Question
Please kindly provide the solution / explanation. The following facts apply to Question 1 On 1 January 2011, Company Disney issued bonds with the following
Please kindly provide the solution / explanation.
The following facts apply to Question 1
On 1 January 2011, Company Disney issued bonds with the following features:
-Face value of the bond is $200,000.
-Period to maturity is 10 years.
-Coupon rate is 8% per year.
-Effective interest rate at the date of bond issuance is 10%.
-The bonds pay interest annually on 31 December.
Q1 What is (a) the bond's interest expense for the year ended 2013 and (b) bond carrying value at 31 December 2013?
Q2 In year 2019, the net cashprovided byoperating activities in Disney was $8,000,000. For 2019, depreciation expense was $3,800,000, total current assets (other than cash. decreased by $1,000,000, and total current liabilities decreased by $300,000. Based on the preceding information, what is company Disney's 2019 net income?
MCQ1 Return on assets (ROA) :
a) Will increase as long as operating profit margin increases.
b) Will decrease as long as asset turnover decreases.
c) Is not useful in helping analysts isolate achieved cost reductions.
d) Is useful in helping analysts isolate efficiency gains in asset management.
e) None of the above.
MCQ2 Increasing the average age of property, plant, and equipment on hand:
a) Increases the return on assets and increases the return on common equity.
b) Increases the return on assets and has no effect on the return on common equity.
c) Decreases the return on assets and decreases the return on common equity.
d) Has no effect on either the return on assets or the return on common equity.
e) None of the above.
MCQ 3 Which of the following would best explain anincreasein receivables turnover (defined as revenue divided by accounts receivables?
a) The company adopted new credit policies last year and began offering credit to customers with weak credit histories.
b) The company had wrote off a large amount of its receivables in which no prior provision for bad debts had been made.
c) To match the terms offered by its closest competitor, the company adopted new payment terms now requiring net payment within 90 days rather than 20 days, which had been its previous requirement.
d) All the above statements are correct.
e) None of the above.
1.MCQ 4 All other things being equal, which of the following actions will achieve a company's wish to increase its total liabilities to total assets ratio?
I. Repurchase ordinary shares.
II. Pay more ordinary dividends.
III. Sell accounts receivable at face value.
IV. Perform a "2 for 1" share split for its ordinary shares.
a) I, II, and III
b) I and II
c) I and IV
d) I, II, and IV
e) None of the above
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