Given below are the present value factors for $1.00 discounted at 10% for one to five...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Given below are the present value factors for $1.00 discounted at 10% for one to five periods. Each of the items 69 to 72 is based on 10% interest compounded annually. Present Value of $1 Periods Discounted at 10% per Period 1 0.909 0.826 0.751 0.683 0.621 If an individual deposits $20,000 in a savings account today, what amount of cash would be available two years from today? a) $20,000 x 0.826 b) $20,000 x 0.826 x 2 c) $20,000 + 0.826 d) $20,000 + 0.909 x 2 For which of the following transactions would the use of the present value of an ordinary annuity concept be appropriate in calculating the present value of the asset obtained or the liability owed at the date of incurrence? a) A capital lease is entered into with the initial lease payment due one month subsequent to the signing of the lease agreement. O b) A capital lease is entered into with the initial lease payment due upon the b) signing of the lease agreement. c) A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 7%. d) A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 9%. Which of the following is FALSE about bonds issued at a DISCOUNT? a) The bonds are issued for an amount under its par value. The book value (carrying value) of the bonds will decrease after each O b) interest period c) At maturity, the book value and the face amount will be equal. 15 d) At the time bonds were issued the market interest rate was higher than the coupon rate of interest stated on the bond 18 Given below are the present value factors for $1.00 discounted at 10% for one to five periods. Each of the items 69 to 72 is based on 10% interest compounded annually. Present Value of $1 Periods Discounted at 10% per Period 1 0.909 0.826 0.751 0.683 0.621 If an individual deposits $20,000 in a savings account today, what amount of cash would be available two years from today? a) $20,000 x 0.826 b) $20,000 x 0.826 x 2 c) $20,000 + 0.826 d) $20,000 + 0.909 x 2 For which of the following transactions would the use of the present value of an ordinary annuity concept be appropriate in calculating the present value of the asset obtained or the liability owed at the date of incurrence? a) A capital lease is entered into with the initial lease payment due one month subsequent to the signing of the lease agreement. O b) A capital lease is entered into with the initial lease payment due upon the b) signing of the lease agreement. c) A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 7%. d) A ten-year 8% bond is issued on January 2 with interest payable semiannually on January 2 and July 1 yielding 9%. Which of the following is FALSE about bonds issued at a DISCOUNT? a) The bonds are issued for an amount under its par value. The book value (carrying value) of the bonds will decrease after each O b) interest period c) At maturity, the book value and the face amount will be equal. 15 d) At the time bonds were issued the market interest rate was higher than the coupon rate of interest stated on the bond 18
Expert Answer:
Answer rating: 100% (QA)
Question 1 Answer c 20000 0826 Explanations In the given table the discounting factors for 10 intere... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Five years after Anne deposited $3600 in a savings account that earned interest at 4.8% compounded monthly, the rate of interest was changed to 6% com- pounded semi-annually. How much was in the...
-
If $800 is deposited in a savings account that pays an interest rate of 5 percent annually, how much money will be in the account after 15 years?
-
If Alysha puts $50,000 in a savings account paying 6 percent per year, determine how much money she will have in total at the end of the first year if interest is compounded: a. annually b. monthly...
-
Given the monthly returns that follow, find the R2, alpha, and beta of the portfolio. Compute the average return differential with and without sign. Do not round intermediate calculations. Round your...
-
The controller of Heritage Ceramics, Inc. wishes to prepare a cost of goods sold budget for June. The controller assembled the following information for constructing the cost of goods sold budget:...
-
Phan Mai is a single taxpayer with two dependent children under age 17. Phan estimates her wages for the year will be $36,000 and her itemized deductions will be $11,000. Assuming Phan files as head...
-
Product mix decision: limited demand (Learning Objective 5) Consider StoreAll in S8-8 . Assume that demand for regular bins is limited to 30,000 units and demand for large bins is limited to 25,000...
-
The oxidation of nitric oxide takes place in an isothermal batch reactor. The reactor is charged with a mixture containing 20.0 volume percent NO and the balance air at an initial pressure of 380 kPa...
-
G Forth of the following 3 federalent aventions of situations, prepare the minoessary jousena crises If no journal entry is required, indicate so by typing " no journal essty required", Transactions...
-
Needing help filling out form 1065, can you please explain what information goes on what line in Form 1065 US Return of Partnership income? (instructions in bold, form attached) (Use the overview and...
-
Research and then discuss the implications of financing through debt as they compare to financing through equity. What are the pros and cons of each method? Which method would you use to raise...
-
ine distribution of the annual incomes of a group of middle-management employees at Compton Plastics approximates a normal distribution with a mean of $47,200 and a standard deviation of $800. (a)...
-
e. Explain the advantages of dry etching and wet etching for semiconductor fabrication processes.
-
5. A rotating component made of 70Cu-30Zn brass is subjected to a fluctuating axial load of +/- 500 N. If the component needs a fatigue life of 105 cycles, what cross-sectional area is required? (3)
-
Let A be the area of the bounded region enclosed by the parabola y = x - 27 and the line y = -6x. Then A= square units
-
In this activity, you will model the impact of extra payments to principal on interest and the life of the loan. Here, we model a borrower who would like to pay off his mortgage early to get out of...
-
If no arrearage on the preferred stock exits, how much in total dividends is paid to each class of stock? Select one: A. \table[[Preferred,Common],[ $960,000 , $360,000
-
A non-charmed baryon has strangeness S = 2 and electric charge Q = 0. What are the possible values of its isospin I and of its third component I z ? What is it usually called if I = 1/2?
-
Refer to the earthquake depths listed in Data Set 16 in Appendix B. Begin with a lower class limit of 1.00 km and use a class width of 4.00 km. Using a very strict interpretation of the requirements...
-
Is the random variable given in Table 5-7 discrete or continuous? Explain. Table 5-7 Number of Girls in Three Births Number of Girls x P (x) 0.125 0.375 0.375 0.125 0
-
In a survey of Americans age 16 years or older, respondents were asked if they texted or e-mailed while driving during the previous 30 days. The results are summarized in the accompanying graph...
-
The Spivak Company was involved in the following treasury stock transactions during 20xx: a. Purchased 80,000 shares of its $1 par value common stock on the market for $2.50 per share. b. Purchased...
-
The Clockwork Corporation had the following stock outstanding from 20x6 through 20x9: Preferred stock: $100 par value, 8 percent cumulative, 10,000 shares authorized, issued, and outstanding Common...
-
Vanowski, Inc., was organized and authorized to issue 10,000 shares of $100 par value, 9 percent preferred stock and 100,000 shares of no-par, $5 stated value common stock on July 1, 20xx....
Study smarter with the SolutionInn App