Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2017 disclosed the following: 8.20 notes

[The following information applies to the questions displayed below.)The nete about debt included in the financial statement
[The following information applies to the questions displayed below.)The note about debt included in the financial statement

The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2017 disclosed the following: 8.20 notes due 2010 8.70 notes due 2023 B.954 notes due 2032 8.5 notes due 2040 7.50 notes due 2019 0219, 400,000 $363,200,000 244,000,00 $219,000,000 * 26,900,000 The above table summarizes the long-term debt of the Company at December 31, 2017. All of the notes were originaly issued at their face (maturity) value and have been gradually repaid over time so that these amounts are the remaining balances at this date. Assuming that the notes pay interest annually and mature on December 31 of the respective years. (EV.of S1. EM.olS1. EVA of Si. EVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Suppose that Healdsburg wants to pay off the 8.70% notes on December 31, 2018, (e., five years early) when the going interest rate is 6%, thereby retiring the $363,200,000 in debt. How much would Healdsburg have to pay for the notes (principal only) on this date in order to satisty the noteholders? (Round your final answer to the nearest dollar amount.) [The following information applies to the questions displayed below.) The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2017 disclosed the following: $219,400,000 $363,200,000 $244,000,000 $219,000,000 $ 26,900,000 8.20 notes due 2018 8.70 notes due 2023 8.958 notes due 2032 8.58 notes due 2040 7.50 notes due 2019 The above table summarizes the long-term debt of the Company at December 31, 2017. All of the notes were originally issued at their face (maturity) value and have been gradually repaid over time so that these amounts are the remaining balances at this date. Assuming that the notes pay interest annually and mature on December 31 of the respective years. (FV of $1, PV of $1. EVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Suppose that Healdsburg renegotiates the 8.95% notes on December 31, 2023, when the going interest rate is 6%. Healdsburg agrees to make 12 equal annual installments, commencing on December 31, 2024, rather than pay the annual interest payments and the $244 million in a single amount at maturity. What would the annual payments be? (Enter your answer in whole dollars. Round your final answer to nearest whole dollar.) Annual payments (The following information applies to the questions displayed below.] The note about debt included in the financial statements of Healdsburg Company for the year ended December 31, 2017 disclosed the following: 8.20 notes due 2018 8.70 notes due 2023 8.95 notes due 2032 8.588 notes due 2040 $219,400,000 $363,200,000 $244,000,000 $219,000,000 7.50 notes due 2019 $ 26,900,000 The above table summarizes the long-term debt of the Company at December 31, 2017. All of the notes were originally issued at their face (maturity) value and have been gradually repaid over time so that these amounts are the remaining balances at this date. Assuming that the notes pay interest annually and mature on December 31 of the respective years. (FV of $1. PV of $1, EVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Suppose that Healdsburg enters into a sales contract with an auto manufacturer on January 1, 2018, to provide tires that cost Healdsburg $19.9 million to produce. The buyer offers Healdsburg $6.95 million in cash and agrees to take over only the principal payment on Healdsburg's 7.50% debt notes. Assume that the going market interest is 7% at the time. What would Healdsburg's gross profit be on the sale? (Enter your answer in whole dollars. Round your final answer to nearest whole dollar.) Gross profit

Step by Step Solution

3.32 Rating (149 Votes )

There are 3 Steps involved in it

Step: 1

Solution Healdsburg Company 1 Suppose that Healdsburg want to pay off the 870 notes on December 31 2... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Managerial Finance

Authors: Lawrence J. Gitman, Chad J. Zutter

14th edition

133507696, 978-0133507690

More Books

Students also viewed these Accounting questions

Question

Explain the principles of delegation

Answered: 1 week ago

Question

State the importance of motivation

Answered: 1 week ago

Question

Discuss the various steps involved in the process of planning

Answered: 1 week ago

Question

What are the challenges associated with tunneling in urban areas?

Answered: 1 week ago

Question

What are the main differences between rigid and flexible pavements?

Answered: 1 week ago