1. The following is the balance sheet for Crown-well Inc. for the period ending December 2011: Crown-well...
Question:
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1. The following is the balance sheet for Crown-well Inc. for the period ending December 2011:
Crown-well Inc. Balance Sheet (2011) Cash $ 24,000 Current Liabilities $ 30,000 Other current assets 51,000 Long-Term Notes payable 33,000 Total current assets 75,000 Bonds 40,000 Investments 40,000 Common Stock 150,000 Fixed Assets(Net) 125,000 Retained Earnings 49,000 Land 62,000 $ 302,000 $ 302,000
The following transactions occurred during 2012:
i. $20,000, sale on some of its investments ii. $12,000, additional land for expansion iii. $10,000, bonds payment iv. $20,000, issuance of common stock v. $5,000, dividend payment to stockholders vi. $42,000, Net Income for 2012 vii. $18,000, depreciation viii. $10,050, taxes ix. $10,000, Interest expense x. $18,000, purchase of second piece of land, using $12,000 in bonds and $6,000 in longterm notes payable.
Required:
a) Prepare a balance Sheet for Crown-well Inc. as at period ending 2012. (5 POINTS)
b) Compute the firm?s free cash flows for 2012. (Hint: In computing FCF, please consider changes in investments and changes in Land as separate items from the Net Fixed Asset in the balance sheet). (5 POINTS)
2. Differentiate between current yield, Yield to Maturity, and Yield to Call.(2 POINTS)
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