question#1

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) What is the present value of $34,200 due 11 periods from now, discounted at 4%? (Round answer to 2 decimal places, e.g. 25.25.)

Present value

$enter the present value of the investment discounted at 4% rounded to 2 decimal places

(b) What is the present value of $34,200 to be received at the end of each of 11 periods, discounted at 4%? (Round answer to 2 decimal places, e.g. 25.25.)

Present value

$enter the present value of the investment discounted at 4% rounded to 2 decimal places

question#2

Cullumber Company is considering an investment that will return a lump sum of $942,200, 8 years from now. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount should Cullumber Company pay for this investment to earn an 7% return? (Round answer to 2 decimal places, e.g. 25.25.)

Lincoln Company should pay

question#3

Cullumber Company earns 11% on an investment that will return $456,200 6 years from now. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What is the amount Cullumber should invest now to earn this rate of return? (Round answer to 2 decimal places, e.g. 25.25.)

Cullumber Company should invest

question#4

Sheridan Company is considering investing in an annuity contract that will return $26,450 annually at the end of each year for 20 years. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount should Sheridan Company pay for this investment if it earns an 5% return? (Round answer to 2 decimal places, e.g. 25.25.)

Sheridan Company should pay

question # 5

Sunland Company is about to issue $251,800 of 8-year bonds paying an 9% interest rate, with interest payable semiannually. The discount rate for such securities is 10%. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) How much can Sunland expect to receive for the sale of these bonds? (Round answer to 0 decimal places, e.g. 2,575.)

Sunland can expect to receive

question#6

Suppose McDonalds 2017 financial statements contain the following selected data (in millions).

Current assets		$3,440.0		Interest expense		$488.0
Total assets		29,090.0		Income taxes		1,907.0
Current liabilities		3,032.0		Net income		4,573.0
Total liabilities		17,163.0

Suppose the notes to McDonalds financial statements show that subsequent to 2017 the company will have future minimum lease payments under operating leases of $16,863.0 million. If these assets had been purchased with debt, assets and liabilities would rise by approximately $8,724 million. Recompute the debt to assets ratio after adjusting for this. (Round answer to 0 decimal places, e.g. 62%.) Debt to assets ratio

question#7 case study

Provide an example of the entry to issue a bond at par, the entry for the first 6 months of accrued interest, and the entry for the interest payment. For each 6-month interest payment, explain why the interest expense amount on a bond issued at par is different (or the same) from the interest expense amount for a bond issued at a discount or premium.