A small foundry agrees to pay $220,000 two years from now to a supplier for a given amount of coking coal
The foundry plans to deposit a fixed amount in a bank account every three months, starting three months from now, so that at the end of two years the account holds $220,000. If the account pays 12.5% APR compounded monthly, how much must be deposited every three months?
A) $24,602
B) $27,063
C) $29,523
D) $31,983
Answer: A
You might also like to view...
A manager taking corrective actions when the organization experiences unexpected disturbances is performing within the ______ of managerial roles.
a. Informational category b. Decisional category c. Interpersonal category
Flip charts and white boards are obsolete and have been replaced by electronic presentations
Indicate whether the statement is true or false
Demand is best determined by a top management committee.
Answer the following statement true (T) or false (F)
On January 1, 2018, A. Hamilton, Inc. ("AHI") provides a loan for $3,000,000 to Reynolds Manufacturing Corp. ("RMC"). The terms of the loan require payment of the loan no later than January 1, 2023. RMC was in terrible financial condition and would cease operations absent securing a loan. Prior to requesting a loan from AHI, RMC exhausted all other possible avenues for funding. The terms of the loan agreement include provisions that require RMC to provide AHI with the following from January 1, 2018 through January 1, 2023: (i) 6 percent annual interest on the principal amount of the loan, which reflects a market rate of interest; (ii) 100 percent participation rights to RMC's profits less $17,000 in a guaranteed annual dividend to RMC's common shareholders; and (iii) complete
decision-making authority over RMC's operations and financing decisions.At the end of the term of the loan, AHI is given the right to acquire RMC or, in its discretion, extend the term of the original loan an additional 5 years. At the date the loan was extended to RMC, RMC's common stock had an estimated fair value of $136,000 and a book value of $40,000. The $96,000 difference was attributed to an asset with a 3-year useful life remaining ("Asset"). At January 1, 2018, the balance sheets for AHI and RMC are as follows:January 1, 2018Balance SheetsAssetsAHIRMCCash 97,000 78,000 Accounts receivable 137,000 265,000 Loan receivable from AHI 3,000,000 - Asset with 3-year useful life remaining - 96,000 Equipment (net) 3,287,000 2,834,000 Total assets 6,521,000 3,273,000 ?Liabilities and owner's equityAHIRMCAccounts payable (219,000) (233,000)Long-term debts (688,000) (3,000,000)Common stock (4,800,000) (34,000)Retained earnings, 1/1/18 (814,000) (6,000)Total liabilities and equity (6,521,000) (3,273,000)?With respect to the acquisition-date consolidation worksheet, which of the following is accurate? A. The consolidated total long-term debt equals $3,688,000. B. The value of the noncontrolling interest is $40,000. C. The total liabilities and equity on a consolidated basis equals $5614,000. D. The total of all adjustments and eliminations equal $3,136,000. E. The total consolidated assets equal $9,794,000.