ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the interest expense of ABC for the whole term of the loan
Q: How well do portfolio theory and capital market theory work for commercial real estate? Explain.
A: Modern portfolio theory, often known as mean-variance analysis, is a mathematical framework for…
Q: 59. Modified True or False T means Correct and F means Wrong Scenario: If you have a series of…
A: Cash flow is the inflow and outflow of cash in the business. It is real or virtual movement of money…
Q: A corporation uses the indirect method of preparing the statement of cash flows. A fixed asset has…
A: Solution:- Cash flow statement is that part of financial statements that represents the total net…
Q: Elearning Company would like to develop its technology process by purchasing a production equipment…
A: Net present value is the difference between the present value of cash inflows and present value of…
Q: On the basis of the two stocks' expected and required returns, which stock would be more attractive…
A: Here,
Q: Currently the risk-free rate equals 5% and the expected return on the market portfolio equals 11%.…
A: Given: Risk free rate “Rf” = 5% Market return “Rm” = 11% Stock A Beta = 1.33 Stock B Beta = 0.7…
Q: What is Alyssa's equity in the house?
A: Loan Amount: It is the amount given to the borrower from the bank and the bank charges interest on…
Q: ould it sell for in order to yield a 7.5% nominal return on the investment? O $522,150 O $542,487…
A: Price today is the present value of of coupon payment plus present value of future prices after 9…
Q: (b) Assume you can borrow $100,000.00, using covered interest arbitrage for a 30- day investment,…
A: Given, (b) Here, we have to find out the arbitrage value after 30 days. The working is done…
Q: $ 143 is placed in an account that earns a nominal 8 percent interest, compounded quarterly.…
A: Initial Deposit (IV) = $143 Interest rate = 0.08 Quarterly interest rate (r) = 0.02 (i.e. 0.08 / 4)…
Q: 22. You plan to purchase a property which has an expected NOI of $200,000. You plan to borrow…
A: DCR stands for debt coverage ratio. This ratio is used to measure the ability of a project to use…
Q: Hanging Valley plc has issued share price of 2m ordinary shares, nominal value £1. The board of the…
A: It is given that:ordinary shares – £2,000,000 Right issue - 1:4 shares No of shares = 2,000,000…
Q: VR-X issued 100,000 common stocks at par value of $12 to expand its business 3 years ago specialized…
A: The price of stock can be calculated based on the future dividends and can be calculated as the…
Q: (c) Company X plans to purchase a methanol plant for $1 million. The plant is expected to generate…
A: Net present value is the difference between the present value of cash flow to the initial investment…
Q: Use the sinking fund formula shown to the right to determine the monthly payment needed to…
A: As per the given formula A(r/n) = 340,000(5%/12) =340,000(0.0041667) =1416.667 [(1+(r/n))n*t ] - 1…
Q: “Investors engage in forward exchange transactions to hedge against foreign currency risk. EXPLAIN…
A: A futures contract is a customized contract between two parties to buy or sell an asset at a price…
Q: The following information related to the Postretirement Benefits (health) for the Union Company on…
A: Here, To Find: Part a. Calculate the EPBO at end of 2021 =? Part b. Calculate accumulated…
Q: Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage…
A: Accounting rate of return can be calculated as: = Net Income / Average Investment It does not take…
Q: On April 5, Jessica had a balance due on her credit card of $927.85. From April 5 through May 4,…
A: Here, Previous Balance is $927.85 Additional Charges is $335.66 Payment is $700 Interest Rate per…
Q: ent unir payment A 24000 18000 12000 6000 good 1 2 4 3.
A: When the present value of unequal cash flows is divided by the present value annuity factor it is…
Q: P240,000 will be deposited in a fund at the beginning of each six months for 5 yrs. Using 11% as the…
A: Semi annual deposit = P = P240,000 Interest rate = 11% Semi annual interest rate (r) = 11%/2 = 5.50%…
Q: When a client feels understood by the financial planner, The client is more understanding of the…
A: Understanding a financial plan means that the client has understood how the plan will go, what its…
Q: The following financial information was provided by Anya Company: Net Income 8,255,000.00…
A: Net profit margin depends on sales and net income and all these are quite interrelated to each…
Q: If POST is 1234 and FLIRT is 56784, what is FROST? 58234 58243 43285 52384
A: Data given: If POST = 1234 FLIRT=56784 Workings P=1 O=2 S=3 T=4 F=5 L=6 I=7 R=8 T=4
Q: Automatic dividend reinvestment O is a requirement of all mutual fund companies. compounds share…
A: Dividend is a return which is earned from investment made in shares. Generally dividend is provided…
Q: What is the rate-of-return on assets if the growth rate is 9.5%?
