory that management intends to sell within the year
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Students have asked these similar questions
12) Which of the following is NOT a property of Financial assets?
A. Divisibility
B. Reversibility
C. Convertibility
D. Marketability
13) Which of the following security is issued in money market:
A. Common stock
B. Preferred stock
C. Bankers acceptance
D. Commercial bonds
14) The money market is used to issue securities that maturity in:
A. One year
B. Two years
C. Three years
D. Four years
15) The capital market is used to issue securities that maturity in:
A. 3 months
B. 6 months
C. 9 months
D. 15 months
16) All the following factors contribute to the integration of the financial market:
A. Liberalization
B. Technology
C. Institutionalization
D. Democratization
17) Which money market instrument is infrequently traded in the Secondary Market:
A. Treasury bills
B. Commercial paper
C. Certificate of deposit
D. Repurchase agreement
Question A, B and C is required.
Question 3.
Bond Consider a bank with the following balance sheet (M means million):AssetsValueDuration of the AssetConvexity of the Asset5yr bond bought at a yield of 3.4% (lending money)$550M4.562
12.026
12yr bond bought at a yield of 4% (lending money)$800M9.453
53.565
LiabilitiesValueDuration of the LiabilityConvexity of the Liability2yr bond sold at a yield of 2.4% (borrowing money)$300M1.9412.3844yr bond sold at a yield of 2.8% (borrowing money)$500M3.7598.206a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset)
b) Calculate the duration and convexity of the both asset and liability sides;
c) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio;
From page 9-3 of the VLN, what are the cash flows from a bond that must be present valued back to today?
Group of answer choices
A. The face amount only
B. The interest payments only
C. The issue price only
D. The face amount and interest payments
Chapter 8 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQCh. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1SCCh. 8 - Prob. 2SCCh. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SCCh. 8 - Prob. 6SCCh. 8 - Prob. 7SCCh. 8 - Prob. 8SCCh. 8 - Prob. 9SCCh. 8 - Prob. 10SCCh. 8 - Prob. 11SCCh. 8 - Prob. 12SCCh. 8 - Prob. 1SECh. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SECh. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SECh. 8 - Prob. 10SECh. 8 - Prob. 11SECh. 8 - Prob. 12SECh. 8 - Prob. 13SECh. 8 - Prob. 14SECh. 8 - Prob. 15SECh. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SECh. 8 - Prob. 18AECh. 8 - Prob. 19AECh. 8 - Prob. 20AECh. 8 - Prob. 21AECh. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AECh. 8 - Prob. 24AECh. 8 - Prob. 25AECh. 8 - Prob. 26AECh. 8 - Prob. 27AECh. 8 - Prob. 28AECh. 8 - Prob. 29AECh. 8 - Prob. 30AECh. 8 - Prob. 31AECh. 8 - Prob. 32BECh. 8 - Prob. 33BECh. 8 - Prob. 34BECh. 8 - Prob. 35BECh. 8 - Prob. 36BECh. 8 - Prob. 37BECh. 8 - Prob. 38BECh. 8 - Prob. 39BECh. 8 - Prob. 40BECh. 8 - Prob. 41BECh. 8 - Prob. 42BECh. 8 - Prob. 43BECh. 8 - Prob. 44BECh. 8 - Prob. 45BECh. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51APCh. 8 - Prob. 52APCh. 8 - Prob. 53BPCh. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BPCh. 8 - Prob. 56BPCh. 8 - Prob. 57BPCh. 8 - Prob. 58BPCh. 8 - Prob. 59BPCh. 8 - Prob. 1CECh. 8 - Prob. 1CPCh. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIACh. 8 - Prob. 2EIACh. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IACh. 8 - Prob. 1SBACh. 8 - Written Communication A client of yours notified...
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Bond Valuation - A Quick Review; Author: Pat Obi;https://www.youtube.com/watch?v=xDWTPmqcWW4;License: Standard Youtube License