A) SWO provides a ten-year warranty with all equipment sales. The warranty covers all defects and breakdowns that are not directly related to regular wear and tear. Based on the experience, SWO estimates the probability of an equipment making a warranty claim during the next 10 year of coverage is as follows:

Year 1	2	3	4	5	6	7	8	9	10
1%	2%	2%	5%	5%	10%	12%	15%	18%	20%

. The average retail value per claim is $100 currently and increases by 3% every year. The average cost of parts and service at SWO is about 60% of the retail value. The effective interest rate is 6%

B) On July 1, 2019, the company issued 20,000 preferred shares for $10 per share to an investment bank. Each preferred share is convertible for a fixed number of common shares and has a mandatory 5% annual dividend that must be paid on December 31 of each fiscal year. These preferred shares must be redeemed by the company for cash if the market price of common shares exceeds $10 per share. Currently, the common shares are in trading range around $6 per share.

1:Prepare report on analyses of the above two accounting issues. Add calculation if need be

2:Also, Calculate Present Value OF TOTAL WARRANTY COST in part A.

Please only answer if certain.

Thanks