A: retained earnings = 90500*(1-15%) = 76925 net income = 76925*(1+9.5%)= 84232.875
Q: Use the information below provided by Angel Baby Angel Company: Sales 8,250,000.00 Operating…
A: Data given: Net operating profit =$ 3,525,000.00 Tax rate = 40% Interest expense=$ 1,750,000.00 WACC…
Q: Find the payment necessary to amortize a 6% loan of $100,000 compounded annually, with 11 annual…
A: Loan amount = $100,000 Interest rate = 0.06 (i.e. 6%) Loan period = 11 years Annual payment = ?
Q: An engineer planning for retirement is considering purchasing a bond that has a face value of…
A: A bond is a debt instrument used to raise capital. It can be traded on the secondary market.
Q: in profit oon vou oarn on $10 500 utilizing covered interest arbitrage?
A: given r c = 4.57% r u = 2.73% arbitrage profit = amount *can/$ *(1+r c)/forward rate -(amount…
Q: NCC Corporation is considering building a new facility in Texas. To raise money for the capital…
A: Break point is the point and the dollar amount for the purchase of mutual fund shares and bonds , It…
Q: sty needs to have $20,000 at the end of 6 years to fulfill her goal of purchasing a small…
A: Compound interest is determined by multiplying the starting principal balance by one and then…
Q: A $300,000 issue of eleven-year bonds redeemable at par offers 6.19%…
A: Bond valuation involves five components – coupon rate, yield, present value, future value and time…
Q: Two mutually exclusive investment altematives for implementing an office automation plan in an…
A: Incremental IRR analysis It is an analysis of the return over venture finished with an intend to…
Q: Pfizer Manufacturing just issued a bond with a $1,000 face value and a coupon rat of 8%. If the bond…
A: Face value = $1000 Coupon rate = 8% Annual coupon amount (C) = 1000*0.08 = $80 Years to maturity (n)…
Q: PROBLEM: 1. What is the current value of the Php 200 payment to be made at the end of each of the…
A:
Q: se your own word to explain the spot versus Futures prices. a. what is Backwardation b. What is…
A: The spot prices and future prices may be in upward trend or may be in downward trend and depending…
Q: When the economy is weak, money is spent freely on needs and wants. True False
A: An economy is a large set of interrelated production, consumption, and exchange activities that help…
Q: Martinez Co. borrowed $71,059 on March 1 of the current year by signing a 60-day, 5%, interest-…
A: Solution:- Interest bearing note is a short term source of finance, from which funds are raised for…
Q: Your brother borrowed from your neighbour ₱7,000 to buy a new mobile phone. The neighbour charged…
A: Given: Amount borrowed = ₱7,000 Interest rate = 11% Period = 3years
Q: You are an investment adviser. One of your clients approaches you for your advice on investing in…
A: An equity share, also known as an ordinary share, is a fractional ownership that commences the…
Q: The balance sheet showed the following: Total current assets $3,250, accounts payable $470, 8% notes…
A: Current assets = $3250 Accounts payables = $470 Accrued wages = $180
Q: A UK-based MNC has a contract to import raw materials in which it agreed to pay in Philippine peso.…
A: Since you have posted multiple questions, we shall be solving the first one for you as per our…
Q: What are BreadTalk Group’s main revenue generators?
A: BreadTalk Group is a snack and beverage company based in Singapore. It was founded in the year 2000.…
Q: mmon stocK has (-free rate is 4 percent an market risk prem 7 регcent. EQUIRED Calculate the…
A: Price of common equity can be present value of dividends and present value of terminal value of…
Q: On 1 January 2019 the total present value of all the investments is R75,998.34. If the interest rate…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: Make 2 IRR problems with a diagram and solution.
A: IRR or Internal rate of return :- It is an discount rate at which initial investment is equal to sum…
Q: Macy's was selling Calvin Klein jean shirts that were originally priced at $46.00 for $8.74. a. What…
A: Solution:- Markdown means the selling an item at a price less than its original price. So, markdown…
Q: Your father offers you a choice of $105,000 in 12 years or $47,000 today. а. If money is discounted…
A: Time Value of Money: According to this basic financial concept money in the present have more value…
Q: How much do you need to invest today if you will also invest $2,700 at the end of every year for 39…
A: Accumulated amount (AV) = $1,000,000 Rate of return (r) = 0.065 Annual deposit (D) = $2,700 Period…
On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the interest expense of ABC for the whole term of the loan?
