Reference no: EM131214309
If the lessee knows the implicit interest rate computed by the lessor (e.g., 7%) and it is less than the lessee’s incremental borrowing rate (e.g., 8%), then the lessee must use the lessor’s rate. Why does the FASB require companies to use the lower rate of 7% and 8%?
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What is the total value of the cash flows of the firm
: A project’s annual operating cash flows for the next five years are $120,000, $150,000, $180,000, $200,000, and $220,000. Assuming a discount rate of 12% and a terminal growth rate of 3%, What is the terminal value for assessing the cash flows after ..
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Estimate the company real cost of capital
: You are considering a new project, which costs $600,000 and is expected to have the following nominal cash flows of $200,000, $220,000, $220,000, $200,000, and $180,000 in years 1 through 5. The company’s nominal cost of capital is 10%. The expected ..
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Calculate cash flows related to working capital
: Mary is considering opening a grocery store. The store is expected to generate revenues of $200,000, $250,000, $260,000, $250,000 and $200,000 during year 1, year 2, year 3, year 4, and year 5 respectively. Mary plans to operate the store for 5 years..
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Find amount of capital gain realized from assets liquidation
: An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $350,000 and will be sold for $50,000 at the end of the project. Assume tax rate is 35%. Find the asset’s book value at the time ..
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The implicit interest rate computed by the lessor
: If the lessee knows the implicit interest rate computed by the lessor (e.g., 7%) and it is less than the lessee’s incremental borrowing rate (e.g., 8%), then the lessee must use the lessor’s rate. Why does the FASB require companies to use the lower ..
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What is the total depreciation amount prior
: They placed the rental home into service on March 1, 2009, and of the $515,000 purchase price, $426,000 was allocated to the land. What would the depreciation amount be when filing a tax return for 2015. Also, what is the total depreciation amount pr..
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What is the method of presentation required
: What is the method of presentation required by SFAS 160 of “non-controlling interest” on a consolidated balance sheet?
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Prepare a bond amortization schedule
: On January 1, 2013, Hi and Lois Company purchased 12% bonds having a maturity value of $343,000, for $369,004.48. The bonds provide the bondholders with a 10.00% yield. The bonds are classified in the held-to-maturity category. Prepare the journal en..
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Prepare the journal entries to record the interest received
: On January 1, 2013, Hi and Lois Company purchased 13% bonds, having a maturity value of $547,500, for $609,763.18. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2013, and mature January 1, 2018, with interest receivabl..
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