Step by step
Solved in 2 steps
- On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000Megabank granted an 8% 3-year loan to Global Company on January 1, 2018. The interest on the loan is payable every December 31. Megabank incurred P148,122 of direct origination cost but an origination fee of P300,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 9%. What is the amortized cost of the loan on December 31, 2019 in Megabank's accounting book ?On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the cost savings/(incremental cost) attributable to the FRA?
- What is the carrying amount of the loan receivable on December 31, 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projected the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projected cash flows are: Date of cash flow Amount projected on December 31, 2021 December 31, 2022 500,000 1,000,000 December 31, 2023 December 31, 2024 December 31, 2025 2,000,000 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 7,000,000 b. 5,449,600 c. 4,860,000 d.…Eastwest Bank extended a 3-year $5,000,000 loan to Nick Company on January 1, 2020. The interest rate agreed upon is 7%. The bank incurred direct and indirect origination costs of $75,100 and $50,000 respectively, but collected origination fees of $328,230 from Nick Company. The effective interest rate is 9%. On December 31, 2020, how much is the total receivable related to the loan to Nick Company?On January 1, 2021, Oceanic Bank made a P1,000,000, 8% loan. The P80,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 2021, the first year's interest of P80,000 has not yet been received because the borrower is experiencing financial difficulties. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5- year loan term. In addition, the amount of principal repayment will be dropped from P1,000,000 to P500,000.The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 2021 in connection with the loan. What is the loan impairment loss on December 31, 2021? a. 338,500 O b. 238,500 c. 388,000 O d. 288,000
- On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October 1, 2020, and carries a 5.40% interest rate. Use ordinary interest to calculate the interestOn December 1, 2021, Nicole Company gave Dawn Company a P2,000,000, 12% loan. Nicole Company paid proceeds of P1,940,000 after the deduction of a P60,000 nonrefundable loan origination fee. Principal and interest are due in sixty monthly installments of P44,500, beginning January 1, 2022. What amount should be reported as accrued interest receivable on December 31, 2021? a. 44,500 O b. 60,000 O c. 20,000 O d. 0On December 1, 2021, Nicole Company gave Dawn Company a P2,000,000, 12% loan. Nicole Company paid proceeds of P1,940,000 after the deduction of a P60,000 nonrefundable loan origination fee. Principal and interest are due in sixty monthly installments of P44,500, beginning January 1, 2022. What amount of interest income should be reported in 2021? а. 22,333 О Б. 19,400 О с. 21,663 O d. 20,000
- Magic Finance Company reports a loan receivable from Blue Company in the amount of P5,000,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,000,000 on January 1 of each year. The loan was made on January 1, 2022. Blue made the P500,000 interest payments for 2022 but did not make the P1,000,000 principal payment nor the P500,000 interest payment in 2023. Blue is having financial difficulty and Magic has concluded that the loan is impaired. Analysis of Blue's financial condition on - December 31, 2023 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing of collection are determined as follows: December 31, 2024 - P1,750,000December 31, 2025 - 2,000,000December 31, 2026 - 1,750,000Total P5,500,000 The preset value factors at 10% are as follows: 1 period - 0.09; 2…What is the interest income for 2021? Philippine Bank granted a loan to a borrower on January 1, 2021. The interest on the loan is 8% payable annually starting December 31, 2023. Principal amount Origination fee charged against the borrower Direct origination cost incurred 3,000,000 100,000 260,300 After considering the origination fee charged to the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. a. 240,000 O b. 189,618 c. 252,824 O d. 180,000On January 1, 2021, Saltimbocca Corporation borrowed $192,772 from Morgan Stanley. Under the terms of the loan, Saltimbocca will pay $500,000 to Morgan Stanley in ten years (on December 31, 2030), which implies that the yield to maturity (or implicit interest rate) on the loan is 10.0%. What is Saltimbocca’s interest expense on the loan for the year ended December 31, 2023 (the third year of the loan)? (Hint: Round to the nearest dollar. Do not use any dollar signs, commas, or decimals in your answer